Larry Ponemon

The purpose of this research is to understand how COVID-19 has impacted how healthcare delivery organizations protect patient care and patient information from increasing virulent cyberattacks, especially ransomware. Prior to COVID-19, 55 percent of respondents say they were not confident they could mitigate the risks of ransomware. In the age of COVID-19, 61 percent of respondents are not confident or have no confidence.

Sponsored by Censinet, Ponemon Institute surveyed 597 IT and IT security professionals in HDOs. In the context of this research, HDOs are entities that deliver clinical care and rely upon the security of third parties with whom they contract services and products. These include integrated delivery networks, regional health systems, community hospitals, physician groups, and payers.  Click here to visit Censinet and download the full report.

Our findings correlated increasing cyberattacks, especially ransomware, with negative effects on patient care, exacerbated by the impact of COVID on healthcare providers. We also analyzed steps that HDOs are taking to protect patient safety, data, and care operations to determine what is working since so many respondents have been victims of more than one ransomware attack.

Ransomware attacks on healthcare organizations can be a life-or-death situation.

The onset of COVID-19 introduced new risk factors to HDOs, including remote work, new systems to support it, staffing challenges, and elevated patient care requirements. There’s been a great deal of media coverage on the rise of cyberattacks such as ransomware both within the healthcare industry and beyond. This research focuses on the healthcare industry to understand the extent to which HDOs are being targeted and ascertain the impact of those attacks. Both are covered in-depth in the key findings section of the report.

Over the last two years, 43 percent of respondents say their HDOs experienced a ransomware attack. Of these respondents, 67 percent of respondents say their HDO had one and 33 percent of respondents say they experienced two or more.

These attacks risk patient safety, data, and overall care availability. Respondents report that ransomware attacks had a significant impact on patient care, reporting longer length of stay (71 percent of respondents), delays in procedures and tests (70 percent of respondents), increase in patient transfers or facility diversions (65 percent of respondents) and an increase in complications from medical procedures (36%) and mortality rates (22%).

HDOs forecast that the number of contracted third parties will increase by 30 percent over the next 12 months

Driven by cost containment, regulatory directives and the demand for accessible, higher-quality patient care, HDOs have shifted to the digitization and distribution of health information. Moreover, medical devices, whether in patient rooms or labs, rely on network connectivity for operations and maintenance.

Nearly all of the technology components described are not developed by the HDO. These include software, services, and hardware development from organizations known as third parties. This study revealed that the average number of third parties that organizations contract with is 1,950, and this will increase to an average of 2,541 in the next 12 months.

Third-party products and services are a necessary and critical part of the HDO IT blueprint, but each brings another set of risk factors to the table. Some risks are inherent to the third party such as secure operating systems and other software in medical devices. Other risks involve how the HDOs deploy and use third parties, including storing protected health information (PHI) on cloud-based systems that weren’t meant to support it. In either case, the risk created by the third party or the HDO use of the third party needs to be managed. The burden is on the HDO to perform assessments throughout their relationship with the third party (e.g., procurement, implementation, usage, updates, termination, etc.).

Third-Party Risk Management is Hard, and COVID-19 Made it Worse

This research also looks at the capabilities and maturity of HDOs to manage third-party risk, both before and during COVID-19. According to only 44 percent of respondents, controls critical to assessing third-party risks are only partially accomplished in HDOs. Only 40 percent of respondents say their organization always completes a risk assessment of its third parties prior to contracting with them. However, 38 percent of respondents state the assessment findings are ignored by leaders.

Re-assessments are another critical part of third-party risk management and are not conducted as often as required. More than half (53 percent) of respondents say re-assessments are conducted only on-demand or on no regular schedule.

Recommendations for Mitigating Ransomware and Third-Party Risks

According to the findings, healthcare organizations are less prepared to deal with third-party risks. Following are recommended steps for HDOs to take to protect patient safety, data, and care operations.

• Invest in workflow automation, resources, and processes to establish a digital inventory of all third parties and PHI records. An HDO must know the number and location of PHI records that are accessed, transmitted or stored by third-party products or services.
• Increase overall risk coverage of third parties by leveraging automation to conduct more assessments. The average number of third parties that organizations contract with is expected to increase from 1,950 to 2,541 over the next 12 months. However, only 40 percent of respondents say their organizations always complete a risk assessment prior to engaging with a third party. If their organizations conduct an assessment, only 38 percent of respondents say their leaders always accept their recommendation not to contract with them.

• Allocate resources and funding to re-assess high-risk third parties. Currently, only an average of 32 percent of critical and high-risk third parties are assessed annually, and only an average of 27 percent of these third parties are re-assessed annually.

• Increase efforts to secure medical devices. Only 36 percent of respondents say their organizations know where all medical devices are. Only 35 percent of respondents say they know when a medical device vendor’s operating device is end-of-life or out-of-date. Only 29 percent of respondents say they know the non-planned expense of medical device operating system patches.

• Ensure critical steps for identifying and mitigating third-party risks are in place. Sixty percent of organizations represented in this research had a data breach in the past two years, resulting in an average of 28,505 records containing sensitive and confidential information compromised. According to the research, organizations can only partially evaluate the various threats targeting their assets and IT vulnerabilities. They also lack the capability to continuously monitor vendor risks.

• Assign risk accountability and ownership to one role. The ability to execute an enterprise-wide risk management strategy is affected by not assigning accountability and ownership to one role.

Click here to visit Censinet and download the full report.

Bob Sullivan

It’s the news feed, stupid. The algorithm.

You’re probably going to read 1,000 things about the recent Facebook whistleblower hearing, so I won’t belabor the discussion. I have just one point I’d like to drive home. But first– I will say I’m sad that, after all this time, journalists from all over give prominent placement to the disinformation published by Facebook about Facebook — The New York Times felt the need to put the firm’s misdirection statement about the hearings in the fourth paragraph of its story about the hearings, showing journalists have learned little about the way both-sides-ism is abused in the information age.   I won’t repeat it here, but suffice to say the company just attacked the message without disputing any of the messages.

I’d like people to focus on something simple and often overlooked when it comes to the harm Facebook’s apps cause in the world: Control of the news feed.   Witness Fraunces Haugen talked quite a bit about Instagram and Facebook’s use of “engagement-based ranking” for items that appear before users.  You can’t pick what appears on these apps, not really. Facebook picks. And it picks the most extreme, most manipulative, most addictive content it can place in front of you. All the time.

Facebook has spent billions of dollars hacking you. Researching you. Picking you apart. Finding your weakness. And then feeding it. Like candy bars with too much sugar, or better yet, opioids that ease the pain just enough. Well, nearly enough, but not quite. So, you must come back for more, and more, and more.   To one man, it’s angry Trump content. To a young woman, it’s workout videos. Still another gets climate change outrage, or posts about the Latin Mass.  Facebook doesn’t care.  Like an evil creature from a science-fiction movie, it finds your weakness and exploits it. To feed the ever-hungrier beast inside.

This is “engagement-based ranking,” as Haugen called it.  And when we like or share these addictive things, we “give little hits of dopamine” to our friends.  Like a nightmare digital drug gang — *shiver*

Users have forever asked for a simpler way.  They want control of the news feed, or the way Instram picks images to display.  Consumers have forever wanted a simple page full of close friends’ posts.  Babies, weddings, the occasional professional announcement.  This request has been denied over and over by Facebook.  In fact, the company has stopped outside firms from creating plugins that would enable just that simple feature.  Why?    Haugen explained: Engagement would fall. Clicks would drop. Revenue would fall.

