Category Archives: Crime

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Insider Threats and the Limitations of Pre-Hire Background Checks

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Background check

Is your company guarding against the threat of insider attack? If you responded with, “well, we do background checks when they are hired,” that’s a good start, but what about risk assessment during the course of an individual’s employment?

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The 2015 Insider Threat Spotlight Report from Infosec Buddy found that less than half of companies have the proper tools to fight insider threats. And, according to 62% of security professionals, that threat has increased in the past year. The average company faces four insider attacks every year, with an estimated price tag of $500,000 each, in addition to the astronomical impact a breach can have on an organization’s reputation.

So where is the disconnect? It starts with how we assess individual risk.

The limitations of the current employee screening model

The majority of companies conduct a one-time background check on new employees before they are hired. This is a necessary part of the risk assessment process, and the majority of background screening companies are great at what they do, but this model is built on a flawed assumption: that employee risk remains constant over time.

While an employee may not have posed a risk when hired, that can change quickly. Stressful life events such as a bankruptcy, a DUI, a divorce or a negative performance review can change an individual’s risk profile in an instant. It is also important to note that traditional background checks typically focus exclusively on criminal records, failing to analyze other important information sources like human resource documents, financial records, and social media activities.

And it’s not just employees. Insider threats can come in the form of third-party contractors, vendors, suppliers, and partners – in other words, any parties with the ability to access sensitive corporate information.

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A recent Accenture survey found that 76% of companies believe supply chain risk management is “very important.” The reality is that people are dynamic, and so are their motivations, which is why companies need comprehensive tools for managing personnel risk as it evolves over time.

The future of background checks: continuous identity screening

Getting proactive about managing the risks of insider threats starts with finding ways to continuously monitor personnel risk after they are brought into the organization. Advances in software offer one way to approach this challenge. Programs now exist that allow companies to actively monitor changes in personnel risk as it evolves, throughout an individual’s tenure with the company.

Continuous identity screening software automatically gathers and analyzes risk data from all relevant information sources, such as public records and HR documents, and proactively alerts risk and security managers to the most pressing threats. This allows risk managers to be continuously updated in real time, instead of traditional methods of pre-hire or periodic screening, which can uncover risk after it’s too late.

Take the example of a city bus driver who has received a recent DUI charge. Many employers would not be notified of that until a regularly-scheduled periodic background screening, if at all. Most employers rely on their employees to self-report incidents, but that does not always happen for obvious reasons. By implementing continuous screening, companies can immediately learn about that bus driver’s DUI charge, which prompts an investigation that could lead to further action.

Today’s continuous screening tools can also be customized by industry. For instance, the financial services industry may attribute more risk to an employee filing for bankruptcy than a transportation company would, whereas the healthcare industry may view odd activity on the network as a greater indicator of potential IP theft. Every industry has its own unique challenges and obstacles in meeting the mandates and regulations necessary. Tailoring the screening process accordingly can help proactively address those issues.

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What does this mean for you?

By bringing together identity data from external sources like criminal and financial records with internal sources like network activity and personnel reviews, organizations can reduce the risk of insider threats. It also allows organizations to maintain compliance through a legally defensible audit trail designed to meet critical regulations such as FCRA, FTC, and EEOC.

Morpho Hacker Group Targets Intellectual Property

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With the highly-publicized rise in cyberbreaches, we have seen hackers break into systems for a variety of reasons: criminal enterprises simply stealing money, thieves gathering Social Security or credit card numbers to sell on the black market, state-sponsored groups taking confidential information, and malicious actors taking passwords or personal data to use to hit more valuable targets. Now, another group of financially-motivated hackers has emerged with a different agenda that may have even riskier implications for businesses.

According to a new report from computer security company Symantec, a group it calls Morpho has attacked multiple multibillion-dollar companies across an array of industries in pursuit of one thing: intellectual property. While it is not entirely clear what they do with this information, they may aim to sell it to competitors or nation states, the firm reports. “The group may be operating as ‘hackers for hire,’ targeting corporations on request,” Symantec reported. “Alternatively, it may select its own targets and either sell stolen information to the highest bidder or use it for insider trading purposes.”

Victimized businesses have spanned the Internet, software, pharmaceutical, legal and commodities fields, and the researchers believe the Morpho group is the same one that breached Facebook, Twitter, Apple and Microsoft in 2013.

Symantec does not believe the group is affiliated with or acting on behalf of any particular country as they have attacked businesses without regard for the nationality of its targets. But, as the New York Times reported, ” the researchers said there were clues that the hackers might be English speakers — their malicious code is written in fluent English — and they named their encryption keys after memes in American pop culture and gaming. Researchers also said the attackers worked during United States working hours, though they conceded that might just be because that is when their targets are most active.”

