A Little Sunshine


11
Sep 19

NY Payroll Company Vanishes With $35 Million

MyPayrollHR, a now defunct cloud-based payroll processing firm based in upstate New York, abruptly ceased operations this past week after stiffing employees at thousands of companies. The ongoing debacle, which allegedly involves malfeasance on the part of the payroll company’s CEO, resulted in countless people having money drained from their bank accounts and has left nearly $35 million worth of payroll and tax payments in legal limbo.

Unlike many stories here about cloud service providers being extorted by hackers for ransomware payouts, this snafu appears to have been something of an inside job. Nevertheless, it is a story worth telling, in part because much of the media coverage of this incident so far has been somewhat disjointed, but also because it should serve as a warning to other payroll providers about how quickly and massively things can go wrong when a trusted partner unexpectedly turns rogue.

Clifton Park, NY-based MyPayrollHR — a subsidiary of ValueWise Corp. — disclosed last week in a rather unceremonious message to some 4,000 clients that it would be shutting its virtual doors and that companies which relied upon it to process payroll payments should kindly look elsewhere for such services going forward.

This communique came after employees at companies that depend on MyPayrollHR to receive direct deposits of their bi-weekly payroll payments discovered their bank accounts were instead debited for the amounts they would normally expect to accrue in a given pay period.

To make matters worse, many of those employees found their accounts had been dinged for two payroll periods — a month’s worth of wages — leaving their bank accounts dangerously in the red.

The remainder of this post is a deep-dive into what we know so far about what transpired, and how such an occurrence might be prevented in the future for other payroll processing firms.

A $26 MILLION TEXT FILE

To understand what’s at stake here requires a basic primer on how most of us get paid, which is a surprisingly convoluted process. In a typical scenario, our employer works with at least one third party company to make sure that on every other Friday what we’re owed gets deposited into our bank account.

The company that handled that process for MyPayrollHR is a California firm called Cachet Financial Services. Every other week for more than 12 years, MyPayrollHR has submitted a file to Cachet that told it which employee accounts at which banks should be credited and by how much.

According to interviews with Cachet, the way the process worked ran something like this: MyPayrollHR would send a digital file documenting deposits made by each of these client companies which laid out the amounts owed to each clients’ employees. In turn, those funds from MyPayrollHR client firms then would be deposited into a settlement or holding account maintained by Cachet.

From there, Cachet would take those sums and disburse them into the bank accounts of people whose employers used MyPayrollHR to manage their bi-weekly payroll payments.

But according to Cachet, something odd happened with the instructions file MyPayrollHR submitted on the afternoon of Wednesday, Sept. 4 that had never before transpired: MyPayrollHR requested that all of its clients’ payroll dollars be sent not to Cachet’s holding account but instead to an account at Pioneer Savings Bank that was operated and controlled by MyPayrollHR.

The total amount of this mass payroll deposit was approximately $26 million. Wendy Slavkin, general counsel for Cachet, told KrebsOnSecurity that her client then inquired with Pioneer Savings about the wayward deposit and was told MyPayrollHR’s bank account had been frozen.

Nevertheless, the payroll file submitted by MyPayrollHR instructed financial institutions for its various clients to pull $26 million from Cachet’s holding account — even though the usual deposits from MyPayrollHR’s client banks had not been made. Continue reading →


2
Sep 19

Feds Allege Adconion Employees Hijacked IP Addresses for Spamming

Federal prosecutors in California have filed criminal charges against four employees of Adconion Direct, an email advertising firm, alleging they unlawfully hijacked vast swaths of Internet addresses and used them in large-scale spam campaigns. KrebsOnSecurity has learned that the charges are likely just the opening salvo in a much larger, ongoing federal investigation into the company’s commercial email practices.

Prior to its acquisition, Adconion offered digital advertising solutions to some of the world’s biggest companies, including Adidas, AT&T, Fidelity, Honda, Kohl’s and T-Mobile. Amobee, the Redwood City, Calif. online ad firm that acquired Adconion in 2014, bills itself as the world’s leading independent advertising platform. The CEO of Amobee is Kim Perell, formerly CEO of Adconion.

