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Wired world dangers rising, report warns
MARKET
NEWS
Wired world dangers rising, report warns Computer crime is booming and companies are not doing enough to protect themselves against assaults ranging from stolen laptops to heists worth millions, according to the Computer Security Institute, a San Francisco-based information security industry watchdog. In its third annual poll of 520 security specialists at US corporations, government institutions, financial institutions and universities, CSI reported that the wired world is becoming increasingly dangerous. The survey, conducted with the participation of members of the FBI's International Computer Crime Squad, found that 64% of respondents reported computer security breaches within the last 12 months. This figure represents an increase of 16% over figures reported in CSI's 1997 survey. Although 72% of respondents acknowledge suffering losses from security breaches, only 46% were able to quantify their losses. The total financial losses for the 241 organizations that could place a dollar figure on them comes to more than $136 million, representing a 36% increase in reported losses over the 1997 figure. Organizations experienced a variety of types of security breaches. For example, 44% reported unauthorized access by employees, 25% reported denial-of-service attacks, 24% reported system penetration from the outside, 18% reported theft of proprietary information, 15% reported incidents of financial fraud and 14% reported sabatoge of data or networks. The number of organizations that cited their Internet connection as a frequent point of attack rose from 47% in 1997 to 54% in 1998.
Scam financial services pose risks The spread of bogus businesses masquerading as legitimate financial institutions on the Internet poses an i n c r e a s e d risk to c o n s u m e r s . Users could be transferring deposits to scam artists, US Government and banking officials warn. According to regulators and the FBI, unchartered and uninsured banking ventures are popping up more often on the Internet. Since January 1996, the US Office of the Comptroller of the Currency (OCC) has issued at least 10 alerts r e g a r d i n g u n a u t h o r i z e d b a n k i n g schemes. The FBI is investigating some of these banks for possible fraud, tax evasion and money laundering activities. OCC officals point out that these operations are too e a s i l y c o n f u s e d with l e g i t i m a t e banks conducting business on the Internet. More than 1600 chartered banks operate on the Internet. Meanwhile, Reuters reports that a California man was arrested in April for allegedly defrauding about 150
Computer Fraud & Security May 1998 © 1998 Elsevier Science Ltd
investors out of $190 000, through a scheme to sell stock over the Internet. Matthew Bowin, President of Interactive Products and Services Inc., is also being c h a r g e d by the US S e c u r i t i e s and E x c h a n g e Commission for allegedly violating federal securities laws. A f t e r posting an i n v e s t m e n t p r o s p e c t u s on the Internet. Bowin received payments from investors as far away as Hong Kong, says the SEC officials. He promised that he would hold investor's money in escrow until he had raised $500 000, at which point he would issue share certificates. SEC officials said that Bowin spent the money on groceries and stereo equipment. "There is no company. It was a hoax," said James Jackson, assistant California district attoney. Bowin is being held for 65 counts of fraud, incuding grand theft and selling fraudulent securities.
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NEWS
Wired world dangers rising, report warns Computer crime is booming and companies are not doing enough to protect themselves against assaults ranging from stolen laptops to heists worth millions, according to the Computer Security Institute, a San Francisco-based information security industry watchdog. In its third annual poll of 520 security specialists at US corporations, government institutions, financial institutions and universities, CSI reported that the wired world is becoming increasingly dangerous. The survey, conducted with the participation of members of the FBI's International Computer Crime Squad, found that 64% of respondents reported computer security breaches within the last 12 months. This figure represents an increase of 16% over figures reported in CSI's 1997 survey. Although 72% of respondents acknowledge suffering losses from security breaches, only 46% were able to quantify their losses. The total financial losses for the 241 organizations that could place a dollar figure on them comes to more than $136 million, representing a 36% increase in reported losses over the 1997 figure. Organizations experienced a variety of types of security breaches. For example, 44% reported unauthorized access by employees, 25% reported denial-of-service attacks, 24% reported system penetration from the outside, 18% reported theft of proprietary information, 15% reported incidents of financial fraud and 14% reported sabatoge of data or networks. The number of organizations that cited their Internet connection as a frequent point of attack rose from 47% in 1997 to 54% in 1998.
Scam financial services pose risks The spread of bogus businesses masquerading as legitimate financial institutions on the Internet poses an i n c r e a s e d risk to c o n s u m e r s . Users could be transferring deposits to scam artists, US Government and banking officials warn. According to regulators and the FBI, unchartered and uninsured banking ventures are popping up more often on the Internet. Since January 1996, the US Office of the Comptroller of the Currency (OCC) has issued at least 10 alerts r e g a r d i n g u n a u t h o r i z e d b a n k i n g schemes. The FBI is investigating some of these banks for possible fraud, tax evasion and money laundering activities. OCC officals point out that these operations are too e a s i l y c o n f u s e d with l e g i t i m a t e banks conducting business on the Internet. More than 1600 chartered banks operate on the Internet. Meanwhile, Reuters reports that a California man was arrested in April for allegedly defrauding about 150
Computer Fraud & Security May 1998 © 1998 Elsevier Science Ltd
investors out of $190 000, through a scheme to sell stock over the Internet. Matthew Bowin, President of Interactive Products and Services Inc., is also being c h a r g e d by the US S e c u r i t i e s and E x c h a n g e Commission for allegedly violating federal securities laws. A f t e r posting an i n v e s t m e n t p r o s p e c t u s on the Internet. Bowin received payments from investors as far away as Hong Kong, says the SEC officials. He promised that he would hold investor's money in escrow until he had raised $500 000, at which point he would issue share certificates. SEC officials said that Bowin spent the money on groceries and stereo equipment. "There is no company. It was a hoax," said James Jackson, assistant California district attoney. Bowin is being held for 65 counts of fraud, incuding grand theft and selling fraudulent securities.
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