Krebs on Security

A Dramatic Rise in ATM Skimming Attacks

April 29, 2016

Skimming attacks on ATMs increased at an alarming rate last year for both American and European banks and their customers, according to recent stats collected by fraud trackers. The trend appears to be continuing into 2016, with outbreaks of skimming activity visiting a much broader swath of the United States than in years past.

Two network cable card skimming devices, as found attached to this ATM.

In a series of recent alerts, the FICO Card Alert Service warned of large and sudden spikes in ATM skimming attacks. On April 8, FICO noted that its fraud-tracking service recorded a 546 percent increase in ATM skimming attacks from 2014 to 2015.

“The number of ATM compromises in 2015 was the highest ever recorded by the FICO Card Alert Service, which monitors hundreds of thousands of ATMs in the US,” the company said. “Criminal activity was highest at non-bank ATMs, such as those in convenience stores, where 10 times as many machines were compromised as in 2014.”

While 2014 saw skimming attacks targeting mainly banks in big cities on the east and west coasts of the United States, last year’s skimming attacks were far more spread out across the country, the FICO report noted.

Earlier this year, I published a post about skimming attacks targeting non-bank ATMs using hidden cameras and skimming devices plugged into the ATM network cables to intercept customer card data. The skimmer pictured in that story was at a 7-Eleven convenience store.

Since that story ran I’ve heard from multiple banking industry sources who said they have seen a spike in ATM fraud targeting cash machines in 7-Elevens and other convenience stores, and that the commonality among the machines is that they are all operated by ATM giant Cardtronics (machines in 7-Eleven locations made up for 17.5 percent of Cardtronics’ revenue last year, according to this report at ATM Marketplace).

Some financial institutions are taking dramatic steps to head off skimming activity. Trailhead Credit Union in Portland, Ore., for example, has posted a notice to customers atop its Web site, stating:

“ALERT: Until further notice, we have turned off ATM capabilities at all 7-11 ATMs due to recent fraudulent activity. Please use our ATM locator for other locations. We are sorry for the inconvenience.”

Trailhead Credit Union has stopped allowing members to withdraw cash from 7-11 ATMs.

7-Eleven did not respond to requests for comment. Cardtronics said it wasn’t aware of any banks blocking withdrawals across the board at 7-11 stores or at Cardtronics machines.

“While Cardtronics is aware that a single financial institution [Xceed Financial Credit Union] temporarily restricted ATM access late in 2015, it soon thereafter restored full ATM access to its account holders,” the company said in a statement. “As the largest ATM services provider, Cardtronics has a long history of executing a layered security strategy and implementing innovative security enhancements at our ATMs. As criminals modify their attack, Cardtronics always has and always will aggressively respond, reactively and proactively, with innovation to address these instances.” Continue reading →

Dental Assn Mails Malware to Members

April 28, 2016

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The American Dental Association (ADA) says it may have inadvertently mailed malware-laced USB thumb drives to thousands of dental offices nationwide.

The problem first came to light in a post on the DSL Reports Security Forum. DSLR member “Mike” from Pittsburgh got curious about the integrity of a USB drive that the ADA mailed to members to share updated “dental procedure codes” — codes that dental offices use to track procedures for billing and insurance purposes.

“Oh wow the usually inept ADA just sent me new codes,” Mike wrote. “I bet some marketing genius had this wonderful idea instead of making it downloadable. I can’t wait to plug an unknown USB into my computer that has PHI/HIPAA on it…” [link added].

The ADA says some flash drives mailed to members contained malware. Image: Mike

Sure enough, Mike looked at the code inside one of the files on the flash drive and found it tries to open a Web page that has long been tied to malware distribution. The domain is used by crooks to infect visitors with malware that lets the attackers gain full control of the infected Windows computer. Continue reading →

All About Fraud: How Crooks Get the CVV

April 26, 2016

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A longtime reader recently asked: “How do online fraudsters get the 3-digit card verification value (CVV or CVV2) code printed on the back of customer cards if merchants are forbidden from storing this information? The answer: If not via phishing, probably by installing a Web-based keylogger at an online merchant so that all data that customers submit to the site is copied and sent to the attacker’s server.