In October 2018, prosecutors in the Southern District of California named four Adconion employees — Jacob Bychak, Mark ManoogianPetr Pacas, and Mohammed Abdul Qayyum —  in a ten-count indictment on charges of conspiracy, wire fraud, and electronic mail fraud. All four men have pleaded not guilty to the charges, which stem from a grand jury indictment handed down in June 2017.

‘COMPANY A’

The indictment and other court filings in this case refer to the employer of the four men only as “Company A.” However, LinkedIn profiles under the names of three of the accused show they each work(ed) for Adconion and/or Amobee.

Mark Manoogian is an attorney whose LinkedIn profile states that he is director of legal and business affairs at Amobee, and formerly was senior business development manager at Adconion Direct; Bychak is listed as director of operations at Adconion Direct; Quayyum’s LinkedIn page lists him as manager of technical operations at Adconion. A statement of facts filed by the government indicates Petr Pacas was at one point director of operations at Company A (Adconion).

According to the indictment, between December 2010 and September 2014 the defendants engaged in a conspiracy to identify or pay to identify blocks of Internet Protocol (IP) addresses that were registered to others but which were otherwise inactive.

The government alleges the men sent forged letters to an Internet hosting firm claiming they had been authorized by the registrants of the inactive IP addresses to use that space for their own purposes.

“Members of the conspiracy would use the fraudulently acquired IP addresses to send commercial email (‘spam’) messages,” the government charged.

HOSTING IN THE WIND

Prosecutors say the accused were able to spam from the purloined IP address blocks after tricking the owner of Hostwinds, an Oklahoma-based Internet hosting firm, into routing the fraudulently obtained IP addresses on their behalf.

Hostwinds owner Peter Holden was the subject of a 2015 KrebsOnSecurity story titled, “Like Cutting Off a Limb to Save the Body,” which described how he’d initially built a lucrative business catering mainly to spammers, only to later have a change of heart and aggressively work to keep spammers off of his network.

That a case of such potential import for the digital marketing industry has escaped any media attention for so long is unusual but not surprising given what’s at stake for the companies involved and for the government’s ongoing investigations.

Adconion’s parent Amobee manages ad campaigns for some of the world’s top brands, and has every reason not to call attention to charges that some of its key employees may have been involved in criminal activity.

Meanwhile, prosecutors are busy following up on evidence supplied by several cooperating witnesses in this and a related grand jury investigation, including a confidential informant who received information from an Adconion employee about the company’s internal operations. Continue reading →


21
Aug 19

Forced Password Reset? Check Your Assumptions

Almost weekly now I hear from an indignant reader who suspects a data breach at a Web site they frequent that has just asked the reader to reset their password. Further investigation almost invariably reveals that the password reset demand was not the result of a breach but rather the site’s efforts to identify customers who are reusing passwords from other sites that have already been hacked.

But ironically, many companies taking these proactive steps soon discover that their explanation as to why they’re doing it can get misinterpreted as more evidence of lax security. This post attempts to unravel what’s going on here.

Over the weekend, a follower on Twitter included me in a tweet sent to California-based job search site Glassdoor, which had just sent him the following notice:

The Twitter follower expressed concern about this message, because it suggested to him that in order for Glassdoor to have done what it described, the company would have had to be storing its users’ passwords in plain text. I replied that this was in fact not an indication of storing passwords in plain text, and that many companies are now testing their users’ credentials against lists of hacked credentials that have been leaked and made available online.

The reality is Facebook, Netflix and a number of big-name companies are regularly combing through huge data leak troves for credentials that match those of their customers, and then forcing a password reset for those users. Some are even checking for password re-use on all new account signups.

The idea here is to stymie a massively pervasive problem facing all companies that do business online today: Namely, “credential-stuffing attacks,” in which attackers take millions or even billions of email addresses and corresponding cracked passwords from compromised databases and see how many of them work at other online properties.

So how does the defense against this daily deluge of credential stuffing work? A company employing this strategy will first extract from these leaked credential lists any email addresses that correspond to their current user base.

From there, the corresponding cracked (plain text) passwords are fed into the same process that the company relies upon when users log in: That is, the company feeds those plain text passwords through its own password “hashing” or scrambling routine.

