November, 2013


26
Nov 13

An Anti-Fraud Service for Fraudsters

Many online businesses rely on automated fraud detection tools to weed out suspicious and unauthorized purchases. Oddly enough, the sorts of dodgy online businesses advertised by spam do the same thing, only they tend to use underground alternatives that are far cheaper and tuned to block not only fraudulent purchases, but also “test buys” from security researchers, law enforcement and other meddlers.

One anti-fraud measure commonly used in e-commerce is the address verification service (AVS), which seeks to verify the address of a person claiming to own a credit card. Some business employ additional “geo-IP” checks, which try to determine the geographical location of Website visitors based on their Internet addresses, and then match that with the billing address provided by the customer.

The trouble with these services is that they can get pricey in a hurry, and they’re often sold by the very companies that spammers are trying to outsmart. Enter services like fraudcheck[dot]cc: This service, run by an established spammer on a semi-private cybercrime forum, performs a multitude of checks on each transaction, apparently drawing on accounts from different, legitimate anti-fraud services. It accepts payment solely via WebMoney, a virtual currency that is popular in Russia and Eastern Europe.

fraudcheck[dot]cc resells bundles of anti-fraud services from legitimate providers like MaxMind.

fraudcheck[dot]cc resells bundles of anti-fraud services from legitimate providers like MaxMind.

This fraudster-friendly antifraud service does the following analysis:

  • Queries the geo-IP location from four distinct sources;
  • Calculates the billing ZIP code distance from the customer’s geo-IP coordinates;
  • Checks the customer’s Internet address against lists of known proxies that are used to mask an Internet user’s true location, and assigns a “risk score” of zero to 4.2 (the higher the number, the greater the certainty that the purchase was made via a proxy).
  • Generates a “fraud score” from 0-100 to rate the riskiness of the transaction (100 being the riskiest)

The bulk of the fraud checks appear to be conducted through [hijacked?] accounts at MaxMind.com, a Waltham, Mass. company that screens more than 45 million online transactions per month for 7,000 companies. MaxMind sells a suite of legitimate anti-fraud solutions, including two specifically called out in the screen shot above (minFraud and GeoIP).

As detailed in this white paper (PDF), MaxMind’s minFraud service checks for a number of potential risk factors, such as whether the customer is using a free Webmail account, or there is a mismatch in the shipping and billing address. It also looks to see whether the customer is paying with a card from a known bank. Failure to identify a “bank identification number” (BIN) — the first six digits of any card — may indicate the customer is paying with a prepaid card and thus trying to mask their identity or location.

Based on the combined results of these tests, MaxMind’s service will assign a “fraud score” from 0 to 100, indicating the service’s best guess about whether the transaction should be allowed or declined. In the example from the screenshot above, it’s not clear why the service assigned such a high fraud score (96.84) to the transaction in question — perhaps because the service could not identify the bank that issued the card used in the transaction and determined that it was a prepaid card.

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25
Nov 13

Spam-Friendly Registrar ‘Dynamic Dolphin’ Shuttered

The organization that oversees the Internet domain name registration industry last week revoked the charter of Dynamic Dolphin, a registrar that has long been closely associated with spam and cybercrime.

Scott Richter. Image: 4law.co.il

Scott Richter. Image: 4law.co.il

The move came almost five years after this reporter asked the Internet Corporation for Assigned Names and Numbers (ICANN) to investigate whether the man at the helm of this registrar was none other than Scottie Richter, an avowed spammer who has settled multi-million-dollar spam lawsuits with Facebook, Microsoft and MySpace over the past decade.

According to the contracts that ICANN requires all registrars to sign, registrars may not have anyone as an officer of the company who has been convicted of a criminal offense involving financial activities. While Richter’s spam offenses all involve civil matters, this reporter discovered several years ago that Richter had actually pleaded guilty in 2003 to a felony grand larceny charge.

Richter’s felony rap was detailed in a January 2004 story in the now-defunct Rocky Mountain News; a cached copy of that story is here. It explains that Denver police were investigating a suspected fencing operation involving the purchase and sale of stolen goods by Richter and his associates. Richter, then 32, was busted for conspiring to deal in stolen goods, including a Bobcat, a generator, laptop computers, cigarettes and tools. He later pleaded guilty to one count of grand larceny, and was ordered to pay nearly $38,000 in restitution to cover costs linked to the case.

