Category Archives: News coverage

Media reports that may interest you

Banks biased against black fraud victims

The following is an op-ed I wrote in today’s Times. It appeared in their Thunderer column.

You’re less likely to be treated fairly by your bank if you’re elderly, poor, female or black. We’ve suspected this for years, and finally The Times has dug up the numbers to prove it.

Fraud victims who’re refused compensation often contact our security research group at Cambridge after they find we work on payment fraud. We call this stream of complaints our ‘fraud telescope’ as it gives us early warning of what the bad guys are up to. We’ve had more than 2,000 cases over 25 years.

In recent years we’ve started to realise what we weren’t seeing. The “dark matter” in the fraud universe is the missing victims: we don’t see that many middle-class white men. The victims who do come to us are disproportionately elderly, poor, female, or black. But crime surveys tell us that the middle classes and the young are more likely to be victims of fraud, so it’s hard to avoid the conclusion that banks are less generous to some of their customers.

We raised the issue of discrimination in 2011 with one of the banks and with the Commission for Racial Equality, but as no-one was keeping records, nothing could be proved, until today.

How can this discrimination happen? Well, UK rules give banks a lot of discretion to decide whether to refund a victim, and the first responders often don’t know the full story. If your HSBC card was compromised by a skimmer on a Tesco ATM, there’s no guarantee that Tesco will have told anyone (unlike in America, where the law forces Tesco to tell you). And the fraud pattern might be something entirely new. So bank staff end up making judgement calls like “Is this customer telling the truth?” and “How much is their business worth to us?” This in turn sets the stage for biases and prejudices to kick in, however subconsciously. Add management pressure to cut costs, sometimes even bonuses for cutting them, and here we are.

There are two lessons. First, banks need to train staff to be aware of unconscious bias (as universities do), and monitor their performance.

Second, the Financial Conduct Authority needs to protect all customers properly. It seems to be moving in the right direction; after the recent fraud against tens of thousands of Tesco Bank account holders, it said it expected fraud victims to be made good immediately. This has been the law in the USA since the 1980s and it must become a firm rule here too.

Government U-turn on Health Privacy

Now that everyone’s distracted with the supreme court case on Brexit, you can expect the government to sneak out something it’s ashamed of. Health secretary Jeremy Hunt has decided to ignore the wishes of over a million people who opted out of having their hospital records given to third parties such as drug companies, and the ICO has decided to pretend that the anonymisation mechanisms he says he’ll use instead are sufficient. One gently smoking gun is the fifth bullet in a new webpage here, where the Department of Health claims that when it says the data are anonymous, your wishes will be ignored. The news has been broken in an article in the Health Services Journal (it’s behind a paywall, as a splendid example of transparency) with the Wellcome Trust praising the ICO’s decision not to take action against the Department. We are assured that “the data is seen as crucial for vital research projects”. The exchange of letters with privacy campaigners that led up to this decision can be found here, here, here, here, here, here, and here.

An early portent of this u-turn was reported here in 2014 when officials reckoned that the only way they could still do administrative tasks such as calculating doctors’ bonuses was to just pretend that the data are anonymous even though they know it isn’t really. Then, after the scandal showed that a billion records had been sold to over a thousand purchasers, we reported here how HES data had also been sold and how the minister seemed to have misled parliament about this.

I will be talking about ethics of all this on Thursday. Even if ministers claim that stolen medical records are OK to use, researchers must not act as if this is true; if patients end up trusting doctors as little as we trust politicians, then medical research will be in serious trouble. There is a video of a previous version of this talk here.

Meanwhile, if you’re annoyed that Jeremy Hunt proposes to ignore not just your privacy rights but your express wishes, you can send him a notice under Section 10 of the Data Protection Act forbidding him from disclosing your data. The Department has complied with such notices in the past, albeit with bad grace as they have no automated way to do it. If thousands of people serve such notices, they may finally have to stand up to the drug company lobbyists and write the missing software. For more, see here.


Last week I gave a keynote talk at CCS about DigiTally, a project we’ve been working on to extend mobile payments to areas where the network is intermittent, congested or non-existent.

The Bill and Melinda Gates Foundation called for ways to increase the use of mobile payments, which have been transformative in many less developed countries. We did some research and found that network availability and cost were the two main problems. So how could we do phone payments where there’s no network, with a marginal cost of zero? If people had smartphones you could use some combination of NFC, bluetooth and local wifi, but most of the rural poor in Africa and Asia use simple phones without any extra communications modalities, other than those which the users themselves can provide. So how could you enable people to do phone payments by simple user actions? We were inspired by the prepayment electricity meters I helped develop some twenty years ago; meters conforming to this spec are now used in over 100 countries.

