Hidden Dangers Lurking in E-Commerce- Reducing Fraud with the Right SSL Certificate

Hidden Dangers Lurking in E-Commerce- Reducing Fraud with the Right SSL Certificate

-Introduction ………………………………………………………………………………………………3
-What is a Digital Certificate and what is SSL? …………………………………….3
-SSL and Digital Certificates: Securing Transactional Website Data …4
-EV SSL Certificates…………………………………………………………………………………….6
-Why not DV certificates? What’s the problem with DV certificates? 8
-Consumer safety with OV and EV…………………………………………………………. 9
-Why risk of fraud with DV is higher ………………………………………………………9
-SSL Certificates at a glance…………………………………………………………………….11
-Summary …………………………………………………………………………………………………..12


”Domain Validated (DV)” SSL Certificates pose a direct threat to consumers on
the Internet. Cybercriminals frequently use DV SSL certificates to impersonate
real ecommerce websites for the purpose of defrauding consumers. This paper
will explain SSL, the different types of certificates, how cybercriminals use DV
certificates to steal personal and financial data, and what can be done to thwart
this tactic.

Shopping online has now become almost second nature to most of us, but where
did it all start, and what enabled it to grow to the levels that we see today?
it was back in 1994, with the first known web purchase being a
pepperoni pizza with mushrooms and extra cheese from Pizza Hut. When that
first pizza was ordered – and, a year later, when online retail giant Amazon
sold its first book (Douglas Hofstadter’s ‘Fluid Concepts & Creative Analogies:
Computer Models of the Fundamental Mechanisms of Thought’2
), it ushered in a
torrent of activity. Two decades later, global e-commerce sales for 2013 have been
calculated at upwards of $1.2 trillion3
. What facilitated this tectonic shift in our
shopping habits? Trust.
Trust in who we were shopping with, and trust that the purchase information
we provided would be secured. Because as ever, where there is money there will
always be criminals – eager to take advantage of the burgeoning opportunity.

But if trust is the grease that lubricated the online marketplace, what is the
technical basis for that trust? The answer is in part solved with Secure Sockets
Layer (SSL), and more specifically, digital certificates – a reliable technology which
has worked well for decades, and can continue to do so. But for this to happen, it
has to be deployed responsibly. Put simply, not all certificates are created equal –
and today, some ingenious criminals have found a way to corrupt the very system
that was designed to stop them. As a result we need to make sure that certificates
are matched to their uses and that when people send their personal and financial
information across the internet they can have confidence that the recipient is not
a criminal.

In fact, research from Norton estimates the global price tag of consumer
cybercrime now topping some US$113 billion annually4
which is enough to host
the 2012 London Olympics nearly 10 times over. The cost per cybercrime victim
has shot up to USD$298: a 50% increase over 2012. In terms of the number of
victims of such attacks, that’s 378 million per year – averaging 1 million plus per

What is a Digital Certificate and what is SSL?
In order to transact business online, consumers and businesses needed a way
of exchanging credit card numbers, passwords, and other personal information
securely. SSL is the technology that protects much of the Internet and in essence
it enables e-commerce. It “lights up” the padlock symbol in the browser to tell
the consumer they are safe to send their credit card information to a vendor in a                                                     manner which no one else but that recipient’s site can decipher. All data sent via
SSL is encrypted. Without SSL, you would be sending your credit card information
(or password, bank account, social security number, address etc.) across a very
public Internet in plain text. This is like sending bank details through the mail
on the back of a postcard – and it could risk having that information stolen. SSL
was invented by Netscape in the 1990s to provide encryption over the insecure

But there is a catch: encryption is only useful if you know who you are sending the
data to, and you are confident that it is the only party that can decrypt it. This is
where certificates come into play.

SSL and Digital Certificates: Securing Transactional Website Data
To enable encryption, websites use “digital certificates” which are issued by
organizations called “Certification Authorities (CA)”, the largest of which is
. A Certification Authority is a trusted third party
that verifies details about an applicant using a variety of databases, telephone
calls and other means. Note that a CA does NOT verify the trustworthiness of
a business; its role is to verify that the business exists and to issue credentials
(digital certificates).