After reading this story, I registered with the Colorado state courts Website and purchased a copy of the court record detailing Richter’s conviction — available at this link (PDF) — and shared it with ICANN. I also filed an official request with ICANN (PDF) to determine whether Richter was in fact listed as a principal in Dynamic Dolphin. ICANN responded in 2008 that it wasn’t clear whether he was in fact listed as an officer of the company.

But in a ruling issued last week, ICANN said that analysis changed after it had an opportunity to review information regarding Dynamic Dolphin’s voting shares.

“Prior to this review, ICANN had no knowledge that Scott Richter was the 100% beneficial owner of Dynamic Dolphin,” ICANN wrote. “In light of this review, ICANN initiates a review of the application for accreditation from 2011. Based on Section II. B. of the Statement of Registrar Accreditation Policy, Dynamic Dolphin did not disclose in its application for accreditation that Scott Richter was the 100% beneficial owner of Dynamic Dolphin or that Scott Richter was convicted in 2003 for a felony relating to financial activities.”

ICANN has ordered that Dynamic Dolphin be stripped of its accreditation as a registrar, and that all domains registered with Dynamic Dolphin be transferred to another registrar within 28 days. Neither Richter nor a representative for Dynamic Dolphin could be immediately reached for comment.

ICANN’s action is long overdue. Writing for The Washington Post in May 2008, this author called attention to statistics gathered by anti-spam outfit Knujon (“NOJUNK” spelled backwards), which found that more than three quarters of all Web sites advertised through spam at the time were clustered at just 10 domain name registrars. Near the top of that list was Dynamic Dolphin, a registrar owned by an entity called CPA Empire, which in turn is owned by Media Breakaway LLC – Richter’s company. Another story published around that same time by The Washington Post showed that Media Breakaway was behind the wholesale hijacking of some 65,586 Internet addresses from a San Francisco, Calif. organization that was among the early pioneers of the Internet.

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21
Nov 13

No Bail for Alleged Silk Road Mastermind

A federal judge has denied bail for Ross Ulbricht, the 29-year-old man arrested last month on suspicion of running the Silk Road, an online black market that offered everything from drugs and guns to computer hackers and hitmen for hire.

The decision came after federal prosecutors in New York dumped a virtual truckload of additional incriminating evidence supporting charges that Ulbricht was the infamous Silk Road administrator known as the “Dread Pirate Roberts” (DPR), and that he was indeed a strong flight risk. To top it off, the government also now alleges that Ulbricht orchestrated and paid for murder-for-hire schemes targeting six individuals (until today, Ulbricht was accused of plotting just two of these executions).

Fraudulent identity documents allegedly ordered by Ulbricht.

Fraudulent identity documents allegedly ordered by Ulbricht.

The documents released today indicate that Ulbricht was a likely flight risk; they allege that prior to his arrest, Ulbricht had researched how to buy a citizenship in Dominica. The government said that the laptop seized from Ulbricht contained reference guides for obtaining “economic citizenship” in other countries. “In particular, the computer contained an application completed by Ulbricht for citizenship in Dominica, along with reference materials explaining that Dominica’s ‘economic citizenship’ program offers ‘instant’ citizenship in exchange for a one-time ‘$75,000 donation’ to the country’s government,’”, the government’s bail submission (PDF) notes. A copy of the application for citizenship in Dominica allegedly found on Ulbricht’s laptop is here (PDF).

In addition, prosecutors unveiled a photo showing the assortment of fake IDs that Ulbricht had allegedly ordered off the Silk Road (see image above), which included identity documents bearing his picture and various pseudonyms in Australia, Canada, and the United Kingdom, among other places.

According to the Justice Department, evidence from Ulbricht’s computer also shows that he had contemplated and prepared for a life on the run.