We got a small grant from the Gates Foundation to do a prototype and field trial. We designed a system, Digitally, where Alice can pay Bob by exchanging eight-digit MACs that are generated, and verified, by the SIM cards in their phones. For rapid prototyping we used overlay SIMs (which are already being used in a different phone payment system in Africa). The cryptography is described in a paper we gave at the Security Protocols Workshop this spring.

Last month we took the prototype to Strathmore University in Nairobi to do a field trial involving usability studies in their bookshop, coffee shop and cafeteria. The results were very encouraging and I described them in my talk at CCS (slides). There will be a paper on this study in due course. We’re now looking for partners to do deployment at scale, whether in phone payments or in other apps that need to support value transfer in delay-tolerant networks.

There has been press coverage in the New Scientist, Engadget and Impress (original Japanese version).

Hacking the iPhone PIN retry counter

At our security group meeting on the 19th August, Sergei Skorobogatov demonstrated a NAND backup attack on an iPhone 5c. I typed in six wrong PINs and it locked; he removed the flash chip (which he’d desoldered and led out to a socket); he erased and restored the changed pages; he put it back in the phone; and I was able to enter a further six wrong PINs.

Sergei has today released a paper describing the attack.

During the recent fight between the FBI and Apple, FBI Director Jim Comey said this kind of attack wouldn’t work.

Might Brexit make us more dishonest?

When Lying Feels the Right Thing to Do reports three studies we did on what made people less or more likely to submit fraudulent insurance claims. Our first study found that people were more likely to cheat when rejected; the other two showed that rejected claimants were just as likely to cheat when this didn’t lead to financial gain, but that they felt more strongly when there was no money involved.

Our research was conducted as part of a broader research programme to investigate the deterrence of deception; our goal was to understand how to design better websites. However we can’t help wondering whether it might shine some light on the UK’s recent political turmoil. The Brexit campaigners were minorities of both main political parties and their anti-EU rhetoric had been rejected by the political mainstream for years; they had ideological rather than selfish motives. They ran a blatantly deceptive campaign, persisting in obvious untruths but abandoning them promptly after winning the vote. Rejection is not the only known factor in situational deception; it’s known, for example, that people with unmet goals are more likely to cheat than people who are simply doing their best, and that one bad apple can have a cascading effect. But it still makes you think.

The outcome and aftermath of the referendum have left many people feeling rejected, from remain voters through people who will lose financially to foreign residents of the UK. Our research shows that feelings of rejection can increase cheating by 15-30%; perhaps this might have measurable effects in some sectors. How one might disentangle this from the broader effects of diminished social solidarity, and from politicians simply setting a bad example, could be an interesting problems for social scientists.

Royal Society report on cybersecurity research

The Royal Society has just published a report on cybersecurity research. I was a member of the steering group that tried to keep the policy team headed in the right direction. Its recommendation that governments preserve the robustness of encryption is welcome enough, given the new Russian law on access to crypto keys; it was nice to get, given the conservative nature of the Society. But I’m afraid the glass is only half full.

I was disappointed that the final report went along with the GCHQ line that security breaches should not be reported to affected data subjects, as in the USA, but to the agencies, as mandated in the EU’s NIS directive. Its call for an independent review of the UK’s cybersecurity needs may also achieve little. I was on John Beddington’s Blackett Review five years ago, and the outcome wasn’t published; it was mostly used to justify a budget increase for GCHQ. Its call for UK government work on standards is irrelevant post-Brexit; indeed standards made in Europe will probably be better without UK interference. Most of all, I cannot accept the report’s line that the government should help direct cybersecurity research. Most scientists agree that too much money already goes into directed programmes and not enough into responsive-mode and curiosity-driven research. In the case of security research there is a further factor: the stark conflict of interest between bona fide researchers, whose aim is that some of the people should enjoy some security and privacy some of the time, and agencies engaged in programmes such as Operation Bullrun whose goal is that this should not happen. GCHQ may want a “more responsive cybersecurity agenda”; but that’s the last thing people like me want them to have.

