World Is Facing A Wave Of Cyber Crime

The world is facing a wave of cyber crime thanks in large part to our newly-found addiction to the smartphone.

An estimated 480 million smartphones will be sold this year. They are indeed wonders of technology.

Henry Harrison, from UK cyber security experts Detica, said: "This is a fully fledged computer that's sitting in your pocket."

It can, and probably will, betray you as a result.

The flaw in the smartphone is that it is too useful and too user friendly - for users who trade convenience for security.

They collect our emails, store our bank details, we tweet and use Facebook on them. They are our bank vault, our confidante, our guide.

But as Cryptocard's Jason Hart demonstrated - they are our new Achilles heel.

Mr Hart purchased a cheap item of equipment from a high street electrical store and downloaded free software from the internet - all he needed to set up an "evil twin" Wi-Fi connection.

Criminals use these to harvest passwords and other sensitive data from smartphones or computers - often giving their Wi-Fi hotspots fake names familiar to punters at cafes and in airports.

Many smartphones are set up to automatically leap on to available Wi-Fi hotspots and start downloading emails.

Others will ask first. But who would turn down "free Wi-Fi"?

Mr Hart has set up his fake Wi-Fi hotspot in a car outside a cafe.

My phone picked it up and I chose to jump on his Wi-Fi link. In seconds, he was able to read my email passwords and decrypt my "secure" login details for Twitter.

He already knew my IP address, the unique address for my iPhone. So he was "spear phishing" me, aiming only to harvest my data.

Crooks would more likely just "phish" - hoover up as many passwords and user IDs as they can.

Mr Hart could have pinched large numbers of passwords and user IDs in a radius of 100 metres. With a bigger antenna, he could operate from much further away.

"With the right equipment I could do this in a two or three mile radius... I conducted an attack against you and pretty much everything you were doing on your smart phone, I was able to essentially compromise all your passwords," Mr Hart explained.

Forty per cent of mobiles sold this year have been smartphones - and this has been a bumper year for malware developers who have focussed their attention on smartphones.

Those running Google's Android system have been especially targeted.

Bitdefender's Catalin Cosoi said: "We have investigated applications for Android devices and basically, based on our statistics, we've seen a 2,000% increase of malicious applications compared to the last year... Our prediction is that in the following six months, we will have a 6,000% increase in malicious applications."

That is geek speak for be afraid, very afraid.

According to the research group Gartner , 43.4% of all smartphone sales use the Android platform, 18.2% use the Apple software, 22.1% use Nokia's Symbian and Blackberry's RIM , 11.7%.

Smartphones are becoming the gateway for cyber criminals and cyber spies into sensitive personal data, industrial and state secrets.

"Once you have a smartphone, you probably can't go back to an older version of a phone now that you have access to a computer, social media, emails, pictures and so on. You sort of get addicted, so smartphones are becoming very important," Mr Cosoi added.

"On the other hand, it's very, very easy to create malware for smartphones.

"Sometimes you can take a malicious part from one application and insert it into another and start propagating an application on the web.

"So smartphones are increasing and also, it's very easy to create malicious applications for smartphones."

According to Detica and the Cabinet Office , Britain loses £27bn a year to cyber crime - that is four times the size of the drugs trade in the UK.

Government losses are estimated to be £2.2bn. Individual Britons lose £3.1bn a year.

Business losses are a staggering £21bn - £17bn of that is lost to the theft of intellectual property.

In short, cyber crime and espionage are a major strategic threat.

Given that cyber attacks are a daily occurrence both on a state and criminal level, many commentators would argue that we are already in a cyber war.