Krebs on Security

Visa Delays Chip Deadline for Pumps To 2020

December 2, 2016

Visa this week delayed by three years a deadline for fuel station owners to install payment terminals at the pump that are capable of handling more secure chip-based cards. Experts say the new deadline — extended from 2017 — comes amid a huge spike in fuel pump skimming, and means fraudsters will have another three years to fleece banks and their customers by installing card-skimming devices at the pump.

Until this week, fuel station owners in the United States had until October 1, 2017 to install chip-capable readers at their pumps. Under previous Visa rules, station owners that didn’t have chip-ready readers in place by then would have been on the hook to absorb 100 percent of the costs of fraud associated with transactions in which the customer presented a chip-based card yet was not asked or able to dip the chip (currently, card-issuing banks eat most of the fraud costs from fuel skimming). The chip card technology standard, also known as EMV (short for Europay, MasterCard and Visa) makes credit and debit cards far more expensive and difficult for thieves to clone.

This week, however, Visa said fuel station owners would have until October 1, 2020 to meet the liability shift deadline.

A Bluetooth-based pump card skimmer found inside of a Food N Things pump in Arizona in April 2016.

“The fuel segment has its own unique challenges, which we recognized when we first set the chip activation date for automated fuel dispensers/pumps (AFDs) two years after regular in-store locations,” Visa said in a statement explaining its decision. “We knew that the AFD segment would need more time to upgrade to chip because of the complicated infrastructure and specialized technology required for fuel pumps. For instance, in some cases, older pumps may need to be replaced before adding chip readers, requiring specialized vendors and breaking into concrete. Furthermore, five years after announcing our liability shift, there are still issues with a sufficient supply of regulatory-compliant EMV hardware and software to enable most upgrades by 2017.”

Visa said fuel pump skimming accounts for just 1.3 percent of total U.S. payment card fraud.

“During this interim period, Visa will monitor AFD fraud trends closely and work with merchants, acquirers and issuers to help mitigate any potential counterfeit fraud exposure at AFDs,” Visa said.

Avivah Litan, a fraud analyst with Gartner Inc., said the deadline shift wasn’t unexpected given how many U.S. fuel stations are behind on costly updates, noting that in some cases it can cost more than $10,000 per pump to accommodate chip card readers. The National Association of Convenience Stores estimates that station operators will spend approximately $30,000 per store to accommodate chip readers, and that the total cost to the fuel industry could exceed $4 billion.

“Some of them you can just replace the payment module inside the pump, but the older pumps will need to be completely removed and replaced,” Litan said. “Gas stations and their unattended pumps have always been an easy target for thieves. The fraud usually migrates to the point of least resistance, and we’re seeing now the fraudsters really moving to targeting unattended stations that haven’t been upgraded.” Continue reading →

‘Avalanche’ Global Fraud Ring Dismantled

December 1, 2016

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In what’s being billed as an unprecedented global law enforcement response to cybercrime, federal investigators in the United States, United Kingdom and Europe today say they’ve dismantled a sprawling cybercrime machine known as “Avalanche” — a distributed, cloud-hosting network that for the past seven years has been rented out to fraudsters for use in launching countless malware and phishing attacks.

The global distribution of servers used in the Avalanche crime machine. Source: Shadowserver.org

According to Europol, the action was the result of a four-year joint investigation between Europol, Eurojust the FBI and authorities in the U.K. and Germany that culminated on Nov. 30, 2016 with the arrest of five individuals, the seizure of 39 Web servers, and the sidelining of more than 830,000 web domains used in the scheme.

Built as a criminal cloud-hosting environment that was rented out to scammers, spammers other ne’er-do-wells, Avalanche has been a major source of cybercrime for years. In 2009, when investigators say the fraud network first opened for business, Avalanche was responsible for funneling roughly two-thirds of all phishing attacks aimed at stealing usernames and passwords for bank and e-commerce sites. By 2011, Avalanche was being heavily used by crooks to deploy banking Trojans.

