ELC 200 Day 9 Copyright © 2007 Pearson Education, Inc.

Agenda Questions? Begin Online Security and payment systems Assignment 2 corrected 12 A’s, 1 B and 2 C’s Assignment 3 posted Due October 7 @ 11:05 Assignment 4 will be posted later today Due October 18 Exam 1 covering chaps 1-5 will be on Thursday October 14 20 M/C, 4-5 short essay and one extra credit question Extra Credit is about the infamous hacker MafiaBoy On Blackboard Open book, open notes

Chapter 5 Online Security and Payment Systems Copyright © 2009 Pearson Education, Inc. Copyright © 2010 Pearson Education, Inc.

CYBER Warfare Russia – Estonia Cyber war Twitter DDoS Korean DDoS Taught at US Military academies http://www.dean.usma.edu/Teams/CyberDefense/Default.cfm bh-fed-03-dodge.pdf iwar_wise.pdf http://www.linkedin.com/in/danielragsdale / © 2007 Prentice-Hall, Inc

Cyberwar Becomes a Reality Class Discussion What is a DDoS attack? What are botnets? Why are they used in DDoS attacks? What percentage of computers belong to botnets? What percentage of spam is sent by botnets? Can anything be done to stop DDoS attacks? Copyright © 2010 Pearson Education, Inc.

DDOS http://www.cs3-inc.com/pk_whatisddos.html © 2007 Prentice-Hall, Inc

The E-commerce Security Environment Overall size and losses of cybercrime unclear Reporting issues 2008 CSI survey: 49% respondent firms detected security breach in last year Of those that shared numbers, average loss $288,000 Underground economy marketplace Stolen information stored on underground economy servers Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Types of Attacks Against Computer Systems (Cybercrime) Figure 5.1, Page 267 Source: Based on data from Computer Security Institute, 2009. Copyright © 2010 Pearson Education, Inc.

What Is Good E-commerce Security? To achieve highest degree of security New technologies Organizational policies and procedures Industry standards and government laws Other factors Time value of Information Cost of security vs. potential loss Security often breaks at weakest link Copyright © 2010 Pearson Education, Inc.

The E-commerce Security Environment Figure 5.2, Page 270 Copyright © 2010 Pearson Education, Inc.

Table 5.2, Page 271 Copyright © 2010 Pearson Education, Inc.

General Security Issues at E-Commerce Sites © 2007 Prentice-Hall, Inc

The Tension Between Security and Other Values Security vs. ease of use The more security measures added, the more difficult a site is to use, and the slower it becomes Security vs. desire of individuals to act anonymously Use of technology by criminals to plan crimes or threaten nation-state Copyright © 2010 Pearson Education, Inc.

Security Threats in the E-commerce Environment Three key points of vulnerability: Client Server Communications pipeline Copyright © 2010 Pearson Education, Inc.

A Typical E-commerce Transaction SOURCE: Boncella, 2000. Figure 5.3, Page 273 Copyright © 2010 Pearson Education, Inc.

Vulnerable Points in an E-commerce Environment SOURCE: Boncella, 2000. Figure 5.4, Page 274 Copyright © 2010 Pearson Education, Inc.

Snoop and Sniff © 2007 Prentice-Hall, Inc

Most Common Security Threats in the E-commerce Environment Malicious code Viruses Worms Trojan horses Bots, botnets Unwanted programs Browser parasites Adware Spyware Copyright © 2010 Pearson Education, Inc.

Most Common Security Threats Phishing Deceptive online attempt to obtain confidential information Social engineering, e-mail scams, spoofing legitimate Web sites Use information to commit fraudulent acts (access checking accounts), steal identity Hacking and cybervandalism Hackers vs. crackers Cybervandalism: intentionally disrupting, defacing, destroying Web site Types of hackers: white hats, black hats, grey hats Copyright © 2010 Pearson Education, Inc.

The Players: Hackers, Crackers, and Other Attackers Original hackers created the Unix operating system and helped build the Internet, Usenet, and World Wide Web; and, used their skills to test the strength and integrity of computer systems Over time, the term hacker came to be applied to rogue programmers who illegally break into computers and networks Hacker underground http://www.defcon.org/ http://www.blackhat.com/ http://www.2600.com/ © 2007 Prentice-Hall, Inc

The Players: Hackers, Crackers, and Other Attackers (cont.) Uber Haxor Wizard Internet Hackers Highly capable attackers Responsible for writing most of the attacker tools Crackers People who engage in unlawful or damaging hacking short for “criminal hackers” Other attackers “Script kiddies” are ego-driven, unskilled crackers who use information and software (scripts) that they download from the Internet to inflict damage on targeted sites Scorned by both the Law enforcement and Hackers communities © 2007 Prentice-Hall, Inc

