BLACK HAT - Hit spyware by punishing purveyors

With spyware a continuing plague for many computer users, some experts and IT workers are calling for stiffer penalties -- including jail time -- for convicted spyware purveyors.

At a panel discussion Wednesday during the Black Hat security conference in Las Vegas, speakers said that antispyware vendors are losing the fight against spyware creators, making more drastic measures necessary.

"It's not technically feasible to stop spyware," said Dan Kaminsky, an independent security consultant. "Think of the millions of PCs that have either been put away for good, sent away for service or replaced because of spyware infections. That is probably hundreds of millions or billions of dollars worth of damage. Yet no one has gone to jail; no one has been sued."

Recent statistics gathered by antispyware vendor Webroot Software Inc. point to spyware's continued growth. Between March and June, more than 100,000 new Web sites hosting spyware were discovered by Webroot. That's in addition to the 427,000 such sites discovered by Webroot since it began searching for them in January 2004 using a specially tuned search engine that Gerhard Eschelbeck, chief technology officer of Webroot, calls a "Google for spyware."

"Viruses are pretty easy to track -- you just stick out the sensor," Eschelbeck said. "Spyware is pretty hard to track down. You've got to actively hunt it down because it changes every day, every hour."

According to Webroot, 31 percent of all PCs -- including those that are business-owned -- have been infected with Trojan horses, which typically arrive disguised as something innocuous, such as a picture or document. An infected PC at an enterprise is host to an average of 1.3 Trojans, which Webroot considers the worst form of spyware -- although they can be more malicious than that.

Pamela Fusco, an information security manager at an East Coast financial services company, said her team deals with spyware infections every day. The worst incident was spyware that began replicating so quickly that "in 20 seconds it nearly took down our Microsoft Exchange system," she said.

That is despite a comprehensive program Fusco set up for dealing with spyware, including antispyware technology from McAfee Inc. and SPI Dynamics Inc., constant PC audits, a global alert system, restrictions on the use of PCs for employees who don't need full access, and education programs involving live demonstrations or Web video. Another tactic enterprises should adopt includes closely monitoring their Domain Name System logs, said Kaminsky.

And Drew Maness, senior security strategist at The Walt Disney Co., suggested that IT help desk workers be trained to diagnose PCs that are running abnormally slow as possible hosts for spyware.

At US-based Continental Airlines, spyware makes up 80 percent of the malware afflicting the airline's computers, according to Andre Gold, the company's chief information security officer. His team routinely deals with PCs that have been crippled by spyware by wiping the hard drive and reinstalling the complete operating system and software.

Asked how often his security team runs into particularly nasty spyware such as keyloggers that capture users' keystrokes -- including passwords and usernames -- Gold said, "I can't imagine a company that doesn't see it."

While spyware blooms, adware appears to be wilting. The average infected enterprise PC today is host to 2.8 instances of adware, down from 3.9 in the fall of 2005.

Not everyone agrees on the difference between relatively benign adware and more malignant spyware, which Kaminsky said is one reason it's been so difficult to fight the latter.

He said laws must be put in place that clearly set out guidelines for would-be adware distributors. For instance, laws could spell out that ads need to removable by users within 10 seconds with a simple right-click of the mouse lest they be deemed spyware. "As long as everything is gray, no one goes to jail," he said.

Fusco agreed that laws today are inadequate for stopping spyware at its sources. But Gold said another problem is the reluctance by companies infected by spyware to come forward and share information with government agencies.

"If I give you data, you could help me -- or you could prosecute me" for lack of due diligence, Gold said. "It's an absolute Catch-22."