The U.K.’s National Crime Agency (NCA), says the more recent Avalanche fraud network comprised up to 600 servers worldwide and was used to host as many as 800,000 web domains at a time. Continue reading →

New Mirai Worm Knocks 900K Germans Offline

November 30, 2016

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More than 900,000 customers of German ISP Deutsche Telekom (DT) were knocked offline this week after their Internet routers got infected by a new variant of a computer worm known as Mirai. The malware wriggled inside the routers via a newly discovered vulnerability in a feature that allows ISPs to remotely upgrade the firmware on the devices. But the new Mirai malware turns that feature off once it infests a device, complicating DT’s cleanup and restoration efforts.

Security experts say the multi-day outage is a sign of things to come as cyber criminals continue to aggressively scour the Internet of Things (IoT) for vulnerable and poorly-secured routers, Internet-connected cameras and digital video recorders (DVRs). Once enslaved, the IoT devices can be used and rented out for a variety of purposes — from conducting massive denial-of-service attacks capable of knocking large Web sites offline to helping cybercriminals stay anonymous online.

An internet-wide scan conducted by Shodan.io suggests there may be as many as five million devices vulnerable to the exploit that caused problems for so many DT customers this week. Image: Badcyber.com

This new variant of Mirai builds on malware source code released at the end of September. That leak came a little more a week after a botnet based on Mirai was used in a record-sized attack that caused KrebsOnSecurity to go offline for several days. Since then, dozens of new Mirai botnets have emerged, all competing for a finite pool of vulnerable IoT systems that can be infected.

Until this week, all Mirai botnets scanned for the same 60+ factory default usernames and passwords used by millions of IoT devices. But the criminals behind one of the larger Mirai botnets apparently decided to add a new weapon to their arsenal, incorporating exploit code published earlier this month for a security flaw in specific routers made by Zyxel and Speedport.

These companies act as original equipment manufacturers (OEMs) that specialize in building DSL modems that ISPs then ship to customers. The vulnerability exists in communications protocols supported by the devices that ISPs can use to remotely manage all of the customer-premises routers on their network.

According to BadCyber.com, which first blogged about the emergence of the new Mirai variant, part of the problem is that Deutsche Telekom does not appear to have followed the best practice of blocking the rest of the world from remotely managing these devices as well.

“The malware itself is really friendly as it closes the vulnerability once the router is infected,” BadCyber noted. “It performs [a] command which should make the device ‘secure,’ until next reboot. The first one closes port 7547 and the second one kills the telnet service, making it really hard for the ISP to update the device remotely.” [For the Geek Factor 5 readership out there, the flaw stems from the way these routers parse incoming traffic destined for Port 7547 using communications protocols known as TR-069].

DT has been urging customers who are having trouble to briefly disconnect and then reconnect the routers, a process which wipes the malware from the device’s memory. The devices should then be able to receive a new update from DT that plugs the vulnerability.

That is, unless the new Mirai strain gets to them first. Johannes Ullrich, dean of security research at The SANS Technology Institute, said this version of Mirai aggressively scans the Internet for new victims, and that SANS’s research has shown vulnerable devices are compromised by the new Mirai variant within five to ten minutes of being plugged into the Internet.

Ullrich said the scanning activity conducted by the new Mirai variant is so aggressive that it can create hangups and crashes even for routers that are are not vulnerable to this exploit.

“Some of these devices went down because of the sheer number of incoming connections” from the new Mirai variant, Ullrich said. “They were listening on Port 7547 but were not vulnerable to this exploit and were still overloaded with the number of connections to that port.”

A Deutsche Telekom Speedport DSL modem.

FEEDING THE CRIME MACHINE

Allison Nixon, director of security research at Flashpoint, said this latest Mirai variant appears to be an attempt to feed fresh victims into one of the larger and more established Mirai botnets out there today.

Nixon said she suspects this particular botnet is being rented out in discrete chunks to other cybercriminals. Her suspicions are based in part on the fact that the malware phones home to a range of some 256 Internet addresses that for months someone has purchased for the sole purpose of hosting nothing but servers used to control multiple Mirai botnets.

“The malware points to some [Internet addresses] that are in ranges which were purchased for the express purpose of running Mirai,” Nixon said. “That range does nothing but run Mirai control servers on it, and they’ve been doing it for a while now. I would say this is probably part of a commercial service because purchasing this much infrastructure is not cheap. And you generally don’t see people doing this for kicks, you see them doing it for money.” Continue reading →

San Francisco Rail System Hacker Hacked

November 29, 2016

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The San Francisco Municipal Transportation Agency (SFMTA) was hit with a ransomware attack on Friday, causing fare station terminals to carry the message, “You are Hacked. ALL Data Encrypted.” Turns out, the miscreant behind this extortion attempt got hacked himself this past weekend, revealing details about other victims as well as tantalizing clues about his identity and location.