“For example, one file found on the computer, labeled ‘emergency,’ contains a list of apparent to-do items in the event that Ulbricht learned that law enforcement was closing in on him. It reads as follows:

encrypt and backup important files on laptop to memory stick:
destroy laptop hard drive and hide/dispose
destroy phone and hide/dispose
Hide memory stick
get new laptop
go to end of train
find place to live on craigslist for cash
create new identity (name, backstory)”

The prosecution also released several screenshots of Ulbricht’s computer as it was found when he was arrested at a San Francisco public library. According to investigators, Ulbricht was logged in to the Silk Road and was administering the site when he was apprehended, as indicated by this screenshot, which shows a Silk Road page titled “mastermind.” The government says this page provided an overview of transactions and money moving through the site:

DPR-mastermind

Another screen shot shows the Silk Road “support” page as found logged in on the computer seized from Ulbricht:

DPR-support

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20
Nov 13

Cupid Media Hack Exposed 42M Passwords

An intrusion at online dating service Cupid Media earlier this year exposed more than 42 million consumer records, including names, email addresses, unencrypted passwords and birthdays, according to information obtained by KrebsOnSecurity.

The data stolen from Southport, Australia-based niche dating service Cupid Media was found on the same server where hackers had amassed tens of millions of records stolen from Adobe, PR Newswire and the National White Collar Crime Center (NW3C), among others.

The purloined database contains more than 42 million entries in the format shown in the redacted image below. I reached out to Cupid Media on Nov. 8. Six days later, I heard back from Andrew Bolton, the company’s managing director. Bolton said the information appears to be related to a breach that occurred in January 2013.

“In January we detected suspicious activity on our network and based upon the information that we had available at the time, we took what we believed to be appropriate actions to notify affected customers and reset passwords for a particular group of user accounts,” Bolton said. “We are currently in the process of double-checking that all affected accounts have had their passwords reset and have received an email notification.”

 A redacted screen shot showing several of the stolen user accounts. Passwords were stored in plain text.

A redacted screen shot showing several of the stolen user accounts. Passwords were stored in plain text.

I couldn’t find any public record — in the media or elsewhere — about this January 2013 breach. When I told Bolton that all of the Cupid Media users I’d reached confirmed their plain text passwords as listed in the purloined directory, he suggested I might have “illegally accessed” some of the company’s member accounts. He also noted that “a large portion of the records located in the affected table related to old, inactive or deleted accounts.”

“The number of active members affected by this event is considerably less than the 42 million that you have previously quoted,” Bolton said.

The company’s Web site and Twitter feed state that Cupid Media has more than 30 million customers around the globe. Unfortunately, many companies have a habit of storing data on customers who are no longer active.

Alex Holden, chief information security officer at Hold Security LLC, said Bolton’s statement is reminiscent of the stance that software giant Adobe Systems Inc. took in the wake of its recently-disclosed breach. In that case, a database containing the email and password information on more than 150 million people was stolen and leaked online, but Adobe says it has so far only found it necessary to alert the 38 million active users in the leaked database.

“Adobe said they have 38 million users and they lost information on 150 million,” Holden said. “It comes to down to the definition of users versus individuals who entrusted their data to a service.”

34 million Cupid users registered with a Yahoo, Hotmail or Gmail address. 56 Homeland Security Dept. employees were looking for love here as well.

34 million Cupid users registered with a Yahoo, Hotmail or Gmail address. 56 Homeland Security Dept. employees were looking for love here as well.

The danger with such a large breach is that far too many people reuse the same passwords at multiple sites, meaning a compromise like this can give thieves instant access to tens of thousands of email inboxes and other sensitive sites tied to a user’s email address. Indeed, Facebook has been mining the leaked Adobe data for information about any of its own users who might have reused their Adobe password and inadvertently exposed their Facebook accounts to hijacking as a result of the breach.

Holden added that this database would be a gold mine for spammers, noting that Cupid’s customers are probably more primed than most to be responsive to the types of products typically advertised in spam (think male enhancement pills, dating services and diet pills).

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19
Nov 13

Don’t Like Spam? Complain About It.

Cynical security experts often dismiss anti-spam activists as grumpy idealists with a singular, Sisyphean obsession.  The cynics question if it’s really worth all that time and effort to complain to ISPs and hosting providers about customers that are sending junk email? Well, according to at least one underground service designed for spammers seeking to avoid anti-spam activists, the answer is a resounding “yes!”

atball

Until recently, this reporter was injected into one of the most active and private underground spam forums (the forum no longer exists; for better or worse, the administrator shuttered it in response to this story). Members of this spam forum sold and traded many types of services catering to the junk email industry, including comment spam tools, spam bots, malware, and “installs” — the practice of paying for the privilege of uploading your malware to machines that someone else has already infected.

