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January 14, 2019


Hiding in Plain Sight

Over the holidays when our family is all together, we always try to watch A Christmas Story. There are so many memorable moments in the movie, from the triple-dog-dare-you, tongue-frozen-to-the-flagpole scene to the leg lamp breakage. When the story revolves around Ralphie and the Little Orphan Annie secret decoder ring, it triggers my childhood memories of having a similar decoder ring that came with a pair of P.F. Flyers sneakers (think pre-Nike and Adidas). This year, our movie-watching led to a storytelling session of techniques worthy of any spy movie for passing secret notes. Many of the examples were like the decoder ring—they used some sort of secret alphanumeric table as a key to solve the cryptic message. In other words, we were talking about a rudimentary form of encryption, which, in today's technology, renders data useless to those without a key, whether they're bad guys or good guys.

But our conversation didn't stop there. I told a childhood story of dipping a toothpick in lemon juice and writing a message on paper. After the juice dried, the message became invisible, and I would then write an innocuous—and visible—message on the paper with pen or pencil. The recipient would carefully hold the paper over a flame to slowly reveal the hidden message. (Kids, try this only under adult supervision!) Little did I know I was using a technique called steganography—hiding a message within another message—that people also use today to protect information online.

Various forms of the technique date back to Greek civilization when untrusted messengers had to convey sensitive or classified information, or a message was at risk of being intercepted. (There is an entertaining and educational video on steganography by Richard Buckland, a professor at the University of New South Wales in Australia.) Today, technology has created a new technique in the form of digital steganography, which is the practice of hiding an image, audio, or data file within another image, audio, or data file.

A recent article in infoRisk Today highlighted the darker side of steganography, with its use by the criminal element. That article prompted me to conduct more research on the technique as a payments risk. From a cybersecurity standpoint, the greatest risk to consumers appears to be when the criminal hides a malware file within an image, audio, or other data file that, when opened, will load malware onto the device for future eavesdropping or control. Such an event could lead to the compromise of PII (or personally identifiable information), online credentials, or other sensitive information on the device without the owner's knowledge. In an August 2017 release, Kaspersky Lab warned about the difficulty for existing data protection processes to detect embedded malicious code.

Account takeover fraud is a major criminal activity that generally begins with the compromise of an individual's legitimate banking log-in credentials. A criminal who obtains this information can execute payment transaction fraud and, ultimately, synthetic identity fraud (see last week's post). While there are valid uses for steganography as an alternative to encryption, the criminal element will continue to develop uses of digital steganography to further their criminal operations and, as the infoRisk article notes, this usage is becoming more sophisticated and harder to detect.

Photo of David Lott By David Lott, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed

January 14, 2019 in crime , cybercrime , cybersecurity , data security , malware | Permalink

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