The report has in any case been overtaken by events. First, Brexit is already doing serious harm to research funding. Second, Brexit is also doing serious harm to the IT industry; we hear daily of listings posptoned, investments reconsidered and firms planning to move development teams and data overseas. Third, the Investigatory Powers bill currently before the House of Lords highlights the fact that surveillance debate in the West these days is more about access to data at rest and about whether the government can order firms to hack their customers.

While all three arms of the US government have drawn back on surveillance powers following the Snowden revelations, Theresa May has taken the hardest possible line. Her Investigatory Powers Bill will give her successors as Home Secretary sweeping powers to order firms in the UK to hand over data and help GCHQ hack their customers. Brexit will shield these powers from challenge in the European Court of Justice, making it much harder for a UK company to claim “adequacy” for its data protection arrangements in respect of EU data subjects. This will make it still less attractive for an IT company to keep in the UK either data that could be seized or engineering staff who could be coerced. I am seriously concerned that, together with Brexit, this will be the double whammy that persuades overseas firms not to invest in the UK, and that even causes some UK firms to leave. In the face of this massive self-harm, the measures suggested by the report are unlikely to help much.

GCHQ helps banks dump fraud losses on customers

We recently reported that the Commissioner of the Met, Sir Bernard Hogan-Howe, said that banks should not refund fraud victims as this would just make people careless with their passwords and antivirus. The banks’ desire to blame fraud victims if they can, to avoid refunding them, is rational enough, but for a police chief to support them was disgraceful. Thirty years ago, a chief constable might have said that rape victims had themselves to blame for wearing nice clothes; if he were to say that nowadays, he’d be sacked. Hogan-Howe’s view of bank fraud is just as uninformed, and just as offensive to victims.

Our spooky friends at Cheltenham have joined the party. The Register reports a story in the Financial Times (behind a paywall) which says GCHQ believes that “companies must do more to try and encourage their customers to improve their cyber security standards. Customers using outdated software – sometimes riddled with vulnerabilities that hackers can exploit – are a weak link in the UK’s cyber defences.” There is no mention of the banks’ own outdated technology, or of GCHQ’s role in keeping consumer software vulnerable.

The elegant scribblers at the Financial Times are under the impression that “At present, banks routinely cover the cost of fraud, regardless of blame.” So they clearly are not regular readers of Light Blue Touchpaper.

The spooks are slightly more cautious; according to the FT, GCHQ “has told the private sector it will not take responsibility for regulatory failings”. I’m sure the banks will heave a big sigh of relief that their cosy relationship with the police, the ombudsman and the FCA will not be disturbed.

We will have to change our security-economics teaching material so we don’t just talk about the case where “Alice guards a system and Bob pays the costs of failure”, but also this new case where “Alice guards a system, and bribes the government to compel Bob to pay the costs of failure.” Now we know how Hogan-Howe is paid off; the banks pay for his Dedicated Card and Payment Crime Unit. But how are they paying off GCHQ, and what else are they getting as part of the deal?

Met police chief blaming the victims

Commissioner Hogan-Howe of the Met said on Thursday that the banks should not refund fraud victims because it “rewards” them for being lax about internet security. This was too much to pass up, so I wrote a letter to the editor of the Times, which has just been published. As the Times is behind a paywall, here is the text.

Sir, Sir Bernard Hogan-Howe argues that banks should not refund online fraud victims as this would make people careless with their passwords and anti-virus software (p1, March 24, and letters Mar 25 & 26). This is called secondary victimisation. Thirty years ago, a chief constable might have said that rape victims had themselves to blame for wearing nice clothes; if he were to say that nowadays, he’d be sacked. Hogan-Howe’s view of bank fraud is just as uninformed, and just as offensive to victims.

About 5 percent of computers running Windows are infected with malware, and common bank fraud malware such as Zeus lets the fraudster redirect transactions. You think you’re paying £150 to your electricity bill, while the malware is actually sending £9000 to Russia. The average person is helpless against this; everything seems normal, and antivirus products usually only detect it afterwards.

Much of the blame lies with the banks, who let the users of potentially infected computers make large payments instantly, rather than after a day or two, as used to be the case. They take this risk because regulators let them dump much of the cost of the resulting fraud on customers.

The elephant in the room is that the Met has been claiming for years that property crime is falling, when in fact it’s just going online like everything else. We’re now starting to get better crime figures; it’s time we got better policing, and better bank regulation too.

Ross Anderson FRS FREng
Professor of Security Engineering
University of Cambridge