Currently there are three types of SSL certificates sold by most major Certificate
Authorities – domain validated (DV), organizationally validated (OV) and extended
validation certificates (EV)

In the early days of the Internet, the only type of SSL certificate available was an
“Organizationally Validated (OV)” certificate. With this type of certificate, the CA
would validate certain business information along with the domain name to make
sure the applicant “is who they say they are”. For example, to purchase a website
certificate for www.amazon.com, Amazon would send the CA some information
from the webserver along with proof that this was a real company. In addition, the
person requesting the certificate was validated as an employee of the company.
The CA would validate this data (this could take 2-5 business days) and then issue
the certificate to the website. The website then used this certificate to enable
secure e-commerce using SSL.

This worked fine for many years but some organizations complained about the
time involved to verify business details. They wondered if someone could come
up with a quicker solution that still provided the necessary encryption. In the
early 2000’s, a new type of certificate appeared on the market called “Domain
Validated (DV)”. This certificate was issued very rapidly because it only required
the applicant to prove the right to use a domain name – there was no validation of
any other business information. For example, if someone purchased the domain
www.myfavoritestore.com, then they could obtain a DV SSL certificate for that
domain simply by applying to a Certificate Authority and responding to an email
sent by the CA. Once the CA receives the response, the certificate is immediately
issued. Then they could set up a website for MyFavoriteStore.com, and begin

accepting credit cards securely. Consumers would see the padlock in the browser,
indicating that all traffic is encrypted to the server.
Of course, the obvious problem here is that there is no validation done to
demonstrate that MyFavoriteStore.com is actually a legitimate business – and not
someone committing fraud.
The figures below compare a browser view (Internet Explorer) of a Domain
Validated certificate for the domain “carbon2cobalt.com” and an Organizationally
Validated certificate for amazon.com:                        

DV Certificate                                    OV Certificate
(Screen shot obtained from Internet Explorer by clicking on browser lock in address bar, View
certificates, Details tab and then Subject field)

As one can see, in the DV certificate, there is no information about the company
other than the domain name (carbon2cobalt.com). There is no way to tell where
this business is located or who owns it. The company name was never validated
and hence is not shown. Contrast this to the OV certificate for amazon.com which
shows the name of the company and its location. These items have been verified
by the CA and are included inside the certificate.

Browsers do not distinguish this DV certificate from the OV certificates that
undergo a more thorough vetting process (we’ll have more to say about that
later). Both types of certificates show a lock on the screen. The two screen shots
below depict two different websites. Both use SSL (as indicated by the lock) but
which one used DV and which uses OV? Put differently – which one has shown
only that it owns a domain name, and which has provided proof of its identity?
It’s impossible to tell without clicking on the lock for more details, something few                                         consumers ever do; most don’t realize the information is there, much less how to
make sense of it. It would be of immense value for the browsers to present that
information (DV vs OV, business legitimacy info) in a consumer-friendly way, or for
limitations to be developed for usage of DV certificates.

Thus, it is relatively easy for criminals to setup a fake website, obtain a DV
certificate, and use the lock to falsely portray that the site is legitimate. Lured into
a false sense of security, the criminals dupe consumers and steal their private data.
EV SSL Certificates
In response to complaints from various parties, as well as to strengthen
authentication processes and Internet security, certificate authorities and browsers
formed an industry association called the “CA/Browser Forum” in 2006 to address
matters such as this. Early participants of this forum included Microsoft, Symantec,
Comodo, Entrust and Mozilla. The first product of this group was specifications
for a new type of certificate called “Extended Validation (EV)”. In this case the CA
performs enhanced vetting of the applicant to increase the level of confidence
in the business. The browser display is enhanced and one can readily see the
difference. Below is an example of an EV certificate:

In this example, it is clear that this certificate (and website) belongs to Bank of
America in Chicago, IL. This information has been verified by the CA through a
vetting process which included examination of corporate documents, checking of
applicant individual identity and checking information with a third party database

In addition all browsers give visual indicators, usually a green lock or address bar,
to indicate that the website is using an EV certificate. This makes it much easier for
the consumer to know that the identity of the website has been thoroughly verified.
All browsers show the organization name to the left or right of the URL. The figure
below shows how EV certificates are indicated in popular browsers. Enhanced
vetting makes EV certificates much harder to obtain.