Kenneth Labelle, a regional director at insurer Burns-Wilcox.com, wrote:

“So, I am trying to figure out how card not present transactions are possible after a breach due to the CVV. If the card information was stolen via the point-of-sale system then the hacker should not have access to the CVV because its not on the magnetic strip. So how in the world are they committing card not present fraud when they don’t have the CVV number? I don’t understand how that is possible with the CVV code being used in online transactions.”

First off, “dumps” — or credit and debit card accounts that are stolen from hacked point of sale systems via skimmers or malware on cash register systems — retail for about $20 apiece on average in the cybercrime underground. Each dump can be used to fabricate a new physical clone of the original card, and thieves typically use these counterfeits to buy goods from big box retailers that they can easily resell, or to extract cash at ATMs.

However, when cyber crooks wish to defraud online stores, they don’t use dumps. That’s mainly because online merchants typically require the CVV, criminal dumps sellers don’t bundle CVVs with their dumps.

Instead, online fraudsters turn to “CVV shops,” shadowy cybercrime stores that sell packages of cardholder data, including customer name, full card number, expiration, CVV2 and ZIP code. These CVV bundles are far cheaper than dumps — typically between $2-$5 apiece — in part because the are useful mainly just for online transactions, but probably also because overall they more complicated to “cash out” or make money from them.

Continue reading →

SpyEye Makers Get 24 Years in Prison

April 20, 2016

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Two hackers convicted of making and selling the infamous SpyEye botnet creation kit were sentenced in Georgia today to a combined 24 years in prison for helping to infect hundreds of thousands of computers with malware and stealing millions from unsuspecting victims.

The Justice Department alleges that 24-year-old Aleksander Panin was responsible for SpyEye. Image courtesy: RT.

Aleksander Panin developed and sold SpyEye. Image courtesy: RT.

Atlanta Judge Amy Totenberg handed down a sentence of nine years, six months for Aleksandr Andreevich Panin, a 27-year-old Russian national also known by the hacker aliases “Gribodemon” and “Harderman.”

Convicted of conspiracy to commit wire and bank fraud, Panin was the core developer and distributor of SpyEye, a botnet toolkit that made it easy for relatively unsophisticated cyber thieves to steal millions of dollars from victims.

Sentenced to 15 years in jail was Panin’s business partner — 27-year-old Hamza “Bx1” Bendelladj, an Algerian national who pleaded guilty in June 2015 to helping Panin develop and market the SpyEye kit. Bendelladj also admitting to running his own SpyEye botnet of hacked Windows computers, a crime machine that he used to harvest and steal 200,000 credit card numbers. By the government’s math (an assumed $500 loss per card) Bx1 was potentially responsible for $100 million in losses.

“It is difficult to over state the significance of this case, not only in terms of bringing two prolific computer hackers to justice, but also in disrupting and preventing immeasurable financial losses to individuals and the financial industry around the world,” said John Horn, U.S. Attorney for the Northern District of Georgia.

THE HAPPY HACKER

Bendelladj was arrested in Bangkok in January 2013 while in transit from Malaysia to Egypt. He quickly became known as the “happy hacker” after his arrest, in which he could be seen smiling broadly while in handcuffs and being paraded before the local news media.

Photo: Hamza “Bx1” Bendelladj, Bangkok Post

In its case against the pair of hackers, the government presented chat logs between Bendelladj and Panin and other hackers. The government says the chat logs reveal that although Bendelladj worked with Panin to fuel the rise of SpyEye by vouching for him on cybercrime forums such as “Darkode,” the two had an antagonistic relationship.

Their business partnership imploded after Bx1 announced that he was publicly releasing the source code for SpyEye.

“Indeed, after Bendelladj ‘cracked’ SpyEye and made it available to others without having to purchase it from Panin, the two had a falling out,” reads the government’s sentencing memo (PDF) to the judge in the case.

