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TECH SPACE
Smartphones under growing threat from hackers
by Staff Writers
Barcelona, Spain (AFP) Feb 17, 2010


Group claims responsibility for giant Latvian tax hack
Riga (AFP) Feb 17, 2010 - An unknown group of hackers said Wednesday they had illegally downloaded millions of Latvian tax documents to show that Riga's attempts to fight the economic crisis were not working. "The purpose of the group is to unmask those who gutted the country," an alleged hacker using the alias "Neo," told producers of the Latvian current affairs talk show Kas Notiek Latvija in an interview on the show's website. The hacker alleged that over a period of three months, his group used a security loophole to download over 7.5 million documents from the State Revenue Service's (SRS) web site. He said the documents, including VAT receipts and income tax declarations, showed that reforms launched to deal with Latvia's severe economic crisis have not been working. "We could show figures that structural reforms have been a bluff," Neo said in the interview. "Neo" said he represents the unknown Fourth Awakening People's Army.

The government of Latvian Prime Minister Valdis Dombrovskis was forced to slash public sector salaries and raise taxes as a requirement for a massive EU-led bailout which saved Riga from the brink of bankruptcy in late 2008. "The SRS confirms ...(a) security incident resulting in access of third persons to taxpayer data stored in the Electronic Declaration System (EDS) of the SRS," a statement said. It could not confirm whether the incident was caused by a "deliberate mistake, negligence or other reasons." "This is a very serious situation," Prime Minister Dombrovskis told Latvian Public Radio. "That's why I think we will have to assess cyber security as a whole in Latvia," he said. The finance ministry and the revenue service have launched separate internal probes to be concluded next week, Dombrovskis said. The police have also started a criminal investigation. The massive breach raised internet security concerns in the Baltic nation of 2.2 million people. The alleged hackers were reported to be based outside Latvia, presumably in Britain, where many Latvians moved in search of jobs and better opportunities after Latvia joined the European Union in 2004. Latvia is currently suffering its most severe economic crisis since it broke free from the Soviet Union in 1991 as output is estimated to have shrank 18.4 percent in 2009.

Smartphones are under a growing menace from cyber-criminals seeking to hack into web-connected handsets, but the mobile industry has contained the threat so far, security experts said.

Software security firms warned at the Mobile World Congress in Barcelona, Spain, that the increasingly popular smartphones could face an explosion of virus attacks in the coming years.

"Tomorrow we could see a worm on phones which would go around the world in five minutes," said Mikko Hyppoenen, chief research officer at F-Secure, which makes anti-virus software for mobile phones.

"It could have happened already. It hasn't, but it could happen. And I do think that sooner or later it will happen, but when? Well that I cannot tell you," he told AFP.

But security companies, mobile operators and makers of operating systems have found solutions to limit the attacks so far and delay an onslaught of spam and viruses, he said.

"It won't work forever, eventually we will see the first global outbreak. But we have been able to delay it by more than five years, at least," he said.

The first mobile virus appeared six years ago, and so far F-Secure has detected only 430 mobile worms. This compares to millions of computer viruses.

Much like the first computer hackers of two decades ago, the people attacking mobile phones have been doing it as a hobby, Hyppoenen said.

"It seems that on any new platform, the first years, the first viruses are done by hobbyists just to show off and then later more professional money-making criminals move in," he said.

One of the first viruses was called Skulls. Spreading through wireless bluetooth systems, a skull would appear on a phone's screen and delete all its data, Hyppoenen said.

The few money-making "trojan" viruses that have been seen infiltrate a person's phone and send text messages to premium numbers controlled by the hacker, he said.

Security companies have developped anti-spam and anti-virus software for mobile phones as well as anti-theft features that allow a phone's owner to remotely block the device and even map its location.

But smartphones, with their email and Internet capabilities, will invite more break-ins, especially with the growth of mobile banking -- financial transactions that can be done through applications, experts said.

"It is all about money," said Eugene Kaspersky, founder and chief executive of software protection firm Kaspersky Lab.

"Malware is developed to make more money. It doesn't matter if it's computers or smartphones," he said.

His company has detected an average of 30 mobile viruses per month over the past year, and believes that a wave of financial assaults are just around the corner.

It took more than 20 years for computer viruses to become a money-making industry, Kaspersky said.

"We expect that in mobiles it will take much less time," he said. "This year and next year we expect to see the industrialisation of smartphone malware."

Adam Leach, a mobile device expert at Ovum research firm, played down the threat, saying that the industry is staying on top of the problem.

"The threat hasn't been as high as expected," he said, adding that companies have learned from past experiences and have found ways to "minimise the threat."

But he warned that the mobile industry should not let its guard down.

"I think it is something companies need to take seriously," Leach said. "If it is not taken seriously, it has the potential to have a big impact on (mobile phone) users."

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