A copy of the ransom message left behind by the “Mamba” ransomware.

On Friday, The San Francisco Examiner reported that riders of SFMTA’s Municipal Rail or “Muni” system were greeted with handmade “Out of Service” and “Metro Free” signs on station ticket machines. The computer terminals at all Muni locations carried the “hacked” message: “Contact for key (cryptom27@yandex.com),” the message read.

The hacker in control of that email account said he had compromised thousands of computers at the SFMTA, scrambling the files on those systems with strong encryption. The files encrypted by his ransomware, he said, could only be decrypted with a special digital key, and that key would cost 100 Bitcoins, or approximately USD $73,000.

On Monday, KrebsOnSecurity was contacted by a security researcher who said he hacked this very same cryptom27@yandex.com inbox after reading a news article about the SFMTA incident. The researcher, who has asked to remain anonymous, said he compromised the extortionist’s inbox by guessing the answer to his secret question, which then allowed him to reset the attacker’s email password. A screen shot of the user profile page for cryptom27@yandex.com shows that it was tied to a backup email address, cryptom2016@yandex.com, which also was protected by the same secret question and answer.

Copies of messages shared with this author from those inboxes indicate that on Friday evening, Nov. 25, the attacker sent a message to SFMTA infrastructure manager Sean Cunningham with the following demand (the entirety of which has been trimmed for space reasons), signed with the pseudonym “Andy Saolis.”

“if You are Responsible in MUNI-RAILWAY !

All Your Computer’s/Server’s in MUNI-RAILWAY Domain Encrypted By AES 2048Bit!

We have 2000 Decryption Key !

Send 100BTC to My Bitcoin Wallet , then We Send you Decryption key For Your All Server’s HDD!!”

One hundred Bitcoins may seem like a lot, but it’s apparently not far from a usual payday for this attacker. On Nov. 20, hacked emails show that he successfully extorted 63 bitcoins (~$45,000) from a U.S.-based manufacturing firm.

The attacker appears to be in the habit of switching Bitcoin wallets randomly every few days or weeks. “For security reasons” he explained to some victims who took several days to decide whether to pay the ransom they’d been demanded. A review of more than a dozen Bitcoin wallets this criminal has used since August indicates that he has successfully extorted at least $140,000 in Bitcoin from victim organizations.

That is almost certainly a conservative estimate of his overall earnings these past few months: My source said he was unable to hack another Yandex inbox used by this attacker between August and October 2016, “w889901665@yandex.com,” and that this email address is tied to many search results for tech help forum postings from people victimized by a strain of ransomware known as Mamba and HDD Cryptor.

Copies of messages shared with this author answer many questions raised by news media coverage of this attack, such as whether the SFMTA was targeted. In short: No. Here’s why.

Messages sent to the attacker’s cryptom2016@yandex.com account show a financial relationship with at least two different hosting providers. The credentials needed to manage one of those servers were also included in the attacker’s inbox in plain text, and my source shared multiple files from that server.

KrebsOnSecurity sought assistance from several security experts in making sense of the data shared by my source. Alex Holden, chief information security officer at Hold Security Inc, said the attack server appears to have been used as a staging ground to compromise new systems, and was equipped with several open-source tools to help find and infect new victims.

“It appears our attacker has been using a number of tools which enabled the scanning of large portions of the Internet and several specific targets for vulnerabilities,” Holden said. “The most common vulnerability used ‘weblogic unserialize exploit’ and especially targeted Oracle Corp. server products, including Primavera project portfolio management software.”

According to a review of email messages from the Cryptom27 accounts shared by my source, the attacker routinely offered to help victims secure their systems from other hackers for a small number of extra Bitcoins. In one case, a victim that had just forked over a 20 Bitcoin ransom seemed all too eager to pay more for tips on how to plug the security holes that got him hacked. In return, the hacker pasted a link to a Web server, and urged the victim to install a critical security patch for the company’s Java applications.

