Category Archives: Politics

EMV: Why Payment Systems Fail

Academic papers, Banking security, Legal issues, Politics, Protocols, Security economics, Security engineering

In the latest edition of Communications of the ACM, Ross Anderson and I have an article in the Inside Risks column: “EMV: Why Payment Systems Fail” (DOI 10.1145/2602321).

Now that US banks are deploying credit and debit cards with chips supporting the EMV protocol, our article explores what lessons the US should learn from the UK experience of having chip cards since 2006. We address questions like whether EMV would have prevented the Target data breach (it wouldn’t have), whether Chip and PIN is safer for customers than Chip and Signature (it isn’t), whether EMV cards can be cloned (in some cases, they can) and whether EMV will protect against online fraud (it won’t).

While the EMV specification is the same across the world, they way each country uses it varies substantially. Even individual banks within a country may make different implementation choices which have an impact on security. The US will prove to be an especially interesting case study because some banks will be choosing Chip and PIN (as the UK has done) while others will choose Chip and Signature (as Singapore did). The US will act as a natural experiment addressing the question of whether Chip and PIN or Chip and Signature is better, and from whose perspective?

The US is also distinctive in that the major tussle over payment card security is over the “interchange” fees paid by merchants to the banks which issue the cards used. Interchange fees are about an order of magnitude higher than losses due to fraud, so while security is one consideration in choosing different sets of EMV features, the question of who pays how much in fees is a more important factor (even if the decision is later claimed to be justified by security). We’re already seeing results of this fight in the courts and through legislation.

EMV is coming to the US, so it is important that banks, customers, merchants and regulators know the likely consequences and how to manage the risks, learning from the lessons of the UK and elsewhere. Discussion of these and further issues can be found in our article.

Don’t shoot the demonstrators

Academic papers, Legal issues, Politics, Security economics, Security psychology

Jim Graves, Alessandro Acquisti and I are giving a paper today at WEIS on Experimental Measurement of Attitudes Regarding Cybercrime, which we hope might nudge courts towards more rational sentencing for cybercrime.

At present, sentencing can seem somewhere between random and vindictive. People who commit a fraud online can get off with a tenth of what they’d get if they’d swindled the same amount of money face-to-face; yet people who indulge in political activism – as the Anonymous crowd did – can get hammered with much harsher sentences than they’d get for a comparable protest on the street.

Is this just the behaviour of courts and prosecutors, or does it reflect public attitudes?

We did a number of surveys of US residents and found convincing evidence that it’s the former. Americans want fraudsters to be punished on two criteria: for the value of the damage they do, with steadily tougher punishments for more damage, and for their motivation, where they want people who hack for profit to be punished more harshly than people who hack for political protest.

So Americans, thankfully, are rational. Let’s hope that legislators and prosecutors start listening to their voters.

Security and Human Behaviour 2014

Academic papers, Politics, Security economics, Security psychology, Social networks

I’m liveblogging the Workshop on Security and Human Behaviour which is being held here in Cambridge. The participants’ papers are here and the programme is here. For background, see the liveblogs for SHB 2008-13 which are linked here and here. Blog posts summarising the talks at the workshop sessions will appear as followups below, and audio files will be here.

Post-Snowden: the economics of surveillance

Academic papers, News coverage, Politics, Privacy technology, Security economics

After 9/11, we worked on the economics of security, in an attempt to bring back some rationality. Next followed the economics of privacy, which Alessandro Acquisti and others developed to explain why people interact with social media the way they do. A year after the Snowden revelations, it’s time to talk about the economics of surveillance.

In a new paper I discuss how information economics applies to the NSA and its allies, just as it applies to Google and Microsoft. The Snowden papers reveal that the modern world of signals intelligence exhibits strong network effects which cause surveillance platforms to behave much like operating systems or social networks. So while India used to be happy to buy warplanes from Russia (and they still do), they now share intelligence with the NSA as it has the bigger network. Networks also tend to merge, so we see the convergence of intelligence with law enforcement everywhere, from PRISM to the UK Communications Data Bill.

There is an interesting cultural split in that while the IT industry understands network effects extremely well, the international relations community pays almost no attention to it. So it’s not just a matter of the left coast thinking Snowden a whistleblower and the right coast thinking him a traitor; there is a real gap in the underlying conceptual analysis.

That is a shame. The global surveillance network that’s currently being built by the NSA, GCHQ and its collaborator agencies in dozens of countries may become a new international institution, like the World Bank or the United Nations, but more influential and rather harder to govern. And just as Britain’s imperial network of telegraph and telephone cables survived the demise of empire, so the global surveillance network may survive America’s pre-eminence. Mr Obama might care to stop and wonder whether the amount of privacy he extends to a farmer in the Punjab today might be correlated with with amount of privacy the ruler of China will extend to his grandchildren in fifty years’ time. What goes around, comes around.

Small earthquake, not many dead (yet)

Banking security, Internet censorship, Legal issues, News coverage, Politics, Privacy technology, Security economics, Social networks

The European Court of Justice decision in the Google case will have implications way beyond search engines. Regular readers of this blog will recall stories of banks hounding innocent people for money following payment disputes, and a favourite trick is to blacklist people with credit reference agencies, even while disputes are still in progress (or even after the bank has actually lost a court case). In the past, the Information Commissioner refused to do anything about this abuse, claiming that it’s the bank which is the data controller, not the credit agency. The court now confirms that this view was quite wrong. I have therefore written to the Information Commissioner inviting him to acknowledge this and to withdraw the guidance issued to the credit reference agencies by his predecessor.

I wonder what other information intermediaries will now have to revise their business models?

Latest health privacy scandal

Legal issues, News coverage, Politics, Privacy technology, Security economics

Today I gave a talk at the Open Data Institute on a catastrophic failure of anonymity in medical research. Here’s the audio and video, and here are the slides.

Three weeks ago we made a formal complaint to the ICO about the Department of Health supplying a large amount of data to PA Consulting, who uploaded it to the Google cloud in defiance of NHS regulations on sending data abroad. This follows several other scandals over NHS chiefs claiming that hospital episode statistics data are anonymous and selling it to third parties, when it is nothing of the kind.

Yesterday the Department of Health disclosed its Register of Approved Data Releases which shows that many organisations in both the public and private sectors have been supplied with HES data over the past year. It’s amazing how many of them are marked “non sensitive”: even number 408, where Imperial College got data with the with HESID (which includes postcode or NHS number), date of birth, home address, and GP practice. How officials can maintain that such data does not identify individuals is beyond me.

Health privacy: complaint to ICO

Legal issues, News coverage, Politics, Privacy technology, Security economics, Security psychology

Three NGOs have lodged a formal complaint to the Information Commissioner about the fact that PA Consulting uploaded over a decade of UK hospital records to a US-based cloud service. This appears to have involved serious breaches of the UK Data Protection Act 1998 and of multiple NHS regulations about the security of personal health information. This already caused a row in Parliament and the Deparatment of Health seems to be trying to wriggle off the hook by pretending that the data were pseudonymised. Other EU countries have banned such uploads. Regular LBT readers will know that the Department of Health has got itself in a complete mess over medical record privacy.