The government says that while Bendelladj maintained he was little more than a malware analyzer working for a security company, his own chat logs put the lie to that claim, noting in November 2012 Bx1 bluntly said: “if they pay me the whole money of the world . . . I wont work for security.”

Bx1 had a penchant for marketing to other thieves. He shrewdly cast SpyEye as a lower-cost, more powerful alternative to the Zeus botnet creation kit, plastering cybercrime forums with animated ads pimping SpyEye as the “Zeuskiller” (in part because SpyEye was designed to remove Zeus from host computers before infecting them).

Part of a video ad for SpyEye.

Continue reading →

Giant Food Sees Giant Card Fraud Spike

April 20, 2016

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Citing a recent and large increase in credit card fraud, Washington, DC-area grocer Giant Food says it will no longer allow customers to use credit cards when purchasing gift cards and reloadable or prepaid debit cards.

A new warning sign at Giant Food checkout counters. Giant says the warning was prompted by a spike in credit card fraud.

I had no idea this was a new thing at Landover, Md.-based Giant, which operates 169 supermarkets in the Washington, D.C. metro area. That is, until I encountered a couple of large new “attention” stickers in the checkout line at a local Giant in Virginia recently. Next to the credit card terminal were big decals with the warning:

“Attention Gift Card Customers: Effective immediately, all purchases of Visa, MasterCard, American Express Gift Cards and all General Purpose Reloadable or Prepaid Cards may only be made with Cash or Bank Pin-based Debit.”

Asked for comment about the change, Giant Food released a brief statement about the policy change that went into effect in March 2016, but otherwise didn’t respond to requests for more details.

“Giant has recently made a change in procedures for purchasing gift cards because of a large increase of fraudulent gift card purchasing,” the company said. “Giant will now accept only a Bank PIN-based debit card or cash for all VISA, MasterCard, and American Express gift cards, as well as re-loadable and prepaid gift cards. This change has been made in order to mitigate potential fraud risk.”

It’s not clear why Giant is only just now taking this basic anti-fraud step. Card thieves love to pick on grocery and convenience stores. Street gangs involved in card fraud (and they’re all involved in card fraud now) often extract money from grocery, dollar and convenience stores using “runners” — low-level members who are assigned the occasionally risky business of physically “cashing out” counterfeit credit and debit cards.

One of the easiest ways thieves can cash out? Walk into a grocery or retail store and buy prepaid gift cards using stolen credit cards. Such transactions — if successful — effectively launder money by converting the stolen item (counterfeit/stolen card) into a good that is equivalent to cash or can be easily resold for cash (gift cards).

I witnessed this exact crime firsthand at a Giant in Maryland last year. As I noted in a Dec. 2015 post about gift card fraud, the crooks caught in the process of these cashout schemes usually are found with dozens of counterfeit credit cards on their person or in their vehicle. From that post: Continue reading →

US-CERT to Windows Users: Dump Apple Quicktime

April 18, 2016

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Microsoft Windows users who still have Apple Quicktime installed should ditch the program now that Apple has stopped shipping security updates for it, warns the Department of Homeland Security‘s U.S. Computer Emergency Readiness Team (US-CERT). The advice came just as researchers are reporting two new critical security holes in Quicktime that likely won’t be patched.

US-CERT cited an April 14 blog post by Christopher Budd at Trend Micro, which runs a program called Zero Day Initiative (ZDI) that buys security vulnerabilities and helps researchers coordinate fixing the bugs with software vendors. Budd urged Windows users to junk Quicktime, citing two new, unpatched vulnerabilities that ZDI detailed which could be used to remotely compromise Windows computers.

“According to Trend Micro, Apple will no longer be providing security updates for QuickTime for Windows, leaving this software vulnerable to exploitation,” US-CERT wrote. The advisory continued:

“Computers running QuickTime for Windows will continue to work after support ends. However, using unsupported software may increase the risks from viruses and other security threats. Potential negative consequences include loss of confidentiality, integrity, or availability of data, as well as damage to system resources or business assets. The only mitigation available is to uninstall QuickTime for Windows. Users can find instructions for uninstalling QuickTime for Windows on the Apple Uninstall QuickTime page.”

