Phishers crack two-factor authentication

Security experts have detected a new type of phishing attack that could render two-factor authentication useless.

A dual factor security system typically uses a password and some kind of hardware security device such as a smartcard or a token that issues temporary passwords. Smartcards are commonly used within corporations while online transaction systems and banks opt for tokens.

The Security Fix blog reported that researchers with Secure Science Corporation spotted a phishing website targetting Citibank's Citybusiness service that attempted to steal both the user name and password as well as the temporary password issued by the security token.

The site furthermore acted as a "man-in-the middle" that relayed the information to the Citibank server for authentication. It prompted users if the information they entered was incorrect.

"Exactly the same kind of attacks can be used to target other types of two-factor authentication, including one-time password sheets," noted Mikko Hyppönen, chief research officer with F-Secure.

Two-factor authentication systems are considered to be safer than services that rely solely on a user name and password because the temporary passwords expire after a short time. Owners also notice when their tokens or key cards are lost.

Security researchers however for a long time have warned that attackers could still use the temporary passwords in a real time attack where they don't wait for the temporary password to expire.

"These days, typical attacks don’t engage in this level of sophistication. Usernames and passwords are still collected, but it is usually some time before they are used. Two-factor authentication tokens work well for these very simple-minded attacks," commented Zulfikar Ramzan, a senior principal researcher with Symantec.

"However, if an attack is more sophisticated and the phisher can use the credentials in real-time, we’re the ones out of luck."

"I believe that two-factor authentication security will be almost futile when we tackle the next generation of phishing attacks."

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