Mandatory Data Breach Notification

The Australian Government has just announced that mandatory data breach notification laws will commence in March 2014.  This is an excellent start, and the Government is to be congratulated on the initiative.  I'm not normally one to promote more "cyber" legislation to cover new implementations of old crimes, but this really is a new type of crime for which no existing legislation adequately applies.

We've had identity theft for as long as we've had scammers, but in the pre-Internet world this was done one at a time, and required local knowledge and a lot of effort.  But now it can be done wholesale, from anywhere, to anyone, for nearly no cost.  And this is happening every day.

So how will mandatory data breach notification help?  It won't make us any more successful in prosecuting the attackers, so it won't reduce the number of attacks.  It has nothing to do with helping the people who are the subject of identity theft, so it won't reduce the impact of the crime.

 
Today the only sensible approach to take for any company that has a data spill is to cover it up.  There is no possible positive outcome from telling anyone, and a significant likely negative outcome in terms of reputation damage, share price reduction and loss of market confidence.  So this just looks like more victim blaming.

The real point is to make businesses care about security.  If they know that they will be named and shamed, they are more likely to take the necessary steps to not be breached, and therefore reduce the number of actual breaches, and so reduce the impact on the Australian people.  Raising the cost to the attackers is a win for everyone.

Better security is an investment in the future, not a cost to be minimised.

Phil Kernick Chief Technology Officer
@philkernick www.cqr.com 

Decline of the PCI empire

The Payment Card Industry Data Security Standard - PCI DSS - is a standard with 255 controls that you must comply with if you store, process or transmit credit card information.  Complying with the standard is the cost of doing e-commerce today.  The cost is high, and going to get higher, and as with all monopoly empires this increase will eventually lead to its downfall.

Disclaimer: CQR is a QSA company and I am a QSA.  I have no special knowledge about what the PCI council is going to do, so this is a fairly bold statement.  I base my assessment on simple economics.

PCI DSS v3.0 will be released in October 2013.  The only certainty is that it will have more controls, and they will be harder to comply with, and it will be more expensive both to implement and have audited.  Today most level 3 and 4 merchants are struggling with PCI.  Next year will break some of them - some will just fail to comply, and others will consider no longer taking credit cards.  Three years later, in October 2016, PCI DSS v4.0 will be released, and this will break the rest.

Don't get me wrong - PCI DSS is a good standard, it serves the purpose it was designed for, and if all merchants complied with it there would be far fewer credit card breaches.  But we need to go back to economic basics: if the cost of the control exceeds the value of the service, then it makes no economic sense to offer the service.  Somewhere around the release of PCI DSS v4.0 this will cross-over.

Here's my prediction for the inevitable decline: more and more merchants will stop taking credit cards directly.  PCI DSS only applies if you store, process or transmit credit card data.  So if merchants stop doing this directly, and instead use a third party service provider to process card data, they will no longer have a compliance burden.  Merchants will still have a cost to bear, as the service provider will need to be compliant, but that cost can be amortised over many more merchants, leading to the cost of the control dropping back below the value of the service, and economic theory prevailing.

We are going to keep taking credit cards because they are just too convenient.  But the market for PCI services is going to shrink radically, and in the end this is going to make all of us safer.

Phil Kernick Chief Technology Officer
@philkernick www.cqr.com 

Printing to the Internet

You've deployed a brand new networked printer, and after getting it all set up and working, what's the next step?  How about connecting it to the public Internet.  So that anyone, anywhere, at any time can print anything they want and waste all your paper and toner.

Madness you say!  Not it would seem in universities in Taiwan, Korea and Japan.

A little Google hacking and we have 31 internet connected Fuji Xerox printers.  Some of them have public IP addresses, but many of them have been actively published through a NAT firewall.  So this was a conscious choice!

Perhaps it's just a clever way for attackers to exfiltrate data, but I've learned not to attribute to malice that which is better explained by incompetence.

