Protection racket

Reshef didn't have to hack around firewalls or break encryption. He accomplished his break-ins using only his Web browser, some know-how and maybe a little programming code. Reshef (and presumably hackers who use their abilities less benignly) hunts around Web pages for little programming mistakes. These subtle errors -- Reshef says most programmers make them from time to time -- offer knowledgeable snoops points of entry to a site's server. And once they have that access, they can cause all kinds of mayhem.

Not that Reshef would -- he's a nice guy. In fact, one analyst I spoke to described him as a Boy Scout. And the break-ins he performed were done only after obtaining the permission of the sites' proprietors.

Shortly after taking in Reshef's demonstration, I saw a report of a popular news site (which will also remain nameless) being taken down completely by an unknown hacker or hackers. I called the site manager to see whether the break-in involved the kind of hacking Reshef showed me. She said no. The site had simply had a problem with an FTP server, which was now fixed. Besides, she told me, the kind of thing I was describing to her was impossible. "Did you ever think maybe you were getting a snake-oil pitch?" she asked. "'Here's the disease, now here's the medicine you need to cure it?'" That's a reasonable question, I thought.

So, I did some checking.

"The problem that Perfecto is targeting is right on the money," counters Mike Zboray, vice-president and research director for the Gartner Group, an industry research firm. "Take a look at your typical Web server configured for use on the Net. The people who do that configuration are not terribly meticulous about the underlying code and they aren't meticulous about how they have safeguarded the content they have created. When it works, they put it up. Is that good enough for e-commerce? Probably not."

For quite a while, Zboray has been warning his clients to be diligent about protecting their Web sites from this kind of intrusion, either by plugging holes themselves or, more recently, by buying software. To make his point, he has sometimes been forced to perform a little hacking of his own. "I'm not nearly as good at this as Reshef is, but I have been able to get complete access to servers. I do it just to demonstrate how people are exposed."

A similar demonstration by Reshef persuaded Quote.com's Kaj Pedersen that his site needed protection. "The selling point for me was when Reshef changed my password and was able to get my access privileges to the site," explains Pedersen, vice-president of engineering at the financial market data site.

Okay, I'm scared. And naturally, my first concern is for my own wallet. I practically live on the Internet. Are my life and finances an open book for every intelligent reprobate who has a browser? That depends.

"If I were a vendor, I would be deathly afraid," says Zboray. "If I were a bank, I would be deathly afraid. And anyone who is doing a company extranet should definitely worry if they have sensitive company data out there."

On the other hand, Zboray believes, consumers shouldn't panic about the state of security on the Web. "I'm not afraid of using my credit card [at e-commerce sites] -- the credit card companies are shielding me from responsibility for any fraudulent charges of more than $50." Much the same is true at online banks: A bank's insurance shields your account from loss if your bank -- online or otherwise -- is robbed.

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