312-50V7 Question #403: Real Exam Question with Answer & Explanation

You are the security administrator of Jaco Banking Systems located in Boston. You are setting up customer with a single password, you give them a printed list of 100 unique passwords. Each time the customer needs to log into the e-banking system website, the customer enters the next password on the list. If someone sees them type the password using shoulder surfing, MiTM or keyloggers, then no damage is done because the password will not be accepted a second time. Once the list of 100 passwords is almost finished, the system automatically sends out a new password list by encrypted e-mail to the customer. You are confident that this security implementation will protect the customer from password abuse. Two months later, a group of hackers called "HackJihad" found a way to access the one-time password list issued to jacobank.com) and used phishing attacks to direct ignorant customers to it. The fake website asked users for their e-banking username and password, and the next unused entry from their one-time password sheet. The hackers collected 200 customer's username/passwords this way. They transferred money from the customer's bank account to various offshore accounts. Your decision of password policy implementation has cost the bank with USD 925,000 to hackers. You immediately shut down the e-banking website while figuring out the next best security solution. What effective security solution will you recommend in this case?