Password hashing is designed to be a one-way function which scrambles a plain text password so that it produces a long string of numbers and letters. Not all hashing methods are created equal, and some of the most commonly used methods — MD5 and SHA-1, for example — can be far less secure than others, depending on how they’re implemented (more on that in a moment). Whatever the hashing method used, it’s the hashed output that gets stored, not the password itself.

Back to the process: If a user’s plain text password from a hacked database matches the output of what a company would expect to see after running it through their own internal hashing process, that user is then prompted to change their password to something truly unique. Continue reading →


19
Aug 19

The Rise of “Bulletproof” Residential Networks

Cybercrooks increasingly are anonymizing their malicious traffic by routing it through residential broadband and wireless data connections. Traditionally, those connections have been mainly hacked computers, mobile phones, or home routers. But this story is about so-called “bulletproof residential VPN services” that appear to be built by purchasing or otherwise acquiring discrete chunks of Internet addresses from some of the world’s largest ISPs and mobile data providers.

In late April 2019, KrebsOnSecurity received a tip from an online retailer who’d seen an unusual number of suspicious transactions originating from a series of Internet addresses assigned to a relatively new Internet provider based in Maryland called Residential Networking Solutions LLC.

Now, this in itself isn’t unusual; virtually every provider has the occasional customers who abuse their access for fraudulent purposes. But upon closer inspection, several factors caused me to look more carefully at this company, also known as “Resnet.”

An examination of the IP address ranges assigned to Resnet shows that it maintains an impressive stable of IP blocks — totaling almost 70,000 IPv4 addresses — many of which had until quite recently been assigned to someone else.

Most interestingly, about ten percent of those IPs — more than 7,000 of them — had until late 2018 been under the control of AT&T Mobility. Additionally, the WHOIS registration records for each of these mobile data blocks suggest Resnet has been somehow reselling data services for major mobile and broadband providers, including AT&T, Verizon, and Comcast Cable.

The WHOIS records for one of several networks associated with Residential Networking Solutions LLC.

Drilling down into the tracts of IPs assigned to Resnet’s core network indicates those 7,000+ mobile IP addresses under Resnet’s control were given the label  “Service Provider Corporation” — mostly those beginning with IPs in the range 198.228.x.x.

An Internet search reveals this IP range is administered by the Wireless Data Service Provider Corporation (WDSPC), a non-profit formed in the 1990s to manage IP address ranges that could be handed out to various licensed mobile carriers in the United States.

Back when the WDSPC was first created, there were quite a few mobile wireless data companies. But today the vast majority of the IP space managed by the WDSPC is leased by AT&T Mobility and Verizon Wireless — which have gradually acquired most of their competing providers over the years.

A call to the WDSPC revealed the nonprofit hadn’t leased any new wireless data IP space in more than 10 years. That is, until the organization received a communication at the beginning of this year that it believed was from AT&T, which recommended Resnet as a customer who could occupy some of the company’s mobile data IP address blocks.

“I’m afraid we got duped,” said the person answering the phone at the WDSPC, while declining to elaborate on the precise nature of the alleged duping or the medium that was used to convey the recommendation.

AT&T declined to discuss its exact relationship with Resnet  — or if indeed it ever had one to begin with. It responded to multiple questions about Resnet with a short statement that said, “We have taken steps to terminate this company’s services and have referred the matter to law enforcement.”

Why exactly AT&T would forward the matter to law enforcement remains unclear. But it’s not unheard of for hosting providers to forge certain documents in their quest for additional IP space, and anyone caught doing so via email, phone or fax could be charged with wire fraud, which is a federal offense that carries punishments of up to $500,000 in fines and as much as 20 years in prison.

WHAT IS RESNET?

The WHOIS registration records for Resnet’s main Web site, resnetworking[.]com, are hidden behind domain privacy protection. However, a cursory Internet search on that domain turned up plenty of references to it on Hackforums[.]net, a sprawling community that hosts a seemingly never-ending supply of up-and-coming hackers seeking affordable and anonymous ways to monetize various online moneymaking schemes.

One user in particular — a Hackforums member who goes by the nickname “Profitvolt” — has spent several years advertising resnetworking[.]com and a number of related sites and services, including “unlimited” AT&T 4G/LTE data services, and the immediate availability of more than 1 million residential IPs that he suggested were “perfect for botting, shoe buying.”

The Hackforums user “Profitvolt” advertising residential proxies.