Facebook claims the reason is something else: User-directed feeds would be full of spam and other annoying content. That reasoning — Facebook-i-an NewsSpeak — is so bogus I hesitate to repeat it.  We all deal with spam, every day. We could handle it on Facebook and Instagram in exchange for ending the tool’s ever-increasing, artificial intelligence-fueled addictive algorithm.

So as Congress and other law enforcement ponder what should happen now, here’s my wish list of one: Require Facebook to let users opt out of the algorithm.  Or, as  Haugen suggested, end Section 230 protections for algorithm-programmed content farms.  If they pick the things we see, they should be responsible for them. I’m not saying this would fix every problem. But it sure would fix a lot. And it could happen….immediately.

It’s not that hard to fix. We’ve just failed…so far.  Tim Sparapani, another former Facebook employee, told me that last year in my “Original Sin of the Internet” podcast. It’s more true than ever now.

Ponemon Institute is pleased to present the findings of the 2021 Global Encryption Trends Study, sponsored by Entrust. We surveyed 6,610 individuals across multiple industry sectors in 17 countries – Arabian Cluster (which is a combination of respondents located in Saudi Arabia and the United Arab Emirates), Australia, Brazil, France, Germany, Hong Kong, Japan, Mexico, Netherlands, the Russian Federation, Spain, Southeast Asia, South Korea, Sweden, Taiwan, the United Kingdom, and the United States.

The purpose of this research is to examine how the use of encryption has evolved over the past 16 years and the impact of this technology on the security posture of organizations. The first encryption trends study was conducted in 2005 for a US sample of respondents.  Since then we have expanded the scope of the research to include respondents in all regions of the world.

Since 2015 the deployment of encryption has steadily increased. This year, 50 percent of respondents say their organizations have an overall encryption plan that is applied consistently across the entire enterprise and 37 percent of respondents say they have a limited encryption plan or strategy that is applied to certain applications and data types, a slight decrease from last year. Following are the findings from this year’s research:

Strategy and adoption of encryption

Enterprise-wide encryption strategies increase. Since conducting this study 16 years ago, there has been a steady increase in organizations with an encryption strategy applied consistently across the entire enterprise. In turn, there has been a steady decline in organizations not having an encryption plan or strategy. The results have essentially reversed over the years of the study.

Certain countries have more mature encryption strategies. The prevalence of an enterprise encryption strategy varies among the countries represented in this research. The highest prevalence of an enterprise encryption strategy is reported in Germany, the United States, Japan and the Netherlands. Respondents in the Russian Federation and Brazil report the lowest adoption of an enterprise encryption strategy. The global average of adoption is 50 percent.

The IT operations function is the most influential in framing the organization’s encryption strategy over the past 14 years. However, in the United States the lines of business are more influential (305percent of respondents). IT operations are most influential in Sweden, Korea and France.

Trends in adoption of encryption

 The use of encryption increases in all industries Results suggest a steady increase in all industry sectors, with the exception of communications and service organizations. The most significant increases in extensive encryption usage occur in manufacturing, hospitality and consumer products.

 The extensive use of encryption technologies increases. Since we began tracking the enterprise-wide use of encryption in 2005, there has been a steady increase in the encryption solutions extensively used by organizations.

Threats, main drivers and priorities

Employee mistakes continue to be the most significant threats to sensitive data. The most significant threats to the exposure of sensitive or confidential data are employee mistakes.

In contrast, the least significant threats to the exposure of sensitive or confidential data include government eavesdropping and lawful data requests. Concerns over inadvertent exposure (employee mistakes and system malfunction) significantly outweigh concerns over actual attacks by temporary or contract workers and malicious insiders.

The main driver for encryption is the protection of customer’s personal information. Organizations are using encryption to protect customers’ personal information (54 percent of respondents), to protect information against specific, identified threats (50 percent of respondents), and the protection of enterprise intellectual property (49 percent of respondents).

A barrier to a successful encryption strategy is the ability to discover where sensitive data resides in the organization. Sixty-five percent of respondents say discovering where sensitive data resides in the organization is the number one challenge. Forty-three percent of all respondents cite initially deploying encryption technology as a significant challenge. Thirty-four percent cite classifying which data to encrypt as difficult.

Deployment choices

No single encryption technology dominates in organizations. Organizations have very diverse needs. Internet communications, databases and internal networks are the most likely to be deployed and correspond to mature use cases. For the fourth year, the study tracked the deployment of encryption of IoT devices and platforms. Sixty-one percent of respondents say encryption of IoT platforms devices and 61 percent of respondents say encryption of IoT platforms have been at least partially deployed.

Encryption features considered most important

Certain encryption features are considered more critical than others. According to the consolidated findings, system performance and latency, management of keys and enforcement of policy are the three most important encryption features.

Which data types are most often encrypted? Payment related data and financial records are most likely to be encrypted as a result of high-profile data breaches in financial services. The least likely data type to be encrypted is health-related information and non-financial information, which is a surprising result given the sensitivity of health information.

Attitudes about key management

How painful is key management? Fifty-six percent of respondents rate key management as very painful, which suggests respondents view managing keys as a very challenging activity. The highest percentage pain threshold of 69 percent occurs in Spain. At 37 percent, the lowest pain level occurs in France. No clear ownership and lack of skilled personnel are the primary reasons why key management is painful.

Importance of hardware security modules (HSMs)

The United States, Germany and Japan organizations are more likely to deploy HSMs. T United States, Germany and Japan are more likely to deploy HSMs than other countries. The overall average deployment rate for HSMs is 49 percent.

How HSMs in conjunction with public cloud-based applications are primarily deployed today and in the next 12 months. Forty-one percent of respondents say their organizations own and operate HSMs on-premise, accessed real-time by cloud-hosted applications and 39 percent of respondents rent/use HSMs from a public cloud provider for the same purpose. The use of HSMs with Cloud Access Security Brokers and the ownership and operation of HSMs on premise are expected to increase significantly.

The overall average importance rating for HSMs, as part of an encryption and key management strategy in the current year is 66percent. The pattern of responses suggests the United States, Arabia (Middle East) and the Netherlands are most likely to assign importance to HSMs as part of their organization’s encryption or key management activities.

What best describes an organization’s use of HSMs? Sixty-one percent of respondents say their organization has a centralized team that provides cryptography as a service (including HSMs) to multiple applications/teams within their organization (i.e. private cloud model). Thirty-nine percent say each individual application owner/team is responsible for their own cryptographic services (including HSMs), indicative of the more traditional siloed application-specific data center deployment approach.

What are the primary purposes or uses for HSMs? The three top uses are application-level encryption, SSL/TLS, followed by container encryption/signing services. There is a significant increase in the use of database encryption 12 months from now.

Cloud encryption

 Sixty percent of respondents say their organizations transfer sensitive or confidential data to the cloud whether or not it is encrypted or made unreadable via some other mechanism such as tokenization or data masking. Another 24 percent of respondents expect to do so in the next one to two years. These findings indicate the benefits of cloud computing outweigh the risks associated with transferring sensitive or confidential data to the cloud.

How do organizations protect data at rest in the cloud? Thirty-eight percent of respondents say encryption is performed on-premise prior to sending data to the cloud using keys their organization generates and manages. However, 36 percent of respondents perform encryption in the cloud, with cloud provider generated/managed keys. Twenty-one percent of respondents are using some form of Bring Your Own Key (BYOK) approach.

What are the top three encryption features specifically for the cloud? The top three features are support for the KMIP standard for key management (59 percent of respondents), SIEM integration, visualization and analysis of logs (59 percent of respondents) and granular access controls (50 percent of respondents).

 Read the full Global Encryption Trends story at Entrust’s website.

