Is Everything We Know About Password-Stealing Wrong?

US Federal Reserve Regulation E guarantees that consumers are made whole when their bank passwords are stolen. The implications lead to several interesting conclusions. First, emptying accounts is extremely hard: transferring money in a way that is irreversible can generally only be done in a way that cannot later be repudiated. Password-enabled transfers can always be repudiated, which explains the importance of mules who accept bad transfers and initiate good ones. This suggests that the mules' accounts, rather than the victims', are pillaged. Passwords are but one link in the cybercrime value chain. Despite appearances, password stealing is a bad business proposition.