EV Certificates help establish the legitimacy of a business claiming to operate a
website, and to provide a vehicle that can be used to assist in addressing problems
related to phishing, malware, and other forms of online identity fraud. By providing
more reliable third-party verified identity and address information regarding the
business, EV Certificates may help to:

1. Make it more difficult to mount phishing and other online identity fraud attacks
using Certificates.
2. Assist companies that may be the target of phishing attacks or online identity
fraud by providing them with a tool to better identify themselves to users; and
3. Assist law enforcement organizations in their investigations of phishing
and other online identity fraud, including where appropriate, contacting,                                                         investigating, or taking legal action against the subject.
Because of the strict vetting procedures that a CA uses to check the information
about the applicant, the issuance of EV certificates usually takes longer than other
types of certificates.

Compared to the DV certificate, much more information is included, enough in
fact to determine who the company is that is seeking the certificate. All of this
information was verified by the Certificate Authority.

The CA/Browser Forum spent considerable time coming up with Baseline
Requirements which specifically define DV, OV and EV certificates. Prior to these
requirements, CAs would choose what vetting they would perform for each type                                                         of certificate, meaning that a purchaser could select their CA on the basis of the
rigorousness (or lack thereof) of the CA’s authentication process. Now, adherence
is required to these Baseline Requirements by all CAs, whether they are members
of the Forum or not. The Baseline Requirements were approved by all members of
the CA/Browser forum including Certificate Authorities and Browsers.

Why not DV certificates for ecommerce? What’s the problem with
DV certificates?
It’s quite simple: in the earlier example, MyFavoriteStore.com isn’t a real business.
It’s a fake website set up by a phisher. How is this possible? Let’s walk through the
1. The fraudster purchases the domain from a domain registrar using fake
information and a stolen credit card. The registrar issued the domain name
“myfavoritestore.com” to the fraudster.
2. Once he has the rights to the domain, the fraudster applies for a domain
validated certificate from a CA. The CA only checks to see if the applicant can
reply to an email to that domain. Once they reply, the CA issues the certificate.
3. The fraudster creates webpages that portend to sell popular items of general
interest as well as a shopping cart and credit card acceptance pages.
4. Consumers are drawn to this site via bogus email messages or false
5. Once on the site, the consumer sees the padlock and assumes the site is valid
so they enter their credit card information to make the purchase.
6. The fraudster steals the credit card data and the consumer receives no goods.
When they look at the SSL certificate to get more data on the website, they
find nothing but a domain name. There is no verified address or other business

Due to the lack of information in DV certificates as well as the ease in obtaining
them, they have been successfully used by fraudsters to lure consumers into
divulging private data such as account usernames/passwords and credit card
information. A recent Netcraft study showed that 78% of SSL certificates found
on servers hosting fraudulent websites were domain validated. While the majority
were not obtained exclusively for phishing, those with misleading domains were
subject only to domain validation6
. The most interesting “targets” for fraudsters
are popular sites where e-commerce is transacted such as Paypal, Apple, Visa,
MasterCard and various foreign banks. An Apple ID has recently become a “high
value” target. Fraudsters will setup a fake Apple website using a DV certificate to
lure users. With such a credential, a fraudster can lock or locate a phone, make
purchases on iTunes and gather information about the victim.

However, it’s not only large companies that are targets. Small and medium
sized businesses are also frequent targets because of their limited Information
Technology sophistication. User credentials gleaned from a “hacked” small
business could be used to impersonate a consumer at another website. This is
because user names, passwords, and other credential information are frequently
“re-used” by a consumer which makes it easy for hackers to try the same
passwords at different websites.

