Fraud cops collar two blokes accused of dodging bank's 2-factor auth
Online accounts raided in SMS scam
Indian police have arrested two men who allegedly circumvented a bank's two-factor authentication protection and looted online accounts.
The pair are suspected of buying victims' personal details from other crooks and then tricking mobile phone companies into giving the duo replacement SIM cards. Anyone in possession of these SIM chips could authorise fraudulent withdrawals and forward the cash to bank accounts set up by lackeys or other money mules.
The online transfers would need to be approved by a one-time authentication code sent to the victim's phone number in a text message; this code must be correctly typed into the banking website to allow the withdrawal.
But these messages will be directed to the mobile in which the replacement SIM is installed, rather than to the victim. Fraudulent transfers can be carried out before a victim realises that his or her mobile has been kicked off the network by the new SIM in the crook's handset and complains to the service provider - presumably in person at a shop or on a landline since marks would be left unable to make anything other than emergency calls using their original SIM card.
The suspects, one aged 39 from Mumbai and the other from Delhi, were arrested by cops from the Economic Offences Wing of India's Criminal Bureau of Investigation, the Indian Financial Express reports.
Indian police said they latched onto the fraud following a complaint from a victim, who alleged that 2,000,000 rupees ($35,000) had been fraudulently transferred from his account at YES Bank in October. Further commentary on the information security aspects of the case can be found in a blog post by Paul Ducklin of Sophos here. ®
Any text or email message I get from somebody claiming to be a bank gets deleted.
Re: Whose 'fault' ?
IANAL but from my viewpoint, it's the banks fault. They paid money to somebody who wasn't the rightful recipient. End of story. It makes no difference if the thieves cloned a phone, wore a false moustache, or just said "this is my account" while waving their hand. It's up to the BANK to verify the identity of the recipient. And it's up to the BANK to devise a system that does that.
The logical conclusion of any other way of looking at it (i.e. it's not the banks fault) means that if the banks computers were hacked, or stolen, or if their data centre when "boom", would be that all account holders would suddenly have no balance, and the bank would just say "oops".
THEFT? Or OUTSOURCING?
This isn't about stealing, this is about outsourcing.
Pay peanuts to employees (outsourcing to India) and expect some form of corruption.
I wonder how many times this has happened but the banks have kept the problem 'in house' to avoid the scandal.