[ISN] Under Phishing Attack, British Bank Shuts Down Some Services

[InfoSec News]

http://www.informationweek.com/story/showArticle.jhtml;jsessionid=CIGVP13WT43RMQSNDBGCKHSCJUMEKJVN?articleID=53700579

By Gregg Keizer
TechWeb News 
Nov. 18, 2004 

One of the four biggest banks in the United Kingdom has taken the
unusual step of suspending some features of its online service
following a phishing attack.

On Wednesday, NatWest, which is part of the Royal Bank of Scotland
Group and one of Britain's big four banks, shut off features to its
million-plus online customers. When users logged on to the NatWest
site, they saw a message that read, "We have temporarily suspended the
ability to create or amend Third Party Payment mandates and create
Standing Order mandates."

Third-party-payment mandates, said Caroline Harris, a NatWest
spokesperson, are ad-hoc electronic-payment requests outside the
normal bill payments already established. They're typically used to
pay individuals electronically. Standing-order mandates are the U.K.  
equivalent of a scheduled bill payment.

"We've not shut down the entire site, as some press reports would have
you believe," said Harris, "but we've only restricted one small part."

The phishing e-mail received by NatWest customers claimed to be part
of a software update to the online banking service.

"This is only temporary," said Harris, "and is a preventative measure
to protect our customers. Because we've [blocked third-party-payment
and standing orders] the phishers haven't been able to take money out
of customer accounts."

She reiterated that no NatWest customer had lost money to the scam.

NatWest urged customers who may have given up personal information to
contact the bank, and said that alternate ways to make payments, such
as by telephone, remained an option.

Although Harris said such action was "nothing new" and that the bank
had done similar things before when faced with determined phishers, a
U.S.-based banking analyst said it was news to her.

"I've never heard of that tactic before," said Avivah Litan, a
research director and vice president with Gartner who specializes in
bank fraud and phishing issues. "Not that it's a bad action, but it
sounds to me that NatWest didn't have a way to contain the damage.

"It's an extreme measure. It probably means that they don't have other
risk-control mechanisms in place, or the attack was getting out of
hand," she added.

And while NatWest reacted quickly, there's a real chance a temporary
measure like this won't stop phishers from exploiting stolen
information. Increasingly, she said, it seems phishers are a lot more
patient than anyone thought.

"When you look at the big picture, there's more and more evidence that
phishers are sitting on the information [they steal], and that the
real damage may not show up for a year or two."

Phishers, Litan went on, "are very clever, and have a lot of time and
patience." Rather than use their ill-gotten information immediately --
which is what NatWest assumes by temporarily limiting on-the-fly
payments -- there's growing concern that cyber-criminals wait a long
time before pouncing.

One tactic phishers are using, said Litan, is to apply for new credit
cards using stolen identity information, use and pay those cards, and
over a period of months, even as long as two years, build up the
cards' credit limits.

"Then they'll do 'bust-outs,'" said Litan. "That's when they run
through the credit limit, say $50,000, before the first bill comes
due, with no intention of paying."

The worst news, about NatWest's move, concluded Litan, is that it may
only be the beginning of a new wave of banking business disruptions.

"Once I thought that maybe phishing was a fad, and after a while it
would be replaced by some other scam, like keyloggers. But it's not a
fad. It's going to get worse, and it's not going to slow down."