“Read this and install patch before you connect your server to internet again,” the attacker wrote, linking to this advisory that Oracle issued for a security hole that it plugged in November 2015.

In many cases, the extortionist told victims their data would be gone forever if they didn’t pay the ransom in 48 hours or less. In other instances, he threatens to increase the ransom demand with each passing day. Continue reading →

ATM Insert Skimmers: A Closer Look

November 27, 2016

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KrebsOnSecurity has featured multiple stories about the threat from ATM fraud devices known as “insert skimmers,” wafer-thin data theft tools made to be completely hidden inside of a cash’s machine’s card acceptance slot. For a closer look at how stealthy insert skimmers can be, it helps to see videos of these things being installed and removed. Here’s a look at promotional sales videos produced by two different ATM insert skimmer peddlers.

Traditional ATM skimmers are fraud devices made to be placed over top of the cash machine’s card acceptance slot, usually secured to the ATM with glue or double-sided tape. Increasingly, however, more financial institutions are turning to technologies that can detect when something has been affixed to the ATM. As a result, more fraudsters are selling and using insert skimming devices — which are completely hidden from view once inserted into an ATM.

The fraudster demonstrating his insert skimmer in the short video above spends the first half of the demo showing how a regular bank card can freely move in and out of the card acceptance slot while the insert skimmer is nestled inside. Toward the end of the video, the scammer retrieves the insert skimmer using what appears to be a rather crude, handmade tool thin enough to fit inside a wallet.

A sales video produced by yet another miscreant in the cybercrime underground shows an insert skimmer being installed and removed from a motorized card acceptance slot that has been fully removed from an ATM so that the fraud device can be seen even while it is inserted.

In a typical setup, insert skimmers capture payment card data from the magnetic stripe on the backs of cards inserted into a hacked ATM, while a pinhole spy camera hidden above or beside the PIN pad records time-stamped video of cardholders entering their PINs. The data allows thieves to fabricate new cards and use PINs to withdraw cash from victim accounts.

Covering the PIN pad with your hand blocks any hidden camera from capturing your PIN — and hidden cameras are used on the vast majority of the more than three dozen ATM skimming incidents that I’ve covered here. Shockingly, few people bother to take this simple and effective step, as detailed in this skimmer tale from 2012, wherein I obtained hours worth of video seized from two ATM skimming operations and saw customer after customer walk up, insert their cards and punch in their digits — all in the clear.

Once you understand how stealthy these ATM fraud devices are, it’s difficult to use a cash machine without wondering whether the thing is already hacked. The truth is most of us probably have a better chance of getting physically mugged after withdrawing cash than encountering a skimmer in real life. However, here are a few steps we can all take to minimize the success of skimmer gangs.

-Cover the PIN pad while you enter your PIN.

-Keep your wits about you when you’re at the ATM, and avoid dodgy-looking and standalone cash machines in low-lit areas, if possible.

-Stick to ATMs that are physically installed in a bank. Stand-alone ATMs are usually easier for thieves to hack into.

-Be especially vigilant when withdrawing cash on the weekends; thieves tend to install skimming devices on a weekend — when they know the bank won’t be open again for more than 24 hours.

-Keep a close eye on your bank statements, and dispute any unauthorized charges or withdrawals immediately.

If you liked this piece and want to learn more about skimming devices, check out my series All About Skimmers.

DoD Opens .Mil to Legal Hacking, Within Limits

November 23, 2016

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Hackers of all stripes looking to test their mettle can now legally hone their cyber skills, tools and weaponry against any Web property operated by the U.S. Department of Defense (DoD), according to a new military-wide policy for reporting and fixing security vulnerabilities.

hackthearmy

Security researchers are often reluctant to report programming flaws or security holes they’ve stumbled upon for fear that the vulnerable organization might instead decide to shoot the messenger and pursue hacking charges.

But on Nov. 21, the DoD sought to clear up any ambiguity on that front for the military’s substantial online presence, creating both a centralized place to report cybersecurity flaws across the dot-mil space as well as a legal safe harbor (and the prospect of public recognition) for researchers who abide by a few ground rules.