Bob Sullivan

Facebook profits from advertisements it knows, or should know, are fraudulent, a federal lawsuit filed in  California alleges. The social media giant makes it easy for criminals to target consumers who are not only likely to click on certain kinds of ads, but also likely to follow through with purchases, the case claims.  The firm is “actively soliciting, encouraging, and assisting scammers,” the suit claims.

Alleged frauds include ads for products that never ship, or are substantially different from what is advertised. Fraud rates for some types of ads are as high as 30%, the suit claims.

Not only does Facebook look the other way when such ads are placed, but it has actively recruited suspicious sellers through conferences and other means, the case claims. Lawyers for the plaintiffs seek class-action status for the case, and claim there are potentially millions of victims and Facebook has earned billions of dollars.

Facebook did not immediately respond to a request for comment about the lawsuit (I’ll update the story if needed).

Tech companies have faced allegations they profit off fraud enabled by their platforms for a long time. Journalists have been writing about fake Google Maps businesses for at least seven years.  Instagram fraud had its day in the sun back in 2018. The firms make money off disinformation, too. Recently, I searched for “Can I get the vaccine from my doctor” on Google and was presented with a long list of anti-vaxx links and products for sale.

There have long been questions about how hard these services work to correct these problems. “More than a third (34%) of people that reported a scam ad to Google said it was not taken down while just over a quarter (26%) said the same had happened with Facebook, according to a study published by British consumer group Which?” BusinessInsider has reported.

The recent Facebook case, filed in August, alleges negligence, breach of contract, and breach of covenant of good faith and fair dealing. It builds on the work of several journalists who have written about Facebook ad fraud in recent years — most notably Zeke Faux’s story in 2018, which includes details from a Facebook ad conference that Bloomberg attended; and a Buzzfeed story from last year, titled Facebook Gets Rich Off Of Ads That Rip Off Its Users. 

The California lawsuit claims that “Facebook’s sales teams have also been aggressively soliciting ad sales in China and providing extensive training services and materials to China-based advertisers, despite an internal study showing that nearly thirty percent (30%) of the ads placed by China-based advertisers — estimated to account for $2.6 billion in 2020 ad sales alone — violated at least one of Facebook’s own ad policies.”

It also cites increased social media advertising fraud complaints, driven most recently by stay-at-home orders during the pandemic. “In October 2020, the Federal Trade Commission (“FTC”) reported that about 94% of the complaints it collected concerning online shopping fraud on social media identified Facebook (or its Instagram site) as the source,” the case notes.

Facebook denied to Buzzfeed that it profits off fraud. It told the news site: “Bad ads cost Facebook money and create experiences people don’t want. Some of the things raised in this piece are either misconstrued or missing important context. We have every incentive — financial and otherwise — to prevent abuse and make the ads experience on Facebook a positive one. To suggest otherwise fundamentally misunderstands our business model and mission.”

But it’s hard to deny the incentives large tech companies have to look the other way when companies are paying them millions of dollars to get finely-tuned ads in front of users.

In the lawsuit, plaintiff Christopher Calise says he spent about $50 to buy a car engine assembly kit and never received it. He reported the ad as fraud to Facebook, and the social media company took it down, but the alleged scam firm was able to re-place the ad using a slightly different name soon after.   Plaintiff Anastasia Groschen says she responded to an ad for a child’s activity board. When a simple puzzle arrived instead, she complained to the company, only to be instructed that she’d have to pay to ship the puzzle back to China.

The lawsuit seeks monetary damages for all impacted members of the class, and wants the court to force Facebook to make immediate changes to the way it patrols ads.

Ponemon Institute is pleased to present the results of The 2021 Cost of Phishing Study sponsored by Proofpoint. Initially conducted in 2015, the purpose of this research is to understand the risk and financial consequences of phishing. For the first time in this year’s study we look at the threats and costs created by business email compromise (BEC), identity credentialing and ransomware in the workplace.

The key takeaway from this research is that the costs have increased significantly since 2015. Moreover, with the difficulty many organizations have in securing a growing remote workforce due to COVID-19, successful phishing attacks are expected to increase.

We surveyed 591 IT and IT security practitioners in organizations in the United States. Forty-four percent of respondents are from organizations with 1,000 or more employees who have access to corporate email systems.

The following findings reveal that phishing attacks are having a significant impact on organizations not only because of the financial consequences but also because these attacks increase the likelihood of a data breach, decrease employee productivity and increase the likelihood of a business disruption.

The cost of phishing more than tripled since 2015. The average annual cost of phishing has increased from $3.8 million in 2015 to $14.8 million in 2021.The most time-consuming tasks to resolve attacks are the cleaning and fixing of infected systems and conducting forensic investigations. Documentation and planning represent the least time-consuming tasks.

Loss of employee productivity represents a significant component of the cost of phishing. Employee productivity losses are among the costliest to organizations and have increased significantly from an average of $1.8 million in 2015 to $3.2 million in 2021. Employees are spending more time dealing with the consequences of phishing scams. We estimate the productivity losses based on hours spent each year by employees/users viewing and possibly responding to phishing emails averages 7 hours annually, an increase from 4 hours in 2015.

The cost of resolving malware infections has doubled total cost of phishing. The average total cost to resolve malware attacks is $807,506 in 2021, an increase from $338,098. Costs due to the inability to contain malware have more than doubled from an average of $3.1 million to $5.3 million.

Credential compromises increased dramatically. As a result, organizations are spending more to respond to these attacks. The average cost to contain phishing-based credential compromises increased from $381,920 in 2015 to $692,531 in 2021. Organizations are experiencing an average of 5.3 compromises over the past 12-month period.

Credential compromises not contained have more than doubled. The average total cost of credential compromised not contained is $2.1 million and has increased significantly from $1 million in 2015.

BEC is a security exploit in which the attacker targets employees who have access to an organization’s funds or data. The average total cost of BEC’s exploits was $5.96 million (see Table 1a). Based on the findings, the extrapolated average maximum loss resulting from a BEC attack is $8.12 million. The average total amount paid to BEC attackers was $1.17 million.

What is the cost of business disruption due to ransomware? Ransomware is a sophisticated piece of malware that blocks the victim’s access to his/her files. The average total cost of ransomware last year was $5.66 million, and the average percentage rate of ransomware attacks from phishing was 17.6 percent.

Employee training and awareness programs on the prevention of phishing attacks can reduce costs. Phishing attacks are costing organizations millions of dollars. According to the research, the average annual cost of phishing scams is $14.8 million, an increase from $3.8 million in 2015.

Respondents were asked to estimate what percentage of phishing costs that could be reduced through training and awareness programs that specifically address the risks of phishing attacks targeting the workforce.  The cost can be reduced by an average of more than half (53 percent) if training is conducted.

Part 2. Key findings

Loss of employee productivity represents a significant component of the cost of phishing.
The average annual cost of phishing has increased from $3.8 million in FY2015 to $14.83 million in 2021. As shown, productivity losses have increased significantly from $1.8 million in 2015 to $3.2 million in FY2021. Please note that information about BEC and ransomware was not available in FY2015. In the current study, we estimate an annual cost of phishing for BEC at $5.97 million and ransomware at $996 thousand.

Employees are spending more time dealing with the consequences of phishing scams. The range of hours is less than 1 to more than 25 hours per employee each year. We estimate the productivity losses based on hours spent each year by employees/users viewing and possibly responding to phishing emails. As shown, each employee wastes an average of 7 hours annually due to phishing scams, an increase from 4 hours in 2015.