Script Kiddies script kiddies: pl.n. 1. [very common] The lowest form of cracker; script kiddies do mischief with scripts and rootkits written by others, often without understanding the exploit they are using. Used of people with limited technical expertise using easy-to-operate, pre-configured, and/or automated tools to conduct disruptive activities against networked systems. Since most of these tools are fairly well-known by the security community, the adverse impact of such actions is usually minimal. 2. People who cannot program, but who create tacky HTML pages by copying JavaScript routines from other tacky HTML pages. More generally, a script kiddie writes (or more likely cuts and pastes) code without either having or desiring to have a mental model of what the code does; someone who thinks of code as magical incantations and asks only “what do I need to type to make this happen?” Source: http://www.catb.org/jargon/html/S/script-kiddies.html More info: http://www.tamingthebeast.net/articles/scriptkiddies.htm © 2007 Prentice-Hall, Inc

How Hackers Hack Many Techniques Social Engineering Cracking Get someone to give you their password Cracking Guessing passwords A six letter password (no caps) > 300 million possibilities Merriam-Webster's citation files, which were begun in the 1880s, now contain 15.7 million examples of words used in context and cover all aspects of the English vocabulary. http://www.m-w.com/help/faq/words_in.htm Buffer Overflows Getting code to run on other PCs Load a Trojan or BackDoor Snoop and Sniff Steal data Denial of Service (DOS) Crash or cripple a Computer from another computer Distributed Denial of Service (DDOS) Crash or cripple a Computer from multiple distributed computers © 2007 Prentice-Hall, Inc

Maine’s Anti-Hacker laws §432. Criminal invasion of computer privacy      1. A person is guilty of criminal invasion of computer privacy if the person intentionally accesses any computer resource knowing that the person is not authorized to do so. [1989, c. 620 (new).]      2. Criminal invasion of computer privacy is a Class D crime. [1989, c. 620 (new).] §433. Aggravated criminal invasion of computer privacy 1. A person is guilty of aggravated criminal invasion of computer privacy if the person:    A. Intentionally makes an unauthorized copy of any computer program, computer software or computer information, knowing that the person is not authorized to do so;  [1989, c. 620 (new).]   B. Intentionally or knowingly damages any computer resource of another person, having no reasonable ground to believe that the person has the right to do so; or  [1989, c. 620 (new).]   C. Intentionally or knowingly introduces or allows the introduction of a computer virus into any computer resource, having no reasonable ground to believe that the person has the right to do so.  [1989, c. 620 (new).][1989, c. 620 (new).]      2. Aggravated criminal invasion of computer privacy is a Class C crime. [1989, c. 620 (new).] © 2007 Prentice-Hall, Inc

Most Common Security Threats Credit card fraud/theft Fear of stolen credit card information deters online purchases Hackers target merchant servers; use data to establish credit under false identity Online companies at higher risk than offline Hannaford hack Spoofing: misrepresenting self by using fake e-mail address or other form of identification Pharming: spoofing a Web site Redirecting a Web link to a new, fake Web site Spam/junk Web sites Splogs Copyright © 2010 Pearson Education, Inc.

Most Common Security Threats Denial of service (DoS) attack Hackers flood site with useless traffic to overwhelm network Distributed denial of service (DDoS) attack Hackers use multiple computers to attack target network Sniffing Eavesdropping program that monitors information traveling over a network Insider jobs Single largest financial threat Poorly designed server and client software Copyright © 2010 Pearson Education, Inc.

Spyware Software that sits on your computer Monitors everything that you do and sends out reports to Marketing agencies Usually ties to a POP-UP server Top Spyware I-Look Up CoolWebSearch N-CASE GATOR DoubleClick If you have ever loaded up ICQ Loaded on your PC you have Spyware If you have ever had KAZAA loaded on your PC you have Spyware If you have loaded Quicken or TurboTax you have Spyware C-Dilla © 2007 Prentice-Hall, Inc

Spyware infestation. Taken by Brandon Waddell. © 2007 Prentice-Hall, Inc

The Virus: Computer Enemy Number One Most serious attack on a client computer or a server in an Internet environment is the virus A virus is a malicious code that replicates itself and can be used to disrupt the information infrastructure Viruses commonly compromise system integrity, circumvent security capabilities, and cause adverse operation by taking advantage of the information system of the network © 2007 Prentice-Hall, Inc

Types of Viruses File virus is one that attacks executable files Boot virus attacks the boot sectors of the hard drive and diskettes Macro virus exploits the macro commands in software applications such as Microsoft Word © 2007 Prentice-Hall, Inc

Levels of Virus Damage © 2007 Prentice-Hall, Inc

Steps for Antivirus Strategy Establish a set of simple enforceable rules for others to follow Educate and train users on how to check for viruses on a disk Inform users of the existing and potential threats to the company’s systems and the sensitivity of information they contain Periodically update the latest antivirus software © 2007 Prentice-Hall, Inc