Profitvolt advertises his mobile and residential data services as ideal for anyone who wishes to run “various bots,” or “advertising campaigns.” Those services are meant to provide anonymity when customers are doing things such as automating ad clicks on platforms like Google Adsense and Facebook; generating new PayPal accounts; sneaker bot activity; credential stuffing attacks; and different types of social media spam.

For readers unfamiliar with this term, “shoe botting” or “sneaker bots” refers to the use of automated bot programs and services that aid in the rapid acquisition of limited-release, highly sought-after designer shoes that can then be resold at a profit on secondary markets. All too often, it seems, the people who profit the most in this scheme are using multiple sets of compromised credentials from consumer accounts at online retailers, and/or stolen payment card data.

To say shoe botting has become a thorn in the side of online retailers and regular consumers alike would be a major understatement: A recent State of The Internet Security Report (PDF) from Akamai (an advertiser on this site) noted that such automated bot activity now accounts for almost half of the Internet bandwidth directed at online retailers. The prevalance of shoe botting also might help explain Footlocker‘s recent $100 million investment in goat.com, the largest secondary shoe resale market on the Web.

In other discussion threads, Profitvolt advertises he can rent out an “unlimited number” of so-called “residential proxies,” a term that describes home or mobile Internet connections that can be used to anonymously relay Internet traffic for a variety of dodgy deals.

From a ne’er-do-well’s perspective, the beauty of routing one’s traffic through residential IPs is that few online businesses will bother to block malicious or suspicious activity emanating from them.

That’s because in general the pool of IP addresses assigned to residential or mobile wireless connections cycles intermittently from one user to the next, meaning that blacklisting one residential IP for abuse or malicious activity may only serve to then block legitimate traffic (and e-commerce) from the next user who gets assigned that same IP. Continue reading →


14
Aug 19

Meet Bluetana, the Scourge of Pump Skimmers

Bluetana,” a new mobile app that looks for Bluetooth-based payment card skimmers hidden inside gas pumps, is helping police and state employees more rapidly and accurately locate compromised fuel stations across the nation, a study released this week suggests. Data collected in the course of the investigation also reveals some fascinating details that may help explain why these pump skimmers are so lucrative and ubiquitous.

The new app, now being used by agencies in several states, is the brainchild of computer scientists from the University of California San Diego and the University of Illinois Urbana-Champaign, who say they developed the software in tandem with technical input from the U.S. Secret Service (the federal agency most commonly called in to investigate pump skimming rings).

The Bluetooth pump skimmer scanner app ‘Bluetana’ in action.

Gas pumps are a perennial target of skimmer thieves for several reasons. They are usually unattended, and in too many cases a handful of master keys will open a great many pumps at a variety of filling stations.

The skimming devices can then be attached to electronics inside the pumps in a matter of seconds, and because they’re also wired to the pump’s internal power supply the skimmers can operate indefinitely without the need of short-lived batteries.

And increasingly, these pump skimmers are fashioned to relay stolen card data and PINs via Bluetooth wireless technology, meaning the thieves who install them can periodically download stolen card data just by pulling up to a compromised pump and remotely connecting to it from a Bluetooth-enabled mobile device or laptop.

According to the study, some 44 volunteers  — mostly law enforcement officials and state employees — were equipped with Bluetana over a year-long experiment to test the effectiveness of the scanning app.

The researchers said their volunteers collected Bluetooth scans at 1,185 gas stations across six states, and that Bluetana detected a total of 64 skimmers across four of those states. All of the skimmers were later collected by law enforcement, including two that were reportedly missed in manual safety inspections of the pumps six months earlier.

While several other Android-based apps designed to find pump skimmers are already available, the researchers said Bluetana was developed with an eye toward eliminating false-positives that some of these other apps can fail to distinguish.

“Bluetooth technology used in these skimmers are also used for legitimate products commonly seen at and near gas stations such as speed-limit signs, weather sensors and fleet tracking systems,” said Nishant Bhaskar, UC San Diego Ph.D. student and principal author of the study. “These products can be mistaken for skimmers by existing detection apps.” Continue reading →


9
Aug 19

iNSYNQ Ransom Attack Began With Phishing Email

A ransomware outbreak that hit QuickBooks cloud hosting firm iNSYNQ in mid-July appears to have started with an email phishing attack that snared an employee working in sales for the company, KrebsOnSecurity has learned. It also looks like the intruders spent roughly ten days rooting around iNSYNQ’s internal network to properly stage things before unleashing the ransomware. iNSYNQ ultimately declined to pay the ransom demand, and it is still working to completely restore customer access to files.