As discussed, the costliest consequence of a successful phishing attack is employees’ diminished productivity. Here we assume an average-sized organization with a headcount of 9,567 individuals with user access to corporate email systems.  Based on an average of 7 hours per employee we calculate 65,343 hours wasted because of phishing.  Assuming an average labor rate of $49.5 for non-IT employees (users) we calculate a total productivity loss of $3.2 million annually, an increase from $1.8 million in 2015.

An average of 15 percent of an organization’s malware infections are caused by phishing scams. Respondents were asked to estimate the percentage of malware infections caused by phishing scams. The estimated range is less than 1 percent to more than 50 percent. The extrapolated average rate is 15 percent. As discussed above, the cost to contain malware is estimated to be $353,582 (see Table 1).

The likelihood of a malware attack causing a material data breach due to data exfiltration has increased since 2015. In the context of this research, a material data breach involves the loss or theft of more than 1,000 records. Respondents were asked to estimate the likelihood of this occurring. The probability distribution ranged from less than .1 percent to more than 5 percent. The extrapolated average likelihood of occurrence is 2.3 percent over a 12-month period, an increase from 1.9 percent.

The total cost attributable to malware attacks caused by phishing scams more than doubles. The total cost to resolve malware attacks is $807,506 in 2021, an increase from $338,098 in 2015.

Phishing costs due to the inability to contain malware have more than doubled and represents 11 percent of the total cost of phishing.  Malware not contained is malware at the device level that has evaded traditional defenses such as firewalls, anti-malware software and intrusion prevention systems. Following are two attacks caused by an active malware attack that are difficult to contain: (1) data exfiltration (a.k.a. material data breach) and (2) business disruptions. The total cost of malware not contained has increased from $3.1 million to $5.3 million.

A malware attack resulting in a data breach due to data exfiltration could cost an organization an average of $137.2 million. The following formula is used to determine the probable maximum loss (PML) and the likelihood of such an attack:

What is the cost of business disruption due to a malware attack? Respondents were asked to estimate the PML resulting from business disruptions caused by a malware attack. Business disruptions include denial of services, damage to IT infrastructure and revenue losses. The distribution of maximum losses ranges from less than $10 million to $500 million. The extrapolated average PML resulting from data exfiltration is $117.3 million, an increase from $66.3 million.

How likely are business disruptions caused by a malware attack will affect your organization? Respondents were asked to estimate the likelihood of material business disruptions caused by malware. The probability distribution ranges from less than .1 percent to more than 5 percent. The extrapolated average likelihood of occurrence is 2.1 percent over a 12-month period, an increase from 1.6 percent in 2015.

Visit Proofpoint’s website to download the entire 2021 Cost of Phishing Report

Bob Sullivan

How do you catch Internet con artists? Well, you con them.

Alan, who lives near Washington D.C., had traveled to Dubai and to Ghana thinking he was helping a princess gain access to her multi-million dollar inheritance.  Before his fever was broken, Alan — not his real name — sent about $600,000 to a man named Eric and a woman who called herself “Precious.”  By the time the FBI got involved, it was too late for Alan’s money.  But Alan did have a photograph of the two criminals, taken in Dubai.  When a rookie FBI agent named Mike saw that, he decided there might be just enough evidence to pursue the criminals through cyberspace.

He had one big problem, however. Agent Mike — we’re protecting his identity — couldn’t fly to Dubai or Ghana and arrest them. He had to get them to fly, willingly, to the U.S.

You don’t often get to hear an FBI agent talk about chasing after online criminals. And rarely do stories involving $600,000 sent overseas to criminals have a happy ending. But in this recent episode of The Perfect Scam, I pull back the curtain on a remarkable piece of crime-fighting and a relentless pursuit by one very determined agent.

Listen to this episode by clicking here, or by clicking the play button below.  Below that, a partial transcript appears. It’s a two-part episode. You can hear part 2 at this link, or hit the second play button below.

———-PARTIAL TRANSCRIPT—————-

FROM PART 1

[00:06:25] Mike: Yeah, it’s almost heartbreaking, because when you read the transcripts, you can see how the victim actually thinks it’s real. I mean he’s actually saying things like, “Well when can I meet you,” or “Can you send me more pictures?” The scammer usually almost always just returns to, “Oh I love you so much,” et cetera, et cetera, you know, “How are you?” that kind of thing. And it’s just so one-sided in terms of the victim is like actually trying to have a relationship, but the scammers are just uh clearly have an agenda on their mind. And then uh, it will, you know, usually transition then to, “Oh, hey something terrible just happened. My mother just got into a car accident,” “We’re overseas for the moment,” or “My, my dad’s uh late on his rent,” or “I’m late on my rent,” or something like that. “Can you just send me, MoneyGram me uh, 500 bucks, ” or something like that.

[00:07:13] Bob: But those smaller asks are just the beginning of the crime. Soon, Precious starts to tell a much bigger story to Alan.

[00:07:21] Mike: One thing that happened, which I’ve come to realize this might be a common thing for scammers from Ghana, is that the uh the women, in this case, Precious, eventually will let the victim know that, “I am actually an African princess, I’ve actually inherited millions of dollars’ worth of gold, it’s back overseas in Ghana, and here’s my lawyer,” you know. In, in this case Precious had a lawyer named Eric, and other, other scammers will introduce other like a, they’ll, they’ll almost always introduce a second player, um, like a second figure. And then the lawyer will come in, in this case, Eric, with a very formal sounding, uh you know, email signature block and very formal sounding, uh, language and write, you know, big, long paragraphs, with very lawyerly sounding text to say, “I understand, Alan, that you’re here to help Precious. Uh, that’s a great thing that you’re doing. And in order to have her, you know, receive her inheritance of millions of dollars which will help her and her family, you need to start paying,” you know, this and that for legal documents, for shipping fees, et cetera, et cetera.

[00:08:40] Bob: So far, this looks like a crime that FBI agents unfortunately see pretty often, but as Mike keeps reading, he confirms one of his chief suspicions. That trip to Dubai and Ghana, that means the crime went a whole lot farther.

[00:08:55] Mike: Eventually, I think the reason to get Alan on a plane was so that he could meet the supposed lawyer, Eric, in Dubai so that they could sign some legal documents towards the uh, the release of the gold.

[00:09:08] Bob: And what did he actually sign when he got to Dubai?

[00:09:11] Mike: It was just, you know, something that you could drum up on Microsoft Word in 10 minutes.

[00:09:16] Bob: So this, this was still all just a, a movie scene that they were playing out for him. Um, well did you see the part of the discussion where he said, yes, I’ll, I’ll fly, I’ll get on an airplane? I mean, that must be amazing to see in black and white.

[00:09:30] Mike: Yep, we saw that. I think it must have been several months into their, the scam where he actually got onto the plane, if I recall correctly. But uh yep, they met in Dubai. That was actually one of the reasons why I decided that we could probably take on this case, because he had actually gone overseas, and he actually met these people in person, at least Alan could pick them out from a lineup, for example.

[00:09:55] Bob: He could pick Precious and Eric out of a lineup, if ever there were a way to get them into a lineup. But maybe even more important, there’s pictures.

[00:10:06] Mike: Yeah, so they meet in Dubai. It’s Eric and Precious. It’s uh, an African man and a Caucasian woman claiming to be Eric and Precious, and they have Alan pay for the hotel, they have Alan pay for the meals, everything. In fact, I think there’s this picture of Alan with uh, Eric and Precious in like, it looks like a Chili’s or something in the Dubai airport. It was one of the first times that we actually saw the scammers for real when, uh Alan shared that picture with us.

[00:10:34] Bob: Okay, yeah. Now before we go on, you have a picture of them at, of the three of them at a, at a Chili’s in Dubai?