The DoD said it would “deal in good faith” with researchers “who discover, test, and submit vulnerabilities or indicators of vulnerabilities in accordance with these guidelines:

“Your activities are limited exclusively to –
(1) Testing to detect a vulnerability or identify an indicator related to a vulnerability; or
(2) Sharing with, or receiving from, DoD information about a vulnerability or an indicator related to a vulnerability.”

The Department of Defense also issued the following ten commandments for demonstrating compliance with its policy:

You do no harm and do not exploit any vulnerability beyond the minimal amount of testing required to prove that a vulnerability exists or to identify an indicator related to a vulnerability.
You avoid intentionally accessing the content of any communications, data, or information transiting or stored on DoD information system(s) – except to the extent that the information is directly related to a vulnerability and the access is necessary to prove that the vulnerability exists.
You do not exfiltrate any data under any circumstances.
You do not intentionally compromise the privacy or safety of DoD personnel (e.g. civilian employees or military members), or any third parties.
You do not intentionally compromise the intellectual property or other commercial or financial interests of any DoD personnel or entities, or any third parties.
You do not publicly disclose any details of the vulnerability, indicator of vulnerability, or the content of information rendered available by a vulnerability, except upon receiving explicit written authorization from DoD.
You do not conduct denial of service testing.
You do not conduct social engineering, including spear phishing, of DoD personnel or contractors.
You do not submit a high-volume of low-quality reports.
If at any point you are uncertain whether to continue testing, please engage with our team.

In return, the DoD said it commits to acknowledging receipt of a report within three business days, and that it will work to confirm the existence of the vulnerability to the researcher and keep the researcher informed of any remediation underway. There are some restrictions, however. For example, researchers who report vulnerabilities will be expected to refrain from publicly disclosing their findings unless and until the DoD provides written consent that it’s okay to do so.

“We want researchers to be recognized publicly for their contributions, if that is the researcher’s desire,” the DoD stated. “We will seek to allow researchers to be publicly recognized whenever possible. However, public disclosure of vulnerabilities will only be authorized at the express written consent of DoD.”

The DoD said if it couldn’t immediately fix or publicly acknowledge reported vulnerabilities, it might be because doing so could have life-or-death consequences for service members.

“Many DoD technologies are deployed in combat zones and, to varying degrees, support ongoing military operations; the proper functioning of DoD systems and applications can have a life-or-death impact on Service members and international allies and partners of the United States,” the agency observed. “DoD must take extra care while investigating the impact of vulnerabilities and providing a fix, so we ask your patience during this period.”

HACK THE ARMY

The Defense Department made the announcement via Hackerone.com, a company that helps organizations build and manage vulnerability reporting policies. HackerOne also helps customers build out “bug bounty” programs that remunerate and recognize researchers who report security flaws.

HackerOne currently is coordinating an upcoming bug bounty program called “Hack the Army,” in which some 500 qualifying contestants can earn cash rewards for finding and reporting cybersecurity weaknesses in the Army’s various online properties (incidentally, Hack the Army runs from Nov. 30 through Dec. 21, 2016, and interested/eligible hackers have until Nov. 28, at 17:00 EST to apply for a shot at one of those 500 spots). Continue reading →

Akamai on the Record KrebsOnSecurity Attack

November 22, 2016

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Internet infrastructure giant Akamai last week released a special State of the Internet report. Normally, the quarterly accounting of noteworthy changes in distributed denial-of-service (DDoS) attacks doesn’t delve into attacks on specific customers. But this latest Akamai report makes an exception in describing in great detail the record-sized attack against KrebsOnSecurity.com in September, the largest such assault it has ever mitigated.

“The attacks made international headlines and were also covered in depth by Brian Krebs himself,” Akamai said in its report, explaining one reason for the exception. “The same data we’ve shared here was made available to Krebs for his own reporting and we received permission to name him and his site in this report. Brian Krebs is a security blogger and reporter who does in-depth research and analysis of cybercrime throughout the world, with a recent emphasis on DDoS. His reporting exposed a stressor site called vDOS and the security firm BackConnect Inc., which made him the target of a series of large DDoS attacks starting September 15, 2016.”

A visual depiction of the increasing size and frequency of DDoS attacks against KrebsOnSecurity.com, between 2012 and 2016. Source: Akamai.