Here's my advice: If you want to print to a work printer from home, this is not the way to do it.

Phil Kernick Chief Technology Officer
@philkernick www.cqr.com 

Myth #9: We trust our staff

We are secure because we trust our staff.  We have a solid awareness programme, and after all, security is only a problem on the Internet.  If only it were true.

We might imagine that the most common internal attackers are the IT staff as they have full and unrestricted access to all of our systems.  As Microsoft wisely said in their 10 Immutable Laws of Security, a computer is only as secure as the administrator is trustworthy.

But system administrators aren’t the only insiders with means, motive and opportunity.

The Verizon 2012 Data Breach Investigations Report looked at the type of role held by internal attackers.  The results are eye opening.  While 6% of breaches were due to system administrators, 12% were by regular employees, 15% by managers and even 3% by executive management!

The truth is that trust must be earned, never expected.  All insiders have means and opportunity, all they need is motive.

To lower the risk, wise businesses perform background checks for new employees moving into sensitive positions, apply appropriate segregation of duties to lower the potential for attack, and then implement good detective controls to catch it if and when it happens.

If you trust but verify, then this myth is plausible.

Phil Kernick Chief Technology Officer
@philkernick www.cqr.com 

Myth #4: We comply with PCI DSS

There are a lot of organisation who think they are compliant with the controls in the PCI DSS, but really aren’t.  There are even more that were compliant at a point of time in the past, but aren’t now.  But let’s for the moment assume that an organisation really is compliant with the 6 objectives, 12 requirements and 225 controls in the PCI DSS.  Does this mean that they are more secure?

The Verizon 2012 Data Breach Investigations Report provides statistics on organisations that suffered a data breach, but should have been compliant with the PCI DSS.  If they were compliant they were 24× less likely to suffer a loss.  This is a really clear statistic, companies really are far more secure if they are compliant with the PCI DSS.

Of course this shouldn’t be a surprise, since the standard is just good security practice, and if organisations take this good practice and apply it to everything, it naturally follows that they will be more secure.

But there were still breaches from PCI DSS compliant organisations.  This doesn’t imply that the standard isn’t good enough – there is no such thing as perfect security – but more perhaps reflects that the only part of an organisation covered by the standard is the cardholder data environment.  It’s possible to have a compliant cardholder data environment, but neglect security in other areas, and still get compromised.

Compliance drives security, but does not equal security.

If PCI DSS is used as a basis for the entire security culture, then this myth is confirmed.

Phil Kernick Chief Technology Officer
@philkernick www.cqr.com

Myth #3: We have the best hardware

We have the best hardware.  We have firewalls from more than one vendor.  We have anti-virus appliances at the gateway.  We have excellent logging capabilities.  We’ve just implemented a data loss prevention solution.  And we’ve had the smartest engineers hook it all up.  Of course we are secure, our vendors told us so!

If you go back to Myth #1, most of the businesses that suffered a data breach had the best hardware.  It didn’t stop the bad guys.

The Verizon 2012 Data Breach Investigations Report has some really enlightening statistics about the timing of data breaches.  Most compromises happened within minutes of initial attack, and data exfiltration happened within minutes of compromise.  But detection of the compromise didn’t happen for months, and containment took weeks after that.  And many of these breaches happened to companies with all the best hardware.

The thinking underpinning this myth is that as technology created the problem, it can also solve it.  As most of these technical systems are scoped, implemented and managed by capable technologists, they are unfortunately blind to the truth.  Information Security is a People Business.  It’s not about the technology.  It’s never been about the technology.

People are the easiest system to attack, and people can subvert any security control.  And much to the annoyance of the technologists, they can’t be patched, and they can’t be upgraded!

Hardware provides a solid platform, and without it security isn’t possible.  But policy, configuration and management trump functionality every time.  Many businesses focus too much on capex and so will overspend on the former, and underspend on the latter.

That makes this myth busted.

Phil Kernick Chief Technology Officer
@philkernick www.cqr.com