[00:10:40] Mike: I, I don’t know what restaurant it is, but it looked like, you know, uh there’s, there’s a few more pictures of them at the uh, the Dubai airport, so you know, it’s just pretty good uh proof that corroborates the story.

[00:10:53] Bob: That’s, I’m almost, I’m kind of amazed that they were brazen enough to pose for a picture like that.

[00:10:58] Mike: You know, it’s um, sometimes I think about that, too. So I think from the perspective of a scammer, it’s really a risk/reward calculation they have to make because uh, when you’re trying to scam these folks, if you, you know, obviously, you know, it’s a romance scam, so your victim wants to meet you because you guys are supposed to be in love. So if you never meet with the victim, obviously they will start to get suspicious after a while. And there’s only so much that you can keep the victim on the hook for, there’s only so, so much money you can squeeze out of them. However, if you take the risk and you actually meet with the victim, and you have the uh, I guess the props to show that this is actually a true story, then you’ve got the victim hooked for even more, right. Now he knows it’s real.

(MUSIC SEGUE)

[00:11:43] Bob: Mike says the three of them looked pretty jolly in the photos, like they’re on vacation together.

[00:11:48] Mike: Eric and Alan, just kind of posing, big smiles somewhere, it must have been somewhere in Dubai, if I recall correctly. And then, when we saw pictures of Precious, she was indeed a Caucasian young woman. She must, she must have been in her mid–, she looked like she was in her mid-20s. Eric looked like he was a bit older, probably in his 40s, but you know, the pictures that Precious had been sending to Alan via Skype were, you know, pictures of just gorgeous women that you find on the internet, right, and it was pretty clear that the Precious in real life was not the same.

[00:12:26] Bob: Eventually, the group gets down to business. But they don’t stay in Dubai very long.

[00:12:31] Mike: After signing these documents for the uh, supposed gold, Eric kind of suddenly proposes to Alan, “Hey why don’t I take you to Ghana so that you could actually see the gold for yourself, and so that you can actually see all of Precious’s inheritance, so that you know it’s real.” And then um, the real reason that Eric’s doing this is because he wants to get Alan on some more scams that he has waiting for him back in Ghana. From there, Precious actually goes back to her home country; we found out later that was Ukraine. Eric, I think he just takes Alan’s credit cards, and he just buys tickets for them to go from Dubai to Ghana.

[00:13:08] Bob: And when they get to Ghana, Eric puts on quite a show for Alan.

[00:13:12] Mike: Pretty shortly after they landed, Eric takes Alan to what sounds like some sort of compound or some sort of building that he has, and inside is what Alan described as some sort of safety deposit box. Unfortunately, there was no pictures uh really from, that describe this, so I don’t, we don’t really have a good visual on it, but it looked pretty official. Uh, Alan, you know, Alan described that there was like a bank guard there, and there were some other folks there, and so, you know, Eric does the whole “bring forth the gold” kind of thing. Alan describes um, the guards bringing over I guess a chest of, you know, gold bars, and uh Alan picked one up, and, and he said it sure felt like they were pretty heavy, so it must be gold.

[00:14:05] Bob: Wow, and but to Alan’s estimation, it was maybe millions of dollars’ worth of gold?

[00:14:10] Mike: Yeah, that’s what Eric was claiming the whole time. That was part of the story, so…

[00:14:14] Bob: Of course, Eric has another reason to bring Alan to Ghana. He wants to introduce Alan to another criminal with another elaborate story.

[00:14:23] Mike: Eric kind of uses this opportunity to, to introduce a, another scam. It’s another scam that we’ve heard of before, it’s sometimes you call it like, uh I’ve heard it referred to as like a kind of a washing the money scam, or the black money scam. There’s different variations of it, but really what it amounts to is a magic trick that is really impressive in the moment and really uh hooks your victim. And what Eric does is he says, okay, great, now you’ve seen Precious’s gold. I’d like to introduce you to another person. This person here is Daniel. Daniel’s about 18 years old. You know, he’s also some sort of African nobility. And Daniel’s there, and he’s smiling and he’s, you know, playing the part of a, a poor 18-year-old kid, and Eric’s just trying to help him out too, just the way like he’s trying to help out Precious. And Daniel has inherited a large quantity of, of sheets, uh, you know, just like you’ve seen those sheets that are uncut at the Treasury Department. But these sheets are worthless unless you start cutting them, and once you cut them all, then they’ll be worth millions, but uh, the way to cut them is, you can’t just use scissors. You need a chemical that only, Frank, the other character, he uses introduces guy, Frank. Frank was kind enough to bring it, so let me show you how it works. Puts the chemicals in a bowl, pours water over it, mixes it all up, and then he dips one of these sheets into the bowl, and you know, before Alan’s eyes, the sheets separate into the separate individual $100 bills. So, just like that, we made 400 bucks. And so Eric says, you know, it’s as simple as that, so if we want to start getting Daniel’s uh money, then we need to start paying money for the rest of the chemicals from Frank.

—-FROM PART 2—–

[00:04:24] Mike: Plan C was, you know with Alan’s permission, and also his wife, too, we, we kept the wife in the loop the entire time. I didn’t want her to feel like she was being excluded, but I asked them if they’d be willing to, you know, take some pictures of Alan in the hospital undergoing, well, post, uh, his medical procedures, and to go back to Eric and Precious and say, “Hey, you know, my health is really declining. I really want to help you, Precious, so uh, here’s proof that I can’t go overseas and see you. Why don’t you guys come over here, and we can do things like, I’ll put you in my will,” and so Precious will have, you know, $10,000 a month in perpetuity or something like that, or, or uh, I got a, another, another ruse that we started coming up with was, we had Alan say, “I’ve got a really rich businessman man and he’s really looking to invest in uh, in Africa, you know, and Africa’s the next place to invest in, especially with uh, raw minerals, and you, you seem to know a lot about gold, so yeah, this, yeah this rich businessman wants to meet you. He wants to talk about gold.” So we kind of started coming up with stories to uh, you know, scam Eric and Precious and Daniel with.

[00:05:40] Bob: It strikes me that it’s a good thing you work for the FBI. Otherwise you’d have another career that might not be as wholesome.

[00:05:46] Mike: Oh, (laugh). Well, sometimes you’ve got to think like scammers to catch them, so.

[00:05:52] Bob: Mike has to really work to open the door to the US for Precious and Eric. One of the most important steps, getting the State Department to issue a visa.

[00:06:01] Mike: We were kind of playing multiple stories at the same time, and I think the pictures of Alan, uh, you know, in the hospital, they were effective, but what was even more effective was we were telling Alan to ask Eric like, “Hey look, go to the Embassy in Ghana, apply for a visa, just get that process started,” and then I actually started kind of going behind the scenes, and I started, uh, talking to some reps at the State Department to say, like, hey look, we’re going to, we’re trying to set this up now, you know. This person, Eric, which I, you know, by that time we had kind of identified who Eric really was, he’s a criminal, he’s a, he’s a subject of an investigation, there’s an active FBI investigation on him. Here’s what, here’s kind of what’s going on. Basically I said, “I need you to give him a visa.”

(MUSIC SEGUE)

[00:06:51] Bob: Meanwhile, Mike is coaching Alan on what to say to Eric and Precious. They lay it on pretty thick.

[00:06:57] Mike: We had Alan say, “Hey, you got your visa, because my friend, my rich friend pulled some strings with the government.” That was the story that we were spinning towards him, and then we were saying, “Okay, well now my rich friend really wants to talk to you about gold, so he’s going to buy you a plane ticket.”