Akamai said so-called “booter” or “stresser” DDoS-for-hire services that sell attacks capable of knocking Web sites offline continue to account for a large portion of the attack traffic in mega attacks. According to Akamai, most of the traffic from those mega attacks in Q3 2016 were thanks to Mirai — the now open-source malware family that was used to coordinate the attack on this site in September and a separate assault against infrastructure provider Dyn in October.

Akamai said the attack on Sept. 20 was launched by just 24,000 systems infected with Mirai, mostly hacked Internet of Things (IoT) devices such as digital video recorders and security cameras.

“The first quarter of 2016 marked a high point in the number of attacks peaking at more than 100 Gbps,” Akamai stated in its report. “This trend was matched in Q3 2016, with another 19 mega attacks. It’s interesting that while the overall number of attacks fell by 8% quarter over quarter, the number of large attacks, as well as the size of the biggest attacks, grew significantly.”

As detailed here in several previous posts, KrebsOnSecurity.com was a pro-bono customer of Akamai, beginning in August 2012 with Prolexic before Akamai acquired them. Akamai mentions this as well in explaining its decision to terminate our pro-bono arrangement. KrebsOnSecurity is now behind Google‘s Project Shield, a free program run by Google to help protect journalists and dissidents from online censorship.

“Almost as soon as the site was on the Prolexic network, it was hit by a trio of attacks based on the Dirt Jumper DDoS tookit,” Akamai wrote of this site. “Those attacks marked the start of hundreds of attacks that were mitigated on the routed platform.”

In total, Akamai found, this site received 269 attacks in the little more than four years it was on the Prolexic/Akamai network. Continue reading →

Adobe Fined $1M in Multistate Suit Over 2013 Breach; No Jail for Spamhaus Attacker

November 17, 2016

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Adobe will pay just $1 million to settle a lawsuit filed by 15 state attorneys general over its huge 2013 data breach that exposed payment records on approximately 38 million people. In other news, the 39-year-old Dutchman responsible for coordinating an epic, weeks-long distributed denial-of-service attack against anti-spam provider Spamhaus in 2013 will avoid any jail time for his crimes thanks to a court ruling in Amsterdam this week.

On Oct. 3, 2013, KrebsOnSecurity broke the story that Adobe had just suffered a breach in which hackers siphoned usernames, passwords and payment card data on 38 million customers. The intruders also made off with digital truckloads of source code for some of Adobe’s most valuable software properties — including Adobe Acrobat and Reader, Photoshop and ColdFusion.

On Monday, Nov. 11, North Carolina Attorney General Roy Cooper joined his counterparts in 14 other states in announcing a $1 million settlement with Adobe over the 2013 breach. According to Cooper, the hacked Adobe servers contained the personal information of approximately 552,000 residents of the participating 15 states. That works out to about $1.80 per victim across all 15 states.

A posting on anonnews.org that was later deleted.

According to a statement by Massachusetts Attorney General Maura Healey, “an investigation by the states revealed that in September 2013, Adobe received an alert that the hard drive for one of its application servers was nearing capacity. In responding to the alert, Adobe learned that an unauthorized attempt was being made to decrypt customer payment card numbers maintained on the server.”

“Adobe discovered that one or more unauthorized intruder(s) had compromised a public-facing web server and used it to access other servers on Adobe’s network, including areas where Adobe stored consumer data,” the statement from Healey’s office reads. “The intruder(s) ultimately stole consumer data from Adobe’s servers, including encrypted payment card numbers and expiration dates, names, addresses, telephone numbers, e-mail addresses, usernames (Adobe IDs), and passwords associated with the usernames.”

When I think of the Adobe breach I’m reminded of that scene out of the 1982 Spielberg horror classic “Poltergeist,” when Craig T. Nelson as “Steve Freeling” seizes the horrified neighborhood developer Mr. Teague by his coat collars and screams, “You son of a bitch! You moved the cemetery but you left the bodies, didn’t ya?! You left left the bodies and you only moved the headstones!! Why?!?!?! Whyyyyyyeeeiee??!?!?”

A scene from Poltergeist. Image: IMDB.

Likewise, Adobe had various storefronts for its various software products, but it eventually centralized many store operations. The main trouble was the company left copies of their customer records in multiple internal network locations that were no longer as protected as Adobe’s globally centralized storefront.