The researchers have tied Morpho to attacks against 49 different organizations in more than 20 countries, deploying custom hacking tools that are able to break into both Windows and Apple computers, suggesting it has plenty of resources and expertise. The group has been active since at least March 2012, the report said, and their attacks have not only continued to the present day, but have increased in number. “Over time, a picture has emerged of a cybercrime gang systematically targeting large corporations in order to steal confidential data,” Symantec said.

Morpho hacking victims by industry

Morpho hackers have also been exceptionally careful, from preliminary reconnaissance to cleaning up evidence.

In some cases, to help best determine the valuable trade secrets they would steal, the group intercepted company emails as well as business databases containing legal and policy documents, financial records, product descriptions and training documents. In one case, they were able to compromise a physical security system that monitors employee and visitor movements in corporate buildings. After getting the data they wanted, they scrubbed their tracks, even making sure the servers they used to orchestrate the attacks were rented using the anonymous digital currency Bitcoin.

In short, the hackers are really good, according to Vikram Thakur, a senior manager of the attack investigations team at Symantec. “Who they are? We don’t know. They are virtually impossible to track,” he said.

47% of Consumers Have Not Changed Passwords in 5 Years

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online security passwords

More than 20% of consumers use passwords that are more than 10 years old, and 47% use passwords that have not been changed in five years, according to a recent report by account security company TeleSign. What’s more, respondents had an average of 24 online accounts, but only six unique passwords to protect them. A total of 73% of accounts use duplicate passwords.

Consumers recognize their own vulnerability.

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Four out of five consumers worry about online security, with 45% saying they are extremely or very concerned about their accounts being hacked – something 40% of respondents had experienced in the past year.

consumers worried about cybersecurity

While some companies may worry that adding too many security measures may frustrate or discourage users, this concern appears unfounded. Two thirds of respondents said they want online companies to provide more security, such as two-factor authentication (2FA). The real issue may be education. Even where this extra layer of protection is available, TeleSign found, a majority has not enabled it, with most among these users reporting that they do not understand what it is or how to use it. But, the survey found, 72% of consumers want to learn more about how to better secure their data.

learning about cybersecurity

“The number-one tip most experts give for increasing account security and stopping the fallout from data breaches is to turn on two-factor authentication,” said Steve Jillings, CEO of TeleSign. “Yet our research shows that the majority of consumers (61%) do not know what two-factor authentication is, even though it’s available on almost every account, free to the consumer and just waiting to be turned on.

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There is some good news, however. Some users in the United States are particularly learning – and acting upon – valuable lessons from highly publicized data breaches, with more people in the U.K. turning on 2FA because the site requires it, while more people in the U.S. did so to get an extra layer of protection. According to TeleSign, compared to respondents in the U.K., almost six times as many U.S. consumers turned on 2FA because their personal information was exposed in a data breach (17% vs. 3% of U.K. consumers). About three times the share of U.S. consumers enabled 2FA because they read or heard about a data breach (24% vs. 7%) or had an account hacked (23% vs. 9%).

Small Businesses Hit Hardest By Employee Theft

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The typical organization loses 5% of revenue each year to fraud – a potential projected global fraud loss of $3.7 trillion annually, according to the ACFE 2014 Report to the Nations on Occupational Fraud and Abuse.

In its new Embezzlement Watchlist, Hiscox examines employee theft cases that were active in United States federal courts in 2014, with a specific focus on businesses with fewer than 500 employees to get a better sense of the range of employee theft risks these businesses face. While sizes and types of thefts vary across industries, smaller organizations saw higher incidences of embezzlement overall.

According to the report, “When we looked at the totality of federal actions involving employee theft over the calendar year, nearly 72% involved organizations with fewer than 500 employees. Within that data set, we found that four of every five victim organizations had fewer than 100 employees; more than half had fewer than 25 employees.”

Overall, they found:

Hiscox Embezzlement Watchlist

It is particularly interesting to note that women orchestrate the majority of these thefts (61%) – a rarity in many kinds of crime. Yet the wage gap extends even to ill-gotten gains, Hiscox found: While they were responsible for more of these actions, women made nearly 30% less from these schemes than men.

Drilling down into specific industries, Hiscox found that financial services companies were at the greatest risk, with over 21% of employee thefts – the largest industry segment – targeting an organization in this field, including banks, credit unions and insurance companies. Other organizations frequently struck by employee theft include non-profits (11%), municipalities (10%) and labor unions (9%). Groups in the financial services, real estate and construction, and non-profit sectors had the greatest total number of cases in the Hiscox study, while retail entities and the healthcare industry suffered the largest median losses.

For more of the report’s insight on specific industries, check out the infographic below:

Hiscox Embezzlement Watchlist Targeted Industries