Some of this detail came in a virtual “town hall” meeting held August 8, in which iNSYNQ chief executive Elliot Luchansky briefed customers on how it all went down, and what the company is doing to prevent such outages in the future.

A great many iNSYNQ’s customers are accountants, and when the company took its network offline on July 16 in response to the ransomware outbreak, some of those customers took to social media to complain that iNSYNQ was stonewalling them.

“We could definitely have been better prepared, and it’s totally unacceptable,” Luchansky told customers. “I take full responsibility for this. People waiting ridiculous amounts of time for a response is unacceptable.”

By way of explaining iNSYNQ’s initial reluctance to share information about the particulars of the attack early on, Luchansky told customers the company had to assume the intruders were watching and listening to everything iNSYNQ was doing to recover operations and data in the wake of the ransomware outbreak.

“That was done strategically for a good reason,” he said. “There were human beings involved with [carrying out] this attack in real time, and we had to assume they were monitoring everything we could say. And that posed risks based on what we did say publicly while the ransom negotiations were going on. It could have been used in a way that would have exposed customers even more. That put us in a really tough bind, because transparency is something we take very seriously. But we decided it was in our customers’ best interests to not do that.”

A paid ad that comes up prominently when one searches for “insynq” in Google.

Luchansky did not say how much the intruders were demanding, but he mentioned two key factors that informed the company’s decision not to pay up.

“It was a very substantial amount, but we had the money wired and were ready to pay it in cryptocurrency in the case that it made sense to do so,” he told customers. “But we also understood [that paying] would put a target on our heads in the future, and even if we actually received the decryption key, that wasn’t really the main issue here. Because of the quick reaction we had, we were able to contain the encryption part” to roughly 50 percent of customer systems, he said.

Luchansky said the intruders seeded its internal network with MegaCortex, a potent new ransomware strain first spotted just a couple of months ago that is being used in targeted attacks on enterprises. He said the attack appears to have been carefully planned out in advance and executed “with human intervention all the way through.”

“They decided they were coming after us,” he said. “It’s one thing to prepare for these sorts of events but it’s an entirely different experience to deal with first hand.”

According to an analysis of MegaCortex published this week by Accenture iDefense, the crooks behind this ransomware strain are targeting businesses — not home users — and demanding ransom payments in the range of two to 600 bitcoins, which is roughly $20,000 to $5.8 million.

“We are working for profit,” reads the ransom note left behind by the latest version of MegaCortex. “The core of this criminal business is to give back your valuable data in the original form (for ransom of course).”

A portion of the ransom note left behind by the latest version of MegaCortex. Image: Accenture iDefense.

Continue reading →


7
Aug 19

Who Owns Your Wireless Service? Crooks Do.

Incessantly annoying and fraudulent robocalls. Corrupt wireless company employees taking hundreds of thousands of dollars in bribes to unlock and hijack mobile phone service. Wireless providers selling real-time customer location data, despite repeated promises to the contrary. A noticeable uptick in SIM-swapping attacks that lead to multi-million dollar cyberheists.

If you are somehow under the impression that you — the customer — are in control over the security, privacy and integrity of your mobile phone service, think again. And you’d be forgiven if you assumed the major wireless carriers or federal regulators had their hands firmly on the wheel.

No, a series of recent court cases and unfortunate developments highlight the sad reality that the wireless industry today has all but ceded control over this vital national resource to cybercriminals, scammers, corrupt employees and plain old corporate greed.

On Tuesday, Google announced that an unceasing deluge of automated robocalls had doomed a feature of its Google Voice service that sends transcripts of voicemails via text message.

Google said “certain carriers” are blocking the delivery of these messages because all too often the transcripts resulted from unsolicited robocalls, and that as a result the feature would be discontinued by Aug. 9. This is especially rich given that one big reason people use Google Voice in the first place is to screen unwanted communications from robocalls, mainly because the major wireless carriers have shown themselves incapable or else unwilling to do much to stem the tide of robocalls targeting their customers.

