Apple to Add Security Alerts for iCloud Users, CEO Says

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Apple's Plan To Improve Security After Celeb Nude Photo Leak

By Arnab Sen and Edwin Chan

Apple (AAPL) is planning additional steps to keep hackers out of user accounts in the face of the recent celebrity photo scandal and will aggressively encourage users to take stricter security measures, CEO Tim cook told The Wall Street Journal in an interview.

Apple will alert users through email and push notifications when someone tries to change an account password, restore iCloud data to a new device, or when a device logs into an account for the first time, the report said.

Apple is moving quickly to restore confidence in its systems' security ahead of the crucial launch of its new iPhone next week.

Cook said Apple will broaden its use of the two-factor authentication security system to avoid future intrusions, the Journal reported.

The two-factor authentication requires a user to have two of three things to access an account, which may include a password, a separate four-digit one-time code, or a long access key given to the user when they signed up for the service.

The iPhone maker said it plans to more aggressively encourage people to turn on the two-factor authentication in the new version of iOS, the daily reported.

"The usability battle will always be there but could you ever imagine using your debit card at an ATM and not entering a pin? That's two factor, something you have [a card] & something you know [a pin], and we all get along just fine," WhiteHat Security's Matt Johansen told Reuters.

Apple said Tuesday the attacks that emerged over the Labor Day weekend on celebrities' iCloud accounts were individually targeted, and that none of the cases it investigated had resulted from a breach of its systems.

Some security experts have faulted Apple for failing to make its devices and software easier to secure through two-factor authentication, which requires a separate verification code after users log in initially.

Apple could also do more to advertise that option, they said. Most people don't bother with security measures because of the extra hassle, experts say, and the leading phone makers are partly to blame.

The iCloud service allows users to store photos and other content and access it from any Apple device. Security in the cloud has been a paramount concern in past years, but that hasn't stopped the rapid adoption of services that offer reams of storage and management of data and content off smartphones and computers.

Apple wasn't immediately available for comment.

Why Your Bank Thinks Someone Stole Your Credit Card
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Apple to Add Security Alerts for iCloud Users, CEO Says

One reason why Marquis' gas purchases might have triggered a fraud lockdown? Filling their tank is a common first move for credit card thieves.

"Some of the things they look at are small-dollar transactions at gas stations, followed by an attempt to make a larger purchase," explains Adam Levin of Identity Theft 911.

The idea is that thieves want to confirm that the card actually works before going on a buying spree, so they'll make a small purchase that wouldn't catch the attention of the cardholder. Popular methods include buying gas or making a small donation to charity, so banks have started scrutinizing those transactions.

Of course, it's not a simple matter of buying gas or giving to charity -- if those tasks triggered alerts constantly, no one would do either with a credit card. But Levin points to another possible explanation: Purchases made in a high-crime area are going to be held to a higher standard by the bank.

"It's almost a form of redlining," he says. "If there are certain [neighborhoods] where they've experienced an enormous amount of fraud, then anytime they see a transaction in the neighborhood, it sends an alert."

(Indeed, Erin tells me that one of the gas purchases that triggered an alert took place in a rough part of Detroit, which she visited specifically for the cheap gas.)

People who steal credit cards and credit card numbers usually aren't doing it so they can outfit their home with electronics and appliances. They don't want the actual products they're fraudulently buying; they're just in it to make money. So banks are always on the lookout for purchases of items that can easily be re-sold.

"Anytime a product can be turned around quickly for cash value, those are going to be the items that you would probably assume that, if you were a thief, you would want to get to first," says Karisse Hendrick of the Merchant Risk Council, which helps online merchants cut down on fraud. Levin says electronics are common choices for fraudsters, as are precious metals and jewelry.

Many thieves don't want to go through the rigmarole of buying laptops and jewelry, then selling them online or at pawnshops. They'd much prefer to just turn your stolen card directly into cold, hard cash.

There are a few ways that they can do that, and all of them will raise red flags at your bank or credit union. Using a credit card to buy a pricey gift card or load a bunch of money on a prepaid debit card is a fast way to attract the suspicions of your credit card issuer. Levin adds that some identity thieves also use stolen or cloned credit cards to buy chips at a casino, which they can then cash out (or, if they're feeling lucky, gamble away).

When assessing whether a purchase might be fraudulent, banks aren't just looking at what you bought and where you bought it. They're also asking if it's something you usually buy.

"The issuers know the buying patterns of a cardholder," says Hendrick. "They know the typical dollar amount of transaction and the type of purchase they put on a credit card."

Your bank sees a fairly high percentage of your purchases, so it knows if one is out of character for you. A thrifty individual who suddenly drops $500 on designer clothes should expect to get a call -- or have to make one when the bank flags the transaction. If you rarely travel and your card is suddenly used to purchase a flight to Europe, that's going to raise some red flags.

Speaking of Europe, the other big factor in banks' risk equations is whether you're making a purchase in a new area. I bought a computer just days after moving from Boston to New York, and had to confirm to the bank that I was indeed trying to make the purchase. Levin likewise says that making purchases in two different cities over a short period of time raises suspicions.

"I go from New York to California a lot, and invariably someone will call me [from the bank], " he says. Since one person can't go shopping in New York and California at the same time, any time a bank sees multiple purchases in multiple locations in a short period, it's going to be suspicious.

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