Getting Rid of Viruses Anti-Vir Avast AVG Norton AntiVirus MacAfee Get a good Virus Projection Software Free (not Recommended) Anti-Vir Avast AVG Not Free Norton AntiVirus MacAfee Free for UMFK students and staff http://www.umfk.maine.edu/it/downloads/default.cfm Update definition files often © 2007 Prentice-Hall, Inc

Spyware Solutions Enforce strict user Web policies on surfing and downloading activities Install a desktop firewall on every laptop and desktop - http://www.zonelabs.com Do not give users administrator privileges Configure an e-mail gateway to block all executable e-mail attachments Ensure desktop antivirus software signatures are up to date - http://www.grisoft.com © 2007 Prentice-Hall, Inc

Tools Available to Achieve Site Security Figure 5.7, Page 287 Copyright © 2010 Pearson Education, Inc.

Encryption Encryption Transforms data into cipher text readable only by sender and receiver Secures stored information and information transmission Provides 4 of 6 key dimensions of e-commerce security: Message integrity Nonrepudiation Authentication Confidentiality Copyright © 2010 Pearson Education, Inc.

Symmetric Key Encryption Sender and receiver use same digital key to encrypt and decrypt message Requires different set of keys for each transaction Strength of encryption Length of binary key used to encrypt data Advanced Encryption Standard (AES) Most widely used symmetric key encryption Uses 128-, 192-, and 256-bit encryption keys Other standards use keys with up to 2,048 bits Copyright © 2010 Pearson Education, Inc.

Public Key Encryption Uses two mathematically related digital keys Public key (widely disseminated) Private key (kept secret by owner) Both keys used to encrypt and decrypt message Once key used to encrypt message, same key cannot be used to decrypt message Sender uses recipient’s public key to encrypt message; recipient uses his/her private key to decrypt it Copyright © 2010 Pearson Education, Inc.

Public Key Cryptography—A Simple Case Figure 5.8, Page 290 Copyright © 2010 Pearson Education, Inc.

Public Key Encryption Using Digital Signatures and Hash Digests Hash function: Mathematical algorithm that produces fixed-length number called message or hash digest Hash digest of message sent to recipient along with message to verify integrity Hash digest and message encrypted with recipient’s public key Entire cipher text then encrypted with recipient’s private key—creating digital signature—for authenticity, nonrepudiation Copyright © 2010 Pearson Education, Inc.

Public Key Cryptography with Digital Signatures Figure 5.9, Page 291 Copyright © 2010 Pearson Education, Inc.

Digital Envelopes Addresses weaknesses of: Public key encryption Computationally slow, decreased transmission speed, increased processing time Symmetric key encryption Insecure transmission lines Uses symmetric key encryption to encrypt document Uses public key encryption to encrypt and send symmetric key Copyright © 2010 Pearson Education, Inc.

Creating a Digital Envelope Figure 5.10, Page 293 Copyright © 2010 Pearson Education, Inc.

Digital Certificates and Public Key Infrastructure (PKI) Digital certificate includes: Name of subject/company Subject’s public key Digital certificate serial number Expiration date, issuance date Digital signature of certification authority (trusted third party institution) that issues certificate Public Key Infrastructure (PKI): CAs and digital certificate procedures that are accepted by all parties Copyright © 2010 Pearson Education, Inc.

Digital Certificates and Certification Authorities Figure 5.11, Page 294 Copyright © 2010 Pearson Education, Inc.

Limits to Encryption Solutions Doesn’t protect storage of private key PKI not effective against insiders, employees Protection of private keys by individuals may be haphazard No guarantee that verifying computer of merchant is secure CAs are unregulated, self-selecting organizations Copyright © 2010 Pearson Education, Inc.

Insight on Society In Pursuit of E-mail Security Class Discussion What are some of the current risks and problems with using e-mail? What are some of the technology solutions that have been developed? Are these solutions compatible with modern law? Consider the benefits of a thorough business record retention policy. Do you agree that these benefits are worth giving up some control of your e-mail? Copyright © 2010 Pearson Education, Inc.

Securing Channels of Communication Secure Sockets Layer (SSL): Establishes a secure, negotiated client-server session in which URL of requested document, along with contents, is encrypted S-HTTP: Provides a secure message-oriented communications protocol designed for use in conjunction with HTTP Virtual Private Network (VPN): Allows remote users to securely access internal network via the Internet, using Point-to-Point Tunneling Protocol (PPTP) Copyright © 2010 Pearson Education, Inc.

Secure Negotiated Sessions Using SSL Figure 5.12, Page 298 Copyright © 2010 Pearson Education, Inc.