But among the most consistently popular services on spammer forums are those that help junk emailers manage gigantic email address lists. More specifically, these services specialize keeping huge distribution lists “scrubbed” of inactive addresses as well as those belonging to known security firms and anti-spam activists.

Just as credit card companies have an ironic and derisive nickname for customers who pay off their balances in full each month — these undesirables are called “deadbeats” — spammers often label anti-spam activists as “abusers,” even though the spammers themselves are the true abusers. The screen shot below shows one such email list management service, which includes several large lists of email addresses for people who have explicitly opted out of receiving junk messages (people who once purchased from spam but later asked to be removed or reported the messages as spam). Note the copyright symbol next to the “Dark Side 2012″ notation, which  is a nice touch:

This service made for spammers helps them scrub email distribution lists of addresses for anti-spam activists and security firms.

This service made for spammers helps them scrub email distribution lists of addresses for anti-spam activists and security firms.

The bottom line shows that this service also includes a list of more than 580,000 email addresses thought to be associated with anti-spam activists, security firms and other “abusers.” This list included a number of “spamtrap” addresses created specifically for collecting and reporting spam. The note in the above entry — “abusers_from_severa” — indicates that this particular list was provided by an infamous Russian spammer known as Peter Severa. This blog has featured several stories about Severa, including one that examines his possible identity and role in the development and dissemination of the Waledac and Storm worms.

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18
Nov 13

vBulletin Breach Prompts Password Reset

Forum software maker vBulletin is urging users to change their passwords following a recent breach of its networks. The attackers who claimed responsibility for the intrusion say they broke in using a zero-day flaw that is now being sold in several places online, but vBulletin maintains it is not aware of any zero-day attacks against current versions of its product.

vbulletinOn Thursday, Nov. 14, this publication received an email with several screen shots and a short note indicating that vBulletin had been hacked. The attackers claimed they had knowledge of a zero-day bug in versions 4.x and 5.x of vBulletin, and that they had used the same vulnerability to break into vbulletin.com and macrumors.com.

That same day, I reached out to both vBulletin and MacRumors. I heard immediately from MacRumors owner Arnold Kim, who pointed my attention to a story the publication put up last Monday acknowledging a breach.  Kim said MacRumors actually runs version 3.x of vBulletin, and that the hackers appear to have broken in using a clever cross-site-scripting attack.

“In VB3, moderators can post ‘announcements’  in the forum, and by default announcements allow HTML,” Kim explained. “The hacker or hackers were able to somehow get a moderator’s login password, and used that to embed Javascript in an announcement and waited for an administrator to load that page. Once that happened, the Javascript installed a plugin in the background that allowed [the attackers] to execute PHP scripts.”

Kim said the attackers in that case even came on the MacRumors forum and posted a blow-by-blow of the attack, confirming that the cause of the breach was a compromised moderator account. Kim said the person who left the comment was using the same Internet address as the attacker who hacked his forum, and that the moderator account that got compromised on MacRumors also had an account with the same name and password on vBulletin.com.

“Stop [blaming] this on the ‘outdated vBulletin software’,” the apparent culprit wrote. ” The fault lied within a single moderator. All of you kids that are saying upgrade from 3.x to 4.x or 5.x have no idea what you’re talking about. 3.x is far more secure than the latter. Just because it’s older, it doesn’t mean it’s any worse.”

On Saturday, Nov. 16, I heard back from vBulletin, which said it had just posted a note urging users to change their passwords, and that the company was not aware of any zero day bugs in its software. vBulletin didn’t say which version of its software was attacked, only that “our staging server was running a wide variety of versions of the software.” The vBulletin homepage says the site is powered by version 5.0.5.

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14
Nov 13

Feds Charge Calif. Brothers in Cyberheists

Federal authorities have arrested two young brothers in Fresno, Calif. and charged the pair with masterminding a series of cyberheists that siphoned millions of dollars from personal and commercial bank accounts at U.S. banks and brokerages.