[00:07:11] Bob: Even after Mike gets the State Department to play along, there are still a whole lot of steps before Eric and Precious might actually get on a plane and land in a US airport where they can be apprehended. Would Eric even show up for his visa appointment? What if he got cold feet right before boarding the plane? You’d think Mike might be worried by these things, but he says he wasn’t.

[00:07:32] Mike: You know, it wasn’t really so much nervousness, I think, uh, just the way that we think here, we always have plan A, plan B, plan C, so this plan that we were setting forth, even though it was plan C, which is now plan A, we still had backup plans, you know, in place, so I knew that if Eric never really came here, or if uh, he never followed up on his visa appointment. We had other ways, you know, it’s just, you know at the FBI we just, we, time is on our side. So something would have come eventually. Like, for example, the UAE would have told us who these people really were. And so we could have, you know, these investigations drag on for a while, and eventually something would have broken, so I wasn’t um, part of me was like, there’s no way he’s actually going to do this. But even, and even if he didn’t, that would be okay, because this investigation will still be going forward.

[00:08:22] Bob: But, to the surprise of many agents involved, the plan works. Eric gets his visa and gets on a plane headed for Dulles Airport outside Washington DC.

[00:08:33] Bob: So it worked, okay. Are, are you there at the airport when they arrive?

[00:08:36] Mike: Yep, yes, it’s myself and a few more agents, and uh, um, you know we kind of confirmed with the Department of Homeland Security that he did indeed board the flight. We actually bought his plane ticket for him. And so we knew exactly when he was arriving. As he’s going through the immigration queues, one of the uh customs and border protection officers was with us, had kind of taken us behind the scenes at the airport. We saw him just going through. I think he had like a blue suit on, and uh, he had like one of those neck pillows. He looked very tired, obviously. We kind of pulled him out of the queue. We told him to sit in a, a place that’s called secondary inspection, uh with CBP at the airport. We just kind of looked at his uh travel documents again, just to confirm that he really was the person we were looking for, and we kind of went to him, kind of broke the bad news.

[00:09:34] Bob: What was the, the expression on his face when you did that?

[00:09:36] Mike: I think he was very tired. He was very jetlagged. He was very like, uh just absolute resignation. No fight, no denial, just okay, sure. Take me.

The treasure trove of customer data and financial information that government generates, stores and processes on a daily basis makes it a rich target for hackers. The purpose of this study is to understand the steps government agencies are taking to mitigate digital fraud risks and protect customer data. In the context of this study, customers are individuals who receive and use services from federal, state and local governmental agencies.

Digital services enable government to conveniently deliver information and services to customers anytime, anywhere and on any platform or device. However, such convenience needs to be supported by a strong security posture.

Sponsored by TransUnion, Ponemon Institute surveyed 594 IT and IT security practitioners who work in the federal, state and local/municipal government organizations  (click for full study). All respondents are familiar with their agency’s efforts to prevent and detect fraud and are aware of their agency’s information security vulnerabilities and threats. In addition to studying the state of security in government agencies, the research reveals respondents’ awareness of the extreme dissatisfaction customers have with the security and convenience of agencies’ websites. 

A key finding is that government agencies are not making the necessary investment in security technologies to protect customer data and make online access to accounts convenient. Only 43 percent of respondents say their agency has the security technologies necessary to provide customers with both a secure and convenient online experience when accessing their accounts. Another fraud risk is that only 37 percent of respondents say their agency makes it as easy as possible for customers to notify them if they believe their account has been compromised.

Following is a summary of digital fraud risks revealed in this research and the solutions needed to protect customer data and improve the online experience.

Similar to the commercial sector, government agencies are having multiple data breaches involving the loss or theft of customers’ personal information. These data breaches are most often caused by employee carelessness (64 percent of respondents). This indicates the need for regular training and awareness programs and enforceable privacy and security policies. An important part of this training should be to prevent phishing and social engineering attacks. The other top root causes are hackers (56 percent of respondents) and lost or stolen devices (52 percent of respondents).

Without having the necessary security technologies and in-house expertise most agencies find it impossible or very difficult to detect attacks. The most difficult types of attacks to detect are social engineering (66 percent of respondents), credential stuffing (60 percent of respondents) and knowing the real customer from a criminal imposter using stolen credentials (60 percent of respondents).

ATOs are on the rise and respondents believe mobile phones are most vulnerable to attacks. Mobile phones are ubiquitous, and 62 percent of respondents say they are the most vulnerable to ATO fraud. Further, not only are ATO attacks increasing, the severity of these attacks is also on the rise according to 59 percent of respondents.

Most agencies’ senior leadership are not prioritizing the ATO risk. Barriers to managing the risk of ATO fraud is that only 41 percent of respondents say senior leadership makes it a priority to prevent ATOs and only 38 percent of respondents say their agency regularly assesses the ability of its IT systems to prevent and detect fraud. As a consequence, only 37 percent of respondents say most ATO attacks are quickly detected and remediated and only 28 percent of respondents say their agency has a comprehensive view of its customers’ accounts.

To address the increase in account takeover attacks, agencies should consider a layered fraud management solution based on risk-based identity and device authentication. On average in the past two years, agencies have experienced 18 ATOs. More than half (53 percent) of respondents say they have significantly increased (19 percent) or increased (34 percent). Sixty-five percent of respondents say their agencies use two-factor authentication to reduce ATOs.

Polices for the prevention and detection of fraud are not reviewed as frequently as they should be. The threat landscape is constantly evolving but only 25 percent of respondents say these policies are reviewed monthly (12 percent) or quarterly (13 percent).

Accountability for managing fraud risks is dispersed throughout the organization. A possible reason for not prioritizing the digital fraud risks is that no single function emerges as most accountable. Twenty-one percent of respondents say it is in compliance/legal. Only 19 percent of respondents say the IT security leader is most accountable.

Without the necessary security technologies and support from senior leadership, it is difficult for agencies to be effective in protecting customers’ personal information.

Fifty percent say they are very effective or effective in reducing customer fraud, which means many agencies (50 percent of respondents) are not effective. Only 41 percent of respondents say their agencies are very effective in protecting customers’ personal information and only 38 percent are very effective in detecting and preventing account takeover fraud.

Customers are frustrated with the security and convenience of government websites. Only 27 percent of respondents say customers are satisfied with the convenience and 26 percent of respondents say customers are satisfied with the security of the website. As discussed previously, only 37 percent of respondents believe it is easy for customers to notify agencies if they believe their account has been compromised.

Artificial intelligence (AI) and improvements in identity authentication are considered important to improving the customer experience. Sixty-five percent of respondents say AI decision-making tools/technologies and interconnected devices will improve the ability to track customers’ status in order to improve the security and convenience when accessing online accounts. Sixty-one percent of respondents say improvement in identity authentication will improve the state of access governance and, therefore, improve customers’ user experience.

Download the full study at TransUnion.com

Bob Sullivan

I like a good challenge as a storyteller.  And let me tell you, making “third-party code” sound sexy is a challenge.  But that recent Apple ad showing an army of people following a cell phone user around, cataloging his every move — well, that’s real.  It’s hard to believe, but the commercial actually understates the problem.

Every day, with every click you make and every app you swipe, a virtual army of companies you’ve never heard of are tracking you.  Their 1×1 pixels and browser fingerprints lurk in every corner of the Internet, privacy landmines vacuuming up data about every aspect of your life.

I know you’ve heard this before, and I’ll bet you assume companies like Facebook and Google are tracking you to this degree — but you probably don’t realize, or don’t think about, the hundreds of small companies that attach themselves to name-brand websites like CNN.com which track you in the same way.