North Carolina’s Cooper said in a statement on the settlement that businesses and government must do more to protect consumer data. But if this settlement was meant as a deterrent to dissuade other companies from hosting customer payment data on public-facing Web servers, the fine might be more effective if it were more commensurate with the company’s size and the number of customers impacted.

As Digital Trends notes, such a breach under the new General Data Protection Regulation going into effect in 2018, would be quite a bit more costly. “Adobe could face fines of up to four percent of its annual global turnover,” wrote Jonathan Keane for DT. “Last we checked, Adobe’s previous quarterly earnings were $1.4 billion.”

Keane also notes that Adobe had previously settled a similar case in California where it settled for an undisclosed amount and $1.1 million in legal fees.

One interesting nugget tucked in at the end of the statement from the North Carolina AG’s office is this bit: More than 3,700 breaches impacting nearly 10 million North Carolinians have been reported since the state’s data breach notification law took effect in 2005, including 677 breaches reported so far in 2016. According to the United States Census Bureau, there were just over 10 million residents in North Carolina as of July 2015. Continue reading →

Chinese IoT Firm Siphoned Text Messages, Call Records

November 16, 2016

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A Chinese technology firm has been siphoning text messages and call records from cheap Android-based mobile smart phones and secretly sending the data to servers in China, researchers revealed this week. The revelations came the same day the White House and the U.S. Department of Homeland Security issued sweeping guidelines aimed at building security into Internet-connected devices, and just hours before a key congressional panel sought recommendations from industry in regulating basic security standards for so-called “Internet of Things” (IoT) devices.

At the center of the spyware controversy is software made by Shanghai ADUPS Technology, a Chinese firm whose product touts the ability to wirelessly update software installed on mobile and and IoT devices. The ADUPS technology is typically bundled with smart phones made by dozens of global wireless firms including ZTE, BLU and Huawei, and sold at popular consumer destinations like Amazon and BestBuy. Often retailing for between $50 and $100, the sleek and powerful devices sell so cheaply because they also require the user to accept on-screen advertisements.

An About Us page at ADUPS’s Web site explains the company’s foothold in the IoT market.

According to research released this week, the low up-front cost of these smart phones may be subsidized not just by ads but by also by the theft of private information stolen from users. Researchers at Fairfax, Va.-based security firm Kryptowire say the ADUPS software gives the company near-total control over the devices that it runs on, and that they have proof ADUPS has abused that control to siphon personal data from countless consumers.

Kryptowire researchers say they stumbled upon ADUPS’s spyware capabilities by accident after purchasing a $59 BLU R1 HD smart phone from Amazon.com for use during international travel. Prying apart the phone and the ADUPS software, they discovered that all call records and text messages to and from the device were being digitally copied, encrypted and secretly forwarded to a server in Shanghai, China every 72 hours.

They also learned that ADUPS’s product was able to mine user text messages for specific strings of text, as well as install and remove any software from host devices.

“This behavior cannot be detected by mobile anti-virus tools because they assume that software that ships with the device is not malware and that it is white-listed,” Kryptowire wrote in an advisory published Tuesday. “We were able to capture, decrypt, and trace the data on the network as they were sent to multiple server locations that are located in Shanghai, China.”

In a statement posted to its Web site, ADUPS said it collects “model information, device status, application information, bin/xbin information and summary information from phones and messages,” and that it has done so “in response to user demand to screen out junk texts and calls from advertisers.”

ADUPS further claims that the functionality was added in June 2016 to some Blu Product Inc. devices, and that it has since shipped an update through its firmware updating software to disable the spying functionality on Blu phones.

But Azzedine Benameur, director of research at Kryptowire, said ADUPS’s software — deeply embedded alongside the operating system on these mobile devices — gives it full ability to re-enable the spyware capabilities at any time. He says ADUPS’s public response to their research raises more questions than it answers.

“They do not provide how many devices were affected and how the data were used,” Benameur said. “Also, they don’t mention who had access to that data, including third parties and the Chinese government. Also, there might be other [manufacturers] and device models affected that ADUPS does not mention.”

ADUPS claims on its Web site to have worldwide presence with more than 700 million active users, and that its firmware is integrated into “more than 400 leading mobile operators, semiconductor vendors and device manufacturers spanning from wearable and mobile devices to cars and televisions.”