Photo: Fresnorotary.org

Adrian, left, and Gheorghe Baltaga (right). Photo: Fresnorotary.org

Taken into custody on Oct. 29 were Adrian and Gheorghe Baltaga, 25 and 26-year-old men from Moldova. Documents unsealed by the U.S. District Court for the Northern District of California laid out a conspiracy in which the brothers allegedly stole login credentials for brokerage accounts of Fidelity Investments customers, and then set up fraudulent automated clearing house (ACH) links between victim accounts and prepaid debit card accounts they controlled.

From there, according to the government, the men then used the debit cards to purchase money orders from MoneyGram and the U.S. Postal Service, which were deposited into different accounts that they could pull cash from using ATM cards. An attorney for the Baltaga brothers did not respond to multiple requests for comment.

According to interviews with investigators, the Baltaga indictments (PDF) reveal surprisingly little about the extent of the cybercrimes that investigators believe these men committed. For example, sources familiar with the investigation say the Baltaga brothers were involved in a 2012 cyberheist against a Maryland title company that was robbed of $1.7 million.

In April 2012, I was tracking a money mule recruitment gang that had hired dozens of people through bogus work-at-home jobs that were set up to help cybercrooks launder funds stolen from hacked small businesses and retail bank accounts. One of the mules I contacted said she’d just received notification that she was to expect a nearly $10,000 transfer to her bank account, and that she should pull the money out in cash and wire the funds (minus her 8 percent commission) to three different individuals in Ukraine and Russia.

The mule said she’d been hired by a software company in Australia, and that her job was to help the firm process payments from the company’s international clients. This mule told me the name of her employer’s “client” that had sent the transfer, and a Google search turned up a Washington, D.C.-area title firm which asked not to be named in this story out of concern that company’s competitors would use it against them.

Baltaga residence in Fresno.

Baltaga residence in a Fresno gated community.

That title firm was unaware of it at the time, but fraudsters had recently installed the ZeuS Trojan on an employee’s computer and were using it to send wire transfers and ACH payments to money mules and to bank accounts controlled by the bad guys. In many cases, victim companies will react with hostility when alerted to such crimes by a reporter, but in this case the company quickly contacted their bank and discovered that the thieves had already pushed through more than $700,000 in fraudulent wires and ACH payments. Just minutes before I contacted the title firm, the crooks had initiated a fraudulent wire transfer of $1 million.

The company and its bank were ultimately able to block the $1 million wire and claw back about half of the $700,000 in wires and fraudulent ACH transfers. The firm and its bank seemed doomed to battle it out in court over the remaining amount, but earlier this year the two sides reached a confidential settlement.

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12
Nov 13

Zero-Days Rule November’s Patch Tuesday

Microsoft today issued security updates to fix at least 19 vulnerabilities in its software, including a zero-day flaw in Internet Explorer browser that is already being actively exploited. Separately, Adobe has released a critical update that plugs at least two security holes in its Flash Player software.

crackedwinThree of the eight patches that Microsoft released earned its most dire “critical” label, meaning the vulnerabilities fixed in them can be exploited by malware or miscreants remotely without any help from Windows users. Among the critical patches is an update for Internet Explorer (MS13-088) that mends at least two holes in the default Windows browser (including IE 11). MS13-089 is a critical file handling flaw present in virtually every supported version of Windows.

The final critical patch – MS13-090 — fixes essentially another IE flaw (ActiveX) that showed up in targeted attacks late last week. Microsoft says attackers used a second, “information disclosure” vulnerability in tandem with the ActiveX flaw, but that the company is still investigating that one. It noted that its Enhanced Mitigation Experience Toolkit (EMET) tool successfully blocked the ActiveX exploit.

Nevertheless, it’s important for IE users to apply these updates as quickly as possible. According to Rapid7, exploit code for the ActiveX vulnerability appeared on Pastebin this morning.

“It was known to be under some targeted exploitation, but that will probably expand now that the exploit is public,” said Ross Barrett, senior manager of security engineering at Rapid7. “I would call patching this issue priority #1.” For what it’s worth, Microsoft agrees, at least according to this suggested patch deployment chart.