Why do they do that? So later, the billions of pieces of information collected about us can be married to billions of dollars being spent trying to get our attention.  Over and over and over: a mindless search for anxiety medicine or sexual dysfunction is auctioned off to the highest bidder, and shared with thousands of other firms. The result? A gigantic one-way mirror that not only intrudes on our most intimate thoughts but logs them forever, making them easy prey for murky data brokers and creepy hackers alike. For the rest of Internet time.

That’s what this podcast is about.  The Internet has a third-party problem — a number of third-party problems, really — and it’s time we talked about them.

To help me with this storytelling problem, I’ve enlisted the help of some real experts for this podcast — including Jeff Orlowski, director of the hit Netflix docu-drama The Social Dilemma. Orlowski certainly succeeded in making technology and privacy conflicts sexy. Also, you’ll hear from Chris Olson of The Media Trust; Jason Kint from Digital Content Next; and Jolynn Dellinger from Duke University. Debugger is brought to you by Duke University’s Sanford School of Public Policy and the Kenan Institute for Ethics.

Please listen to the podcast: If you prefer, a transcript of the show is below. If a play button doesn’t appear for you, click this link to listen.

The purpose of this research is to understand organizations’ approach to managing third-party remote access risk and to provide guidance, based on the findings, on how to prepare for the future. A significant problem that needs to be addressed is third parties accessing an organization’s networks and, as a result, exposing it to security and non-compliance risks.

Sponsored by SecureLink, Ponemon Institute surveyed 627 individuals who have some level of involvement in their organization’s approach to managing remote third-party data risks. They were also instructed to focus their responses on only those outsourcing relationships that require the sharing of sensitive or confidential information and involve processes or activities that require providing access to such information.

Organizations are having data breaches caused by giving too much privileged access to third parties. Only 36 percent of respondents are confident that third parties would notify their organization if they had a data breach involving their sensitive and confidential information. More than half (51 percent) of respondents say their organizations have experienced a data breach caused by a third party that resulted in the misuse of its sensitive or confidential information either directly or indirectly. There could possibly be more data breaches because of respondents’ lack of confidence that they would be contacted by their third parties, as discussed above.

In the past 12 months, 44 percent of respondents say their organizations experienced a data breach caused by a third party either directly or indirectly. Of these respondents, 74 percent of respondents say it was the result of giving too much privileged access to third parties.

The following findings reveal the risks created by third-party remote access

Organizations are at risk for non-compliance with regulations because third parties are not aware of their industry’s data breach reporting regulations.  On average, less than half of respondents (48 percent) say their third parties are aware of their industry’s data breach reporting regulations. Only 44 percent of respondents rate the effectiveness of their third parties in achieving compliance with security and privacy regulations that affect their organization as very high.

Managing remote access to the network is overwhelming. Seventy-three percent of respondents say managing third-party permissions and remote access to their networks is overwhelming and a drain on their internal resources. As a consequence, 63 percent of respondents say remote access is becoming their organization’s weakest attack surface.

It is understandable why 69 percent of respondents say cybersecurity incidents and data breaches involving third parties is increasing because only 40 percent of respondents say their organizations are able to provide third parties with just enough access to perform their designated responsibilities and nothing more. Further, only 37 percent of respondents say their organizations have visibility into the level of access and permissions for both internal and external users.

Many organizations do not know all the third parties with access to their networks. Only 46 percent of respondents say their organizations have a comprehensive inventory of all third parties with access to its network. The average number of third parties in this inventory is 2,368.

Fifty-four percent of respondents say they don’t have an inventory (50 percent) or are unsure (4 percent). Respondents say it is because there is no centralized control over third parties (59 percent) and 47 percent of respondents say it is because of the complexity in third party relationships.

Organizations are not taking the necessary steps to reduce third-party remote access risk. Instead of taking steps to stop third-party data breaches and cybersecurity attacks, organizations are mostly focused on collecting relevant and up-to-date contact information for each vendor.

Very few are collecting and documenting information about third-party network access (39 percent of respondents), confirmation security practices are in place (36 percent of respondents), identification of third parties that have the most sensitive data (35 percent of respondents), confirmation that basic security protocols are in place (32 percent of respondents) and past and/or current known vulnerabilities in hardware or software.

Most organizations are not evaluating the security and privacy practices of all third parties before they are engaged. Less than half of respondents (49 percent) say their organizations are assessing the security and privacy practices of all third parties before allowing them to have access to sensitive and confidential information.

Of these respondents, 59 percent of respondents say their organizations rely on signed contracts that legally obligates the third party to adhere to security and privacy practices. Fifty-one percent of respondents say they obtain evidence of security certifications such as ISO 2700/27002 or SOC. Only 39 percent of respondents say their organizations conduct an assessment of the third party’s security and privacy practices.

Reliance on reputation is why the majority of organizations are not evaluating the privacy and security practices of third parties. Fifty-one percent of respondents say their organizations are not evaluating third-parties privacy and security practices and the main reason is reliance on their reputation (63 percent of respondents) and data protection regulations (60 percent of respondents). However, as discussed previously, only 48 percent of respondents say their organizations are aware of their industry’s data breach reporting regulations. Less than half of respondents (48 percent) have confidence in the third party’s ability to secure information.

Organizations are in the dark about the third-party risk because most are not required to complete security questionnaires. An average of only 35 percent of third parties are required to fill out security questionnaires and only an average of 26 percent is required to conduct remote on-site assessments.

If organizations monitor third-party security and privacy practices, they mostly rely upon legal or procurement review. Only 46 percent of respondents say their organizations are monitoring the security and privacy practices of third parties that they share sensitive or confidential information with on an ongoing basis. Fifty percent of respondents say the law or procurement functions conduct the monitoring. Only 41 percent of respondents say they use automated monitoring tools.

Again, reliance on contracts is why 54 percent of respondents say their organizations are not monitoring the third parties’ security and privacy practices. Sixty-one percent of respondents say their organizations do not feel the need to monitor because of contracts and another 61 percent of respondents say they rely upon the business reputation of the third party.

Third-party risk in most organizations is not defined or ranked in most organizations. Only 39 percent of respondents say their third-party management program defines and ranks level of risk. The top three indicators of risk are poorly written security and privacy policies and procedures, lack of screening or background checks for third-party key personnel and history of frequent data breach incidents.

Organizations are ineffective in preventing third parties from sharing credentials in the form of usernames and passwords. Respondents were asked to rate their organizations effectiveness in knowing all third-party concurrent users, controlling third-party access to their networks and preventing third parties from sharing credentials in the form of usernames and/or passwords on a scale from 1 = not effective to 10 = highly effective. Only 41 percent of respondents say their organizations are very effective in controlling third-party access to their networks and preventing third parties from sharing credentials in the form of usernames and passwords.

Click here to access the full report at SecureLink’s website.

Bob Sullivan

What do you do if you think your friend is bugging you? I don’t mean bothering you. I mean…bugging you…using a device to listen to you, maybe e1ven recording your conversations, when you visit their home. Well, that’s the world most of us live in now. Personal assistants, many modern TVs, smart doorbells…they all incorporate listening devices. What if you don’t want to be surveilled like that? Should you ask your friends to turn off their Alexa when you walk in the door?  Should they offer?

Tech etiquette sounds like something maybe we should be talking to Ann Landers about politeness or whatnot, but in reality, tech etiquette has a very, very serious side. When somebody visits a friend’s home right now, it’s quite likely they have some kind of electronic devices that could be listening, smart, doorbells, smart televisions, personal assistance. What are the rules around these things? Social rules, legal rules, and what can be done about them.

For my latest episode of Debugger, I talked with Jolynn Dellinger, a privacy law professor at Duke University, where she is also a senior fellow at the Kenan Institute for Ethics.  (Kenan and Duke’s Sanford School of Public Policy support podcast).