“This is just one random device of theirs that we looked at,” Benameur said. “For a company that claims to provide over-the-air updates for 700 million devices, including cars and millions of IoT devices…this is really scary and unacceptable behavior.”

ADUPS’s offer to business partners, circa January 2015.

ADUPS’s current site promises the company’s partners “big data analytics” and higher profit for partners. Earlier versions of the same page from 2015 and cached at the Internet Archive promise partners a slightly less euphemistic menu of services, from an “app push service,” and “device data mining” to “unique package checking” and “mobile advertising.” Interestingly, this story from January 2015 documents how ADUPS’s software has been used to install unwanted apps on customer mobile devices.

As for the Blu R1 HD phone? Benameur said it would be nice if it came with a disclosure that owners can expect zero privacy or control while using it. Aside from that? “At $59, it’s a steal,” Benameur said. “Minus the spyware, it’s a great phone.” Continue reading →

Russian ‘Dukes’ of Hackers Pounce on Trump Win

November 10, 2016

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Less than six hours after Donald Trump became the presumptive president-elect of the United States, a Russian hacker gang perhaps best known for breaking into computer networks at the Democratic National Committee launched a volley of targeted phishing campaigns against American political think-tanks and non-government organizations (NGOs).

One of the phishing emails in the latest political espionage attack launched by The Dukes. Source: Volexity.

That’s according to a new report from Washington, D.C.-based cyber incident response firm Volexity. The firm’s researchers say they’ve been closely monitoring the activities of an well-established Russian malware development gang known variously as Cozy Bear, APT29, and The Dukes.

Hacking attacks launched by The Dukes were thought to be connected to intrusions at the Democratic National Committee (DNC), as well as cyber break-ins at multiple high-profile United States Government organizations, Volexity reports in a blog post published Thursday morning.

Last month, the Obama administration publicly acknowledged for the first time that it believed that the Russian government was responsible for stealing and disclosing emails from the DNC and a range of other institutions and prominent individuals, most recently Hillary Clinton’s campaign chairman, John D. Podesta. The emails were posted on WikiLeaks and other sites.

Volexity CEO Steven Adair said The Dukes have launched at least five sorties of email-based malware phishing attacks since Trump’s acceptance speech, and that the malware campaigns are ongoing.

“Two of the attacks purported to be messages forwarded on from the Clinton Foundation giving insight and perhaps a postmortem analysis into the elections,” Adair wrote.”Two of the other attacks purported to be eFax links or documents pertaining to the election’s outcome being revised or rigged. The last attack claimed to be a link to a PDF download on “Why American Elections Are Flawed.”

According to Volexity, in July 2015 the Dukes started heavily targeting think tanks and NGOs.

“This represented a fairly significant shift in the group’s previous operations and one that continued in the lead up to and immediately after the 2016 United States Presidential election,” Adair wrote.

Prior to the election, The Dukes were active on August 10, 2016 and on August 25, 2016, launching several waves of highly targeted spear phishing attacks against several U.S.-based think tanks and NGOs.

“These spear phishing messages were spoofed and made to appear to have been sent from real individuals at well-known think tanks in the United States and Europe,” Adair wrote. “These August waves of attacks purported to be from individuals at Transparency International, the Center for a New American Security (CNAS), the International Institute for Strategic Studies (IISS), Eurasia Group, and the Council on Foreign Relations (CFR).”

Adair said the more typical attacks from The Dukes come in the form of slightly less-targeted email blasts — often to just a few dozen recipients at a time — that include booby-trapped Microsoft Office documents.

When launched, the tainted Excel or Word document opens an actual file with real content, but it also prompts the target to enable “macros” — a powerful functionality built into Office documents that hackers can use to automatically download and run malicious code on a Windows system.

The Dukes prefer to launch the attacks using hacked servers and email inboxes belonging to unsuspecting, trusted workers at NGOs and U.S. government systems, Adair explained. Most often, he said, the intruders will repurpose a legitimate document found in one of these hacked inboxes and inject a sophisticated backdoor “trojan horse program.”

If the phishing target opens the document and has macros enabled in Microsoft Office — or allows macros to be run after the decoy document is shown — a malicious script embedded in the macro installs on the target’s system a powerful foothold for the attacker. Continue reading →

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