AT&T in particular has had a rough month. In July, the Electronic Frontier Foundation (EFF) filed a class action lawsuit on behalf of AT&T customers in California to stop the telecom giant and two data location aggregators from allowing numerous entities — including bounty hunters, car dealerships, landlords and stalkers — to access wireless customers’ real-time locations without authorization.

And on Monday, the U.S. Justice Department revealed that a Pakistani man was arrested and extradited to the United States to face charges of bribing numerous AT&T call-center employees to install malicious software and unauthorized hardware as part of a scheme to fraudulently unlock cell phones.

Ars Technica reports the scam resulted in millions of phones being removed from AT&T service and/or payment plans, and that the accused allegedly paid insiders hundreds of thousands of dollars to assist in the process.

We should all probably be thankful that the defendant in this case wasn’t using his considerable access to aid criminals who specialize in conducting unauthorized SIM swaps, an extraordinarily invasive form of fraud in which scammers bribe or trick employees at mobile phone stores into seizing control of the target’s phone number and diverting all texts and phone calls to the attacker’s mobile device.

Late last month, a federal judge in New York rejected a request by AT&T to dismiss a $224 million lawsuit over a SIM-swapping incident that led to $24 million in stolen cryptocurrency.

The defendant in that case, 21-year-old Manhattan resident Nicholas Truglia, is alleged to have stolen more than $80 million from victims of SIM swapping, but he is only one of many individuals involved in this incredibly easy, increasingly common and lucrative scheme. The plaintiff in that case alleges that he was SIM-swapped on two different occasions, both allegedly involving crooked or else clueless employees at AT&T wireless stores.

And let’s not forget about all the times various hackers figured out ways to remotely use a carrier’s own internal systems for looking up personal and account information on wireless subscribers.

So what the fresh hell is going on here? And is there any hope that lawmakers or regulators will do anything about these persistent problems? Gigi Sohn, a distinguished fellow at the Georgetown Institute for Technology Law and Policy, said the answer — at least in this administration — is probably a big “no.”

“The takeaway here is the complete and total abdication of any oversight of the mobile wireless industry,” Sohn told KrebsOnSecurity. “Our enforcement agencies aren’t doing anything on these topics right now, and we have a complete and total breakdown of oversight of these incredibly powerful and important companies.” Continue reading →


24
Jul 19

Neo-Nazi SWATters Target Dozens of Journalists

Nearly three dozen journalists at a broad range of major publications have been targeted by a far-right group that maintains a Deep Web database listing the personal information of people who threaten their views. This group specializes in encouraging others to harass those targeted by their ire, and has claimed responsibility for dozens of bomb threats and “swatting” incidents, where police are tricked into visiting potentially deadly force on the target’s address.

At issue is a site called the “Doxbin,” which hosts the names, addresses, phone number and often known IP addresses, Social Security numbers, dates of birth and other sensitive information on hundreds of people — and in some cases the personal information of the target’s friends and family.

A significant number of the 400+ entries on the Doxbin are for journalists (32 at last count, including Yours Truly), although the curators of Doxbin have targeted everyone from federal judges to executives at major corporations. In January 2019, the group behind Doxbin claimed responsibility for doxing and swatting a top Facebook executive.

At least two of the journalists listed on the Doxbin have been swatted in the past six months, including Pulitzer prize winning columnist Leonard G. Pitts Jr.

In some cases, as in the entries for reporters from CNN, Politico, ProPublica and Vox, no reason is mentioned for their inclusion. But in many others, the explanation seems connected to stories the journalist has published dealing with race or the anti-fascist (antifa) movement.

“Anti-white race/politics writer,” reads the note next to Pitts’ entry in the Doxbin.

Many of those listed on the site soon find themselves on the receiving end of extended threats and harassment. Carey Holzman, a computer technician who runs a Youtube channel on repairing and modding computers, was swatted in January, at about the same time his personal information showed up on the Doxbin.

More recently, his tormentors started calling his mobile phone at all hours of the night, threatening to hire a hit man to kill him. They even promised to have drugs ordered off the Dark Web and sent to his home, as part of a plan to get him arrested for drug possession.