Recent research commissioned by Naijadomains showed that more than 1/3 of
e-commerce websites are using DV certificates7
. This is not a surprise, given the
relative ease, speed and low expense of obtaining such a certificate. While all CAs
must perform a basic “fraud check” on DV certificate applications, fraudsters
are adapting their methods to circumvent these checks. For example, the name
“Paypal” is a common fraud target and hence CAs will have automated checks to
look for similar names in applications such as “pay-pal”, “securepaypal”, “p@ypal”,
etc. But recently, a certificate was issued to paypol-france.com which was then used
to launch a phishing attack to steal user credentials. It’s not clear how many users
were fooled into divulging personal details. It would be much more difficult for a
fraudster to obtain an OV or EV certificate for such a name.

Consumer safety with OV and EV
Compare the two certificates below. On the left is a certificate for the website
“bookairfare.com” and on the right for “ebookers.com”. A consumer who searched
for cheap airfares via a search engine might be directed to these two websites
but how would they know which business has been verified? By examining the
certificate on the left, no business information is listed which means that it is a DV
certificate. Contrast that with the certificate on the right which contains extensive,
validated business data. While the business on the left is presumed authentic, no
data has been validated, meaning that it could also be a fraud site8

Why risk of fraud with DV is higher
Criminals will commonly create fraudulent websites for the purposes of ID theft and
account takeover. To add legitimacy to the website, they will add extensive graphics
to mimic the real website and obtain an SSL certificate, which gives the user a
visual indicator of security. As stated previously, a DV certificate is relatively easy
to obtain. Once the fraudster has purchased the rights to a domain, they can apply                                                   for a DV certificate and receive it within minutes. The website is then setup and the
fraudster will begin directing unsuspecting consumers to the site. Consumers will
see the padlock (which DV certificates enable) and proceed to enter private data
which can be distributed through the criminal network.
The figure below shows an example of a phishing email and the associated website
one is taken to after clicking on the embedded link9

The site has a convincing web page and shows the lock

:Examination of the SSL certificate reveals that it is a DV certificate:

That cybercriminals go to the trouble of obtaining SSL certificates demonstrates
that users have become conditioned to look for the padlock or “https” before
conducting a transaction. Many of these fraudulent sites are up for only days or
hours, which means that unlike legitimate business which only have to apply for
certs once every few years, the criminals are doing so constantly. They would not
expend the effort and resources if there was no value in doing so.

The website, SSL Blacklist (https://sslbl.abuse.ch/) provides a list of SSL sites that
are associated with malware or botnet activities. A review of their most recent 5
months of data indicates that all of the SSL certificates blacklisted are either DV
or self-signed (self-signed or untrusted certificates incur a browser warning, which
fraudsters would likely avoid). This further shows the ease of obtaining these DV
certificates is attractive to cybercriminals.

SSL Certificates at a glance                                                                                                                                            The figure below compares the 3 types of SSL certificates available in the market:

As stated earlier, DV certificates do not provide any information about the
business. Their use is limited to encryption ONLY. There are valid use cases for
DV certificates including non- ecommerce uses or sites that have a low
probability of a phishing attack (i.e. no financial gain by attacker).

Moving from a DV certificate to an OV or EV certificate does involve additional
expense to the website operator but the difference is surprisingly small. The chart
below compares the retail prices of DV, OV and EV certificates among the top
providers (as of August 2014):

Competitive retail prices for 1 year validity SSL certificates. Note that some providers add
other services to their prices for increased value.

For a relatively small amount of additional money (compared to a DV certificate), a
legitimate business conducting e-commerce could purchase an OV or EV certificate.
This would prove to the consumer that the business has been validated and provide
address and other contact information in the certificate which the consumer could
use in case of questions or problems.

In addition, EV certificates provide another benefit: a visual cue (green bar) in the
browser tells the consumer that the business has gone through the effort to obtain
this certificate, the information has been verified by the CA, and there is a higher
probability that online trust can be established.