Today’s patch batch from Redmond did not include an official patch for yet another zero-day vulnerability that has been under active exploitation, although Microsoft did release a stopgap Fix-It tool last week to help blunt the threat. The company also is once again advising Windows users to take another look at EMET.

Check out Microsoft’s Technet blog for more information on these and other updates that the company released today.

brokenflash-aIn a separate patch release, Adobe issued a fix for its Flash Player software for Windows, Mac, Linux and Android devices. The Flash update brings the ubiquitous player to v. 11.9.900.152 on Mac and Windows systems. Users browsing the Web with IE10 or IE11 on Windows 8.x should get the new version of Flash (11.9.900.152) automatically; IE users not on Windows 8 will need to update manually if Flash is not set to auto-update.

To check which version of Flash you have installed, visit this page. Direct links to the various Flash installers are available here. Be aware that downloading Flash Player from Adobe’s recommended spot – this page – often includes add-ons, security scanners or other crud you probably don’t want. Strangely enough, when I visited that page today with IE10 , the download included a pre-checked box to install Google Toolbar and to switch my default browser to Google Chrome.

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11
Nov 13

Facebook Warns Users After Adobe Breach

Facebook is mining data leaked from the recent breach at Adobe in an effort to help its users better secure their accounts. Facebook users who used the same email and password combinations at both Facebook and Adobe’s site are being asked to change their password and to answer some additional security questions.

Message that Facebook has been sending to certain users whose information was found in the stolen Adobe user data.

Message that Facebook has been sending to certain users whose information was found in the stolen Adobe data.

Facebook spokesman Jay Nancarrow said Facebook is constantly on the lookout for data leaked from other breach incidents that may endanger accounts of its own users. Nancarrow said that the social networking service has similarly acted in the wake of other high profile breaches to determine if any of its own users’ credentials may have been affected.

“We actively look for situations where the accounts of people who use Facebook could be at risk—even if the threat is external to our service,” said Nancarrow, who declined to say exactly how many Facebook users were seeing the above message. “When we find these situations, we present messages like the one in the screenshot to help affected people secure their accounts.”

In a breach first announced on this blog Oct. 3, 2013, Adobe said hackers had stolen nearly 3 million encrypted customer credit card records, as well as login data for an undetermined number of Adobe user accounts. Earlier this month, Adobe said it had actually notified more than 38 million users that their encrypted account data may have been compromised. But as first reported here on Oct. 29, the breach may have impacted closer to 150 million Adobe users.

What’s more, experts say Adobe appears to have used a single encryption key to scramble all of the leaked user credentials, meaning that anyone who computes, guesses or acquires the decryption key immediately gets access to all the passwords in the database. In a detailed analysis of the enormity of Adobe’s blunder, Paul Ducklin of Sophos describes how researchers managed to work out a decent chunk of the encrypted user passwords just by comparing the leaked data to other large password breaches and to password hint information included in the Adobe account cache.

Update, 2:07 p.m. ET: Looks like Diapers.com and Soap.com sent similar notices to their customers on Sunday. A hit tip to readers Arthur and Dave for sharing copies of the emails from those two sites.

Update, Nov. 12, 4:07 p.m. ET: The initial story seems to have confused a number of readers, perhaps because I left out an explanation of what exactly Facebook did. As a result, many readers seem to have hastily and erroneously concluded that Facebook doesn’t properly secure its users passwords if it can simply compare them in plain text to the Adobe passwords that have already been worked out.

As I proffered in a follow-up comment on this story, Facebook and any other company can take any of the Adobe passwords that have already been guessed or figured out and simply hash those passwords with whatever one-way hashing mechanism(s) they use internally. After that, it’s just a matter of finding any overlapping email addresses that use the same password. Facebook’s Chris Long confirmed that this is more less what the company did.


6
Nov 13

CryptoLocker Crew Ratchets Up the Ransom

Last week’s article about how to prevent CryptoLocker ransomware attacks generated quite a bit of feedback and lots of questions from readers. For some answers — and since the malware itself has morphed significantly in just a few day’s time — I turned to Lawrence Abrams and his online help forum BleepingComputer.com, which have been following and warning about this scourge for several months.

This message is left by CryptoLocker for victims whose antivirus software removed the file needed to pay the ransom.

