US Federal Agencies Welcome Data Theft

After 15 months of investigation into 24 major US federal agencies, the Government Accountability Office (GAO) has release a report showing that key US Departments still don’t take data security seriously. Given the list of breaches we’ve been covering affecting everyone from colleges and hospitals to the US Army, I’d say it’s high time they started!

According to the report quoted by Vnunet.com, around 70 percent of laptops and handhelds used by agency failed to comply with Office of Management and Budget (OMB) rules and didn’t use encryption making the data available to anyone intending to steal it. The OMB rules are not even close to being new, as they decided all federal laptops should be encrypted back in 2007.

“We are recommending that OMB clarify governmentwide encryption policy to address agency efforts to plan for and implement encryption technologies,” said the report.

“We are also making recommendations to selected agencies to properly install and configure FIPS-compliant encryption technologies, to develop policies and procedures to manage encryption, and to provide encryption training to personnel.”

Other practices of extremely low levels of security (or should we say non-existent security) include Nasa employees refusing to deploy encryption software on their laptops and members of the Department of Education who weren’t told encryption software was installed so they of course weren’t using it. From what I know if they’re using Windows, whenever a new program is installed, you have a quite nagging message in your Startup Menu. How patient must one be to simply ignore it over and over again

Stockbrokers Get Fine for Poor Security

The Financial Services Authority (FSA) has recently fined a firm of stockbrokers for failing to adequately protect their customers from the risk of identity fraud. FSA, quoted by the Register, said the company’s poor security included failing to manage, among others, the risks posed by staff using instant messaging and web-based email.

London-based Merchant Securities Group Limited also failed to verify the identities of customers contacting the firm by telephone. They instead relied on being able to recognize customers’ voices and informally asking them about personal matters such as holidays or hobbies. The firm also had the habit of including private account numbers in routine letters which could then lead to fraud or identity theft.

The FSA also found that back-up tapes containing unencrypted customer information were stored overnight in a bag at the home of a member of staff.

The London-based firm also failed to implement adequate controls “to mitigate the risk of customers’ personal data being transmitted outside the firm by failing to prevent the use of instant messaging and web-based email,” according to the penalty notice (pdf) served by the FSA.

New PCI Standards Disregard Inside Threats

Starting June 30, new measures inserted in the Payment Card Industry (PCI) standard will be inforced. However, representatives of a database security firm point out that the new additions do nothing to address inside threats.

As Vnunet.com shows in a recent article, the new measures require that companies dealing with stored credit card and other consumer financial data either install firewalls around all internet-facing applications or have all customer application code reviewed for common vulnerabilities.

Secerno representatives showed that the new and “improved” standard does not address real threats effectively:

“The PCI Data Security Standard has the best intentions but, as is the case with many compliance directives, it barely addresses the most immediate and upcoming threats to consumer data,” said Paul Davie, founder of Secerno.

“It is generally inadequate for addressing the sort of internal threat that can be exploited easily, such as by general or privileged users.”

Other than completely ignoring ill willed insiders, the PCI standard also fails to regulate data encryption requirements, database security policies, measures of protecting data on private networks.

New Easier Way to Encrypt Large Amounts of Data

Researchers from many world renowned universities and research labs such as UCLA or Root Labs have been focusing for quite a while on data encryption. According to the Register, current research lead to an encryption scheme that has the potential to simplify the protection of sensitive information. This encryption scheme allows banks, hospitals and other organizations to lock files using keys that are based on specific attributes: an employee’s position or geographic location.

The method, which was unveiled last week, adds to the growing body of research known as functional, or attribute-based encryption. Functional encryption is designed to solve the hassle tied to traditional public-key encryption resulting from distributing and managing thousands or millions of private keys authorized people need to decrypt protected data. If 1,000 people in an organization need to securely share their public key with their co-workers, that requires close to one million separate exchanges.

Functional encryption tries to simplify things. It allows data to be encrypted using attributes directly tied to the recipients, such as their names or email addresses, without the need for the parties to have exchanged keys ahead of time. Rather than relying on a single key that unlocks all data, functional encryption envisions a more flexible sort of system where a personal key unlocks some doors but not others.