The fact is that e-commerce can prove to be extremely compulsive – buy something
now! With cost, time until delivery, and returns policy often highest up the agenda,
security is typically an afterthought at most. It’s no wonder that the cyber criminals
have moved in en masse, lured by the easy pickings and riches to be had. And it’s
this movement that makes security and particularly the use of security online more
important today than ever before.

E-Commerce plays an important role in the US and global economy. The US, with
its technology leadership, has an opportunity to improve the security situation with
respect to Internet e-commerce.

As more people spend time online, it’s everyone’s responsibility to demand more
from the sites that we visit. With almost 25,000 suspected phishing sites likely
using valid SSL certificates in the year leading up to March 201411, the foundations
of trusted commerce could be undermined. Phishing is essentially an online con
game and phishers can been seen as tech-savvy con artists and identity thieves.
They use SPAM, malicious web sites, email messages and instant messages to trick
people into divulging sensitive information, such as bank and credit card accounts.
The website element is key here – if consumers do not know which site to trust then
there is a real problem.

Ideally what the industry needs to do is ensure that if consumers are spending
money online, they should be able to trust the site they are shopping on. To do this
the industry needs to make a step change to the type of SSL certificates that help
make e-commerce trustworthy.

Recommendation                                                                                                                                                           We recommend that e-commerce websites, at a minimum use an OV or EV
certificate to secure their website and to convey valid authentication information.
Simply put, DV certificates can be easily obtained by fraudsters, are used in
phishing, and are currently implemented in about 1/3 of all e-commerce websites.
E-commerce companies that accept credit card data and ship products via online
purchases should be required to use a minimum of an OV certificate. DV certificates
are just not appropriate for this purpose due to the high risk of fraud.

E-Commerce needs relate to an environment where 552 million identities were
exposed in 201312. Once identities are stolen, they are used by attackers to
compromise other accounts, through password reset features on websites.
Depending on the stolen information, they could use the data to make bank
transfers to accounts under their control or create fraudulent credit cards.

Requiring OV or better for e-commerce is about:
1. Facilitating trade and commerce
2. Making the Internet safer
3. Helping legitimate small businesses better establish online credibility
4. Protecting consumers
5. Reducing fraud
6. Building trust

Requiring OV for e-commerce significantly increases the cost and time needed for
fraudsters to obtain a certificate because:
1. OV requires a business be established which means they would have to go
through the steps to register a business

2. OV requires a phone call verification or information from publicly available
data sources, the latter which is unlikely given fraudsters do not like to bind
themselves to a physical location
However, this does NOT increase the time required for legitimate businesses to
obtain an OV certificate.

End users have the right to expect certain levels of security when shopping online.
Requiring an online merchant to use an OV or EV certificate will help protect
consumers from fraud while requiring very minimal additional cost to the merchant.
There are certainly good uses for DV certificates such as web blogs and non-critical
login sites where the ability to steal money or personal data is trivial and would
not be attractive to cybercriminals. E-commerce however, does not fall into that

Browsers can also play a role in helping users identify the types of certificates
used on websites by surfacing this information to the forefront. As stated earlier
browsers do not readily distinguish DV and OV certificates because they believe
users cannot comprehend the difference. While some studies show users can be
overwhelmed with information that they then choose to ignore13, others make
the case for an easy to understand pictorial coupled with simplified language to
give users the information they need. Consider research performed by Carleton
University in Ontario, Canada14 which showed users three sample displays. The
displays below are sample indicators designed to show users that while their
traffic is encrypted (Privacy Protected), there are 3 different and distinct levels of
authentication which are easily conveyed. The left most pictorial could correspond
to a DV certificate since identity confidence is low. The middle warning where
identity confidence is medium corresponds to an OV certificate and the right display
represents an EV certificate where identity confidence is high. The research showed
a substantial improvement in user understanding of warnings presented in this

We support additional research to determine the types of browser warnings that are
effective for most end users.

We have shown two ways in which fraud with DV certificates can be reduced: by
requiring that OV or EV certificates be used for e-commerce websites, and how
browsers can improve the user interface related to certificate types. It’s time for the
community to come together and cooperatively address the issues highlighted in
this paper.