Proxy servers (proxies) Protecting Networks Firewall Hardware or software that filters packets Prevents some packets from entering the network based on security policy Two main methods: Packet filters Application gateways Proxy servers (proxies) Software servers that handle all communications originating from or being sent to the Internet Copyright © 2010 Pearson Education, Inc.

Firewalls and Proxy Servers Figure 5.13, Page 301 Copyright © 2010 Pearson Education, Inc.

Protecting Servers and Clients Operating system security enhancements Upgrades, patches Anti-virus software Easiest and least expensive way to prevent threats to system integrity Requires daily updates Copyright © 2010 Pearson Education, Inc.

Management Policies, Business Procedures, and Public Laws U.S. firms and organizations spend 12% of IT budget on security hardware, software, services ($120 billion in 2009) Managing risk includes Technology Effective management policies Public laws and active enforcement Copyright © 2010 Pearson Education, Inc.

A Security Plan: Management Policies Risk assessment Security policy Implementation plan Security organization Access controls Authentication procedures, including biometrics Authorization policies, authorization management systems Security audit Copyright © 2010 Pearson Education, Inc.

Developing an E-commerce Security Plan Figure 5.14, Page 303 Copyright © 2010 Pearson Education, Inc.

What is LOCKSS? What are the advantages and disadvantages to LOCKSS? Insight on Technology Securing Your Information: Cleversafe Hippie Storage Class Discussion What is LOCKSS? What are the advantages and disadvantages to LOCKSS? How is Cleversafe’s storage method different? How does it work? Why is it accurate to say that Cleversafe’s method is “green” or “hippie storage”? Copyright © 2010 Pearson Education, Inc.

The Role of Laws and Public Policy Laws that give authorities tools for identifying, tracing, prosecuting cybercriminals: National Information Infrastructure Protection Act of 1996 USA Patriot Act Homeland Security Act Private and private–public cooperation CERT Coordination Center US-CERT Government policies and controls on encryption software OECD guidelines Copyright © 2010 Pearson Education, Inc.

Types of Payment Systems Cash Most common form of payment in terms of number of transactions Instantly convertible into other forms of value without intermediation Checking transfer Second most common payment form in the United States in terms of number of transactions Credit card Credit card associations Issuing banks Processing centers Copyright © 2010 Pearson Education, Inc.

Types of Payment Systems Stored Value Funds deposited into account, from which funds are paid out or withdrawn as needed, e.g., debit cards, gift certificates Peer-to-peer payment systems Accumulating Balance Accounts that accumulate expenditures and to which consumers make period payments E.g., utility, phone, American Express accounts Copyright © 2010 Pearson Education, Inc.

Table 5.6, Page 312 Source: Adapted from MacKie-Mason and White, 1996. Copyright © 2010 Pearson Education, Inc.

E-commerce Payment Systems Credit cards 55% of online payments in 2009 Debit cards 28% of online payments in 2009 Limitations of online credit card payment Security Cost Social equity Copyright © 2010 Pearson Education, Inc.

How an Online Credit Transaction Works Figure 5.16, Page 315 Copyright © 2010 Pearson Education, Inc.

E-commerce Payment Systems Digital wallets Emulates functionality of wallet by authenticating consumer, storing and transferring value, and securing payment process from consumer to merchant Early efforts to popularize failed Newest effort: Google Checkout Digital cash Value storage and exchange using tokens Most early examples have disappeared; protocols and practices too complex Copyright © 2010 Pearson Education, Inc.

E-commerce Payment Systems Online stored value systems Based on value stored in a consumer’s bank, checking, or credit card account PayPal, smart cards Digital accumulated balance payment Users accumulate a debit balance for which they are billed at the end of the month Digital checking: Extends functionality of existing checking accounts for use online Copyright © 2010 Pearson Education, Inc.

Wireless Payment Systems Use of mobile handsets as payment devices well- established in Europe, Japan, South Korea Japanese mobile payment systems E-money (stored value) Mobile debit cards Mobile credit cards Not as well established yet in the United States Majority of purchases are digital content for use on cell phone Copyright © 2010 Pearson Education, Inc.

How has PayPal responded? Insight on Business Mobile Payment’s Future: Wavepayme, Textpayme Group Discussion What technologies make mobile payment more feasible now than in the past? Describe some new experiments that are helping to develop mobile payment systems. How has PayPal responded? Why haven’t mobile payment systems grown faster? What factors will spur their growth? Copyright © 2010 Pearson Education, Inc.

Electronic Billing Presentment and Payment (EBPP) Online payment systems for monthly bills 40% + of households in 2009 used some EBPP; expected to grow significantly Two competing EBPP business models: Biller-direct (dominant model) Consolidator Both models are supported by EBPP infrastructure providers Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc.   Publishing as Prentice Hall Copyright © 2010 Pearson Education, Inc.