“They said they were going to send me three grams of cocaine,” Holzman told KrebsOnSecurity.

Sure enough, earlier this month a small vial of white powder arrived via the U.S. Postal Service. Holzman said he didn’t open the vial, but instead handed it over to the local police for testing. Continue reading →


22
Jul 19

What You Should Know About the Equifax Data Breach Settlement

Big-three credit bureau Equifax has reportedly agreed to pay at least $650 million to settle lawsuits stemming from a 2017 breach that let intruders steal personal and financial data on roughly 148 million Americans. Here’s a brief primer that attempts to break down what this settlement means for you, and what it says about the value of your identity.

Q: What happened?

A: If the terms of the settlement are approved by a court, the Federal Trade Commission says Equifax will be required to spend up to $425 million helping consumers who can demonstrate they were financially harmed by the breach. The company also will provide up to 10 years of free credit monitoring to those who had their data exposed.

Q: What about the rest of the money in the settlement?

A: An as-yet undisclosed amount will go to pay lawyers fees for the plaintiffs.

Q: $650 million seems like a lot. Is that some kind of record?

A: If not, it’s pretty close. The New York Times reported earlier today that it was thought to be the largest settlement ever paid by a company over a data breach, but that statement doesn’t appear anywhere in their current story.

Q: Hang on…148 million affected consumers…out of that $425 million pot that comes to just $2.87 per victim, right?

A: That’s one way of looking at it. But as always, the devil is in the details. You won’t see a penny or any other benefit unless you do something about it, and how much you end up costing the company (within certain limits) is up to you.

The Times reports that the proposed settlement assumes that only around seven million people will sign up for their credit monitoring offers. “If more do, Equifax’s costs for providing it could rise meaningfully,” the story observes.

Q: Okay. What can I do?

A: You can visit www.equifaxbreachsettlement.com, although none of this will be official or on offer until a court approves the settlement.

Q: Uh, that doesn’t look like Equifax’s site…

A: Good eyes! It’s not. It’s run by a third party. But we should probably just be grateful for that; given Equifax’s total dumpster fire of a public response to the breach, the company has shown itself incapable of operating (let alone securing) a properly functioning Web site.

Q: What can I get out of this?

A: In a nutshell, affected consumers are eligible to apply for one or more remedies, including:

Free credit monitoring: At least three years of credit monitoring via all three major bureaus simultaneously, including Equifax, Experian and Trans Union. The settlement also envisions up to six more years of single bureau monitoring through Experian. Or, if you don’t want to take advantage of the credit monitoring offers, you can opt instead for a $125 cash payment. You can’t get both.

Reimbursement: …For the time you spent remedying identity theft or misuse of your personal information caused by the breach, or purchasing credit monitoring or credit reports. This is capped at 20 total hours at $25 per hour ($500). Total cash reimbursement payment will not exceed $20,000 per consumer.

Help with ongoing identity theft issues: Up to seven years of “free assisted identity restoration services.” Again, the existing breach settlement page is light on specifics there.

Q: Does this cover my kids/dependents, too?

A: The FTC says if you were a minor in May 2017 (when Equifax first learned of the breach), you are eligible for a total of 18 years of free credit monitoring.

Q: How do I take advantage of any of these?

A: You can’t yet. The settlement has to be approved first. The settlement Web site says to check back again later. In addition to checking the breach settlement site periodically, consumers can sign up with the FTC to receive email updates about this settlement.

Update: The eligibility site is now active, at this link.

The settlement site said consumers also can call 1-833-759-2982 for more information. Press #2 on your phone’s keypad if you want to skip the 1-minute preamble and get straight into the queue to speak with a real person.

KrebsOnSecurity dialed in to ask for more details on the “free assisted identity restoration services,” and the person who took my call said they’d need to have some basic information about me in order to proceed. He said they needed my name, address and phone number to proceed. I gave him a number and a name, and after checking with someone he came back and said the restoration services would be offered by Equifax, but confirmed that affected consumers would still have to apply for it.

He added that the Equifaxbreachsettlement.com site will soon include a feature that lets visitors check to see if they’re eligible, but also confirmed that just checking eligibility won’t entitle one to any of the above benefits: Consumers will still need to file a claim through the site (when it’s available to do so). Continue reading →