This message is left by CryptoLocker for victims whose antivirus software removes the file needed to pay the ransom.

To recap, CryptoLocker is a diabolical new twist on an old scam. The malware encrypts all of the most important files on a victim PC — pictures, movie and music files, documents, etc. — as well as any files on attached or networked storage media. CryptoLocker then demands payment via Bitcoin or MoneyPak and installs a countdown clock on the victim’s desktop that ticks backwards from 72 hours. Victims who pay the ransom receive a key that unlocks their encrypted files; those who let the timer expire before paying risk losing access to their files forever.

Or, at least, that’s how it worked up until a few days ago, when the crooks behind this scam began easing their own rules a bit to accommodate victims who were apparently willing to pay up but simply couldn’t jump through all the hoops necessary in the time allotted.

“They realized they’ve been leaving money on the table,” Abrams said. “They decided there’s little sense in not accepting the ransom money a week later if the victim is still willing to pay to get their files back.”

Part of the problem, according to Abrams, is that few victims even know about Bitcoins or MoneyPak, let alone how to obtain or use these payment mechanisms.

“We put up survey and asked how many [victims] had paid the ransom with Bitcoins, and almost no one said they did, Abrams said. “Most paid with MoneyPak. The people who did pay with Bitcoins said they found the process for getting them was so cumbersome that it took them a week to figure it out.”

Another major stumbling block that prevents many otherwise willing victims from paying the ransom is, ironically, antivirus software that detects CryptoLocker — but only after the malware has locked the victim’s most prized files with virtually uncrackable encryption.

“Originally, when antivirus software would clean a computer, it would remove the CryptoLocker infection, which made it so the user could not pay the ransom,” Abrams said. “Newer versions change the desktop background to include a URL where the user can download the infection again and pay the ransom.”

The idea of purposefully re-infecting a machine by downloading and executing highly destructive malware may be antithetical and even heresy to some security pros. But victims who are facing the annihilation of their most precious files probably have a different view of the situation. Abrams that said his testing has shown that as long as the registry key “HKCU\Software\Cryptolocker_0388″ remains in the Windows registry, re-downloading the malware would not try to re-encrypt the already encrypted data — although it would encrypt any new files added since the initial infection.

“Some antivirus companies have been telling victims not to pay the ransom,” Abrams said. “On the one hand, I get it, because you don’t want to encourage these malware writers. But on the other hand, there are some companies that are facing going out of business if they don’t, and can’t afford to take the holier-that-thou route.”

CRYPTOLOCKER DECRYPTION SERVICE

On Friday, Nov. 1, the crooks behind this malware campaign launched a “customer service” feature that they have been promising to debut for weeks: a CryptoLocker Decryption Service. “This service allow [sic] you to purchase private key and decrypter for files encrypted by CryptoLocker,” the site reads. “Customers” of the service can search for their “order number” simply by uploading any of the encrypted files.

“They’re calling it an ‘order,’ as if victims posted an order at Amazon.com,” Abrams said.

The "Cryptolocker Decryption Service."

The “Cryptolocker Decryption Service.”

“If you already purchased private key using CryptoLocker, then you can download private key and decrypter for free,” explains the service, which is currently hosted at one of several addresses on the Tor anonymity network. The decryption service site is not reachable from the regular Internet; rather, victims must first download and install special software to access the site – yet another potential hurdle for victims to jump through.

According to Abrams, victims who are still within the initial 72-hour countdown clock can pay the ransom by coughing up two Bitcoins — or roughly $200 using a MoneyPak order. Victims who cannot pay within 72 hours can still get their files back, but for that unfortunate lot the ransom rises fivefold to 10 bitcoins — or roughly USD $2,232 at current exchange rates. And those victims will no longer have the option to pay the ransom via MoneyPak.

Abrams said the service exposes two lies that the attackers have been perpetuating about their scheme. For starters, the bad guys have tried to dissuade victims from rolling back their system clocks to buy themselves more time to get the money together and pay the ransom. According to Abrams, this actually works in many cases to delay the countdown timer. Secondly, the launch of the Cryptolocker Decryption Service belies the claim that private keys needed to unlock files encrypted by CryptoLocker are deleted forever from the attacker’s servers after 72 hours.

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