You can listen by clicking here, or clicking the play button below if it appears in your browser. A short transcript follows.

[00:02:05] Jolynn:  I’ve just been thinking about it more recently with the proliferation of personal assistants like Alexa, Google Assistant. But I had a very interesting conversation on Twitter the other day with a bunch of random people that I don’t know. Uh, and it seemed to spark a lot of interest and along a lot of strong opinions about … What, what is the etiquette? And my question was .. When you go to somebody’s house, do you need to ask them whether they have always on listening devices or should a homeowner when you have people over as guests? Let those people know I have listening devices on? Is that okay? And this seems like a weird question because I don’t think anyone is engaging in this kind of etiquette right now.

And as a couple of people pointed out on the Twitter conversation, you know, this is just as important to ask with phones. Because folks who have their personal assistants activated on their phones, which I don’t, but some people do, whether it’s Siri or, or whatever on an Android, it presents the same issue of being always on.

And I think that raises some questions we should be talking about in terms of what’s appropriate in terms of potentially recording other people without their permission or consent

[00:03:27] Bob: Something I can’t even imagine right now. Welcome. Let me take your coat. Would you like a glass of wine and oh, are you okay if I record it this entire evening.

[00:03:36] Jolynn: Yes, exactly. Exactly. They’re not recording the entire evening and I don’t want to over-represent, but they are always listening and able to record. Of course.

But I think back in the day, well, at least when I was in college, it was almost people treated it almost like an imposition if you said you were a vegetarian. Right? Like they invite you to dinner and you’re like, okay, well I’m a vegetarian. Oh really? And so I think nowadays, when people invite someone over for dinner, they almost always say, are there any dietary restrictions? And I don’t know whether that’s because becoming vegetarian or vegan is more mainstream or there is a proliferation of allergies. You want to make sure somebody doesn’t have a nut allergy or, or something like that. So it’s gained acceptance over time and I’m kind of wondering if we should be heading in that direction with, surveillance technology.

[00:04:36] Bob: I wonder mechanically, how it would even be accomplished. So let’s say someone says, I just really morally opposed to having listening devices around me activated, how would someone turn off all their smart devices in a swoop like that?Is that even possible?

[00:04:53] Jolynn: I was asking that on Twitter. I mean, there are certainly people far more technologically proficient than myself and many pointed that out. Somebody said, well, I have 20 of those devices around my house. It would take me half an hour to go around and dismantle everything. And another person made a really good point as well. This person had some physical challenges, um, and was using listening devices in a way that enabled him or her to, to live a safe life. So that turning off those devices would actually pose a serious problem for that person. And I think, you know, we always need to be aware of that and, and I would never ask somebody to turn something off that they were using in that way.

I think the more common situation though, is folks using these for convenience or fun. And so they’re cooking and they can say, Alexa, play my blah-blah-blah playlist. And in that circumstance, I think that, um, my preference or anyone’s preference to not have the device on, uh, should supersede. However, do you just unplug it or do you put it in the microwave or the refrigerator? I mean, these were all things that were discussed on this Twitter thread, which was hilarious. Some people said it wouldn’t be that hard to disconnect.

[00:06:08] Bob: I was surprised to see several people …seemed to say, if you have a problem with my Siri or my Alexa, then I’m, I’m uninviting you. You’re not allowed in my house anymore. That was a shocking reaction to me.

[00:06:21] Jolynn: Right. I thought so too. And that’s what I was seeing. You know, if you invited your friend for dinner, I mean, we need to keep this focused on the fact that these are usually our friends that we’re inviting over and have you invited somebody for dinner? And they said, I’m a vegetarian. You likely would not say, well, tough. I’m having steak, right? I mean, that’s probably not what you would say. I think there are many, many technologies that we use. And part of the reason I pose this question is every time that we make personal decisions to use emerging technologies, surveillance technologies, and others, it may be something that affects only ourselves and our families, or maybe something that affects others.

And this even goes for a direct to consumer DNA test, right? That’s not protected. And your DNA gets out information about other people besides just you. And is that something where you should be asking your family before you send spit in a cup to 23 and me, um, other things around the house besides Alexa is like nest cameras.

You know, some folks have those around their homes so they can see in their children’s rooms when they’re out for the evening. Well, if I send my child over to play with that child is my child then being observed by those cameras? Internet of things, Barbie dolls that talk to children or other toys, rain cameras that maybe doing audio and video recording of conversations that take place outside people’s apartments or homes.

I think there’s a lot of these questions that we should be talking about

[00:07:54] Bob: So I had a Ring experience. I sold a house, not that long ago, and I put up a ring camera because I was going to be traveling during some of the process. And I put it up with the default settings and right away, a realtor and prospective buyer showed up at the house and I could hear them talking about my house and, and I thought to myself, I was horrified by this.

Of course, there was a piece of me that was tempted to listen in closely and say, oh, perhaps I should change the paint on that wall, everyone hates the color in the living room or whatnot. Right? But that would give me an unfair advantage potentially. And more than an unfair advantage. When I dug through the paperwork, uh, then the specifications on the Ring camera, it suggested to me that it might be an illegal wiretap to be recording people’s audio conversations without their knowledge. Aren’t a lot of these things potentially?

[00:08:44] Jolynn: I’m not really sure if there’s a lot of case law about that yet. I did see a case in New Hampshire where a judge said it was not a violation. And I think they might’ve had a two party consent rule there, where the judge said it was not a problem. I think it should be a problem.

Uh, I think that the basis of the decision there was, well, the conversation was taking place in a public space where you should expect … other people may be able to hear you. But I think when you’re standing on somebody’s porch, you don’t necessarily expect that. I think if you’re in an apartment building… say, and you live across the hall from someone who may have installed a Ring doorbell, you may know, you may not know if you come in with a friend and you’re unlocking your door and no one else is in the hallway.

[00:09:29] I think you naturally would expect privacy around that conversation. So you can disable the audio on Ring doorbells. And I think Amazon suggests that people may want to consider doing that if they feel the need, but I don’t think Amazon is providing legal advice.

[00:09:45] Bob: Yeah. And I disabled my audio immediately out of fear of just that. And it also, it seemed just wildly unfair, but that suggests that there’s perhaps more serious implications to some of this. And you raised one of the most serious of all, what might be the national security implications of all of these unintended overheard conversations.

[00:10:07] Jolynn: Well, that question didn’t get as much uptake on Twitter, but I’m very interested about it. I think there was a big deal about whether or not there could be a Peloton in the White House because of the various things … it can hear with, microphones or cameras. And I just wondered about all the people working from home who are dealing with classified or secure materials, confidential materials.

If they’re sitting in their office on a Zoom call and you question about it being a Aoom call and what devices do they have around them that may be picking things up and should that be not permissible?

[00:10:44] Bob: It’s not hard to imagine a foreign adversary figuring out how to wake up all of these listening devices without people’s knowledge and using it as a sort of extensive spy network.

[00:10:55] Jolynn: It seems possible. I just think as we get more and more of these ubiquitous technologies, we should all at least be willing to discuss and have a conversation about what’s the right thing to do here for our neighbors, friends, and family.

[00:11:13] Bob: Have you ever walked into a house and said to someone, is anything listening to me?

[00:11:17] Jolynn: Yes, I have. I have

[00:11:19] Bob: I was hoping you would say that. And what was the reaction?

[00:11:23] Jolynn: These are friends of mine, so they were nice about it. And one time I said the refrigerator might be a good place for that model.

[00:11:34] Bob: You can always put your gadgets in the fridge if you’re worried about them. Professor Jolynn Dellinger from Duke University, thank you very much for your time.