While the recommendations from US-CERT and others apparently came as a surprise to many, Apple has been distancing itself from QuickTime on Windows for some time now. In 2013, the Cupertino, Calif. tech giant deprecated all developer APIs for Quicktime on Windows.

Apple shipped an update to Quicktime in January 2016 that removed the Quicktime browser plugin on Windows systems, meaning the threat from browser-based attacks on Quicktime flaws was largely mitigated over the past few months for Windows users who have been keeping up to date with the latest version. Nevertheless, if you have Quicktime on a Windows box — do yourself a favor and get rid of it.

Update, Apr. 21, 10:00 a.m. ET: Apple has finally posted a support document online that explains QuickTime 7 for Windows is no longer supported by Apple. See the full advisory here.

‘Blackhole’ Exploit Kit Author Gets 7 Years

April 14, 2016

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A Moscow court this week convicted and sentenced seven hackers for breaking into countless online bank accounts — including “Paunch,” the nickname used by the author of the infamous “Blackhole” exploit kit. Once an extremely popular crimeware-as-a-service offering, Blackhole was for several years responsible for a large percentage of malware infections and stolen banking credentials, and likely contributed to tens of millions of dollars stolen from small to mid-sized businesses over several years.

Fedotov, the convicted creator of the Blackhole Exploit Kit, stands in front of his Porche Cayenne in an undated photo.

According to Russia’s ITAR-TASS news network, Dmitry “Paunch” Fedotov was sentenced on April 12 to seven years in a Russian penal colony. In October 2013, the then 27-year-old Fedotov was arrested along with an entire team of other cybercriminals who worked to sell, develop and profit from Blackhole.

According to Russian security firm Group-IB, Paunch had more than 1,000 customers and was earning $50,000 per month from his illegal activity. The image at right shows Paunch standing in front of his personal car, a Porsche Cayenne.

First spotted in 2010, BlackHole is commercial crimeware designed to be stitched into hacked or malicious sites and exploit a variety of Web-browser vulnerabilities for the purposes of installing malware of the customer’s choosing.

The price of renting the kit ran from $500 to $700 each month. For an extra $50 a month, Paunch also rented customers “crypting” services; cryptors are designed to obfuscate malicious software so that it remains undetectable by antivirus software.

Paunch worked with several other cybercriminals to purchase new exploits and security vulnerabilities that could be rolled into Blackhole and help increase the success of the software. He eventually sought to buy the exploits from other cybercrooks directly to fund a pricier ($10,000/month) and more exclusive exploit pack called “Cool Exploit Kit.”

The main page of the Blackhole exploit kit Web interface.

As documented on this blog in January 2013 (see Crimeware Author Funds Exploit Buying Spree), Paunch contracted with a third-party exploit broker who announced that he had a $100,000 budget for buying new, previously undocumented “zero-day” vulnerabilities.

Not long after that story, the individual with whom Paunch worked to purchase those exclusive exploits — a miscreant who uses the nickname “J.P. Morgan” — posted a message to the Darkode[dot]com crime forum, stating that he was doubling his exploit-buying budget to $200,000. Continue reading →

‘Badlock’ Bug Tops Microsoft Patch Batch

April 13, 2016

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Microsoft released fixes on Tuesday to plug critical security holes in Windows and other software. The company issued 13 patches to tackle dozens of vulnerabilities, including a much-hyped “Badlock” file-sharing bug that appears ripe for exploitation. Also, Adobe updated its Flash Player release to address at least two-dozen flaws — in addition to the zero-day vulnerability Adobe patched last week.

Source: badlock.org

The Windows patch that seems to be getting the most attention this month remedies seven vulnerabilities in Samba, a service used to manage file and print services across networks and multiple operating systems. This may sound innocuous enough, but attackers who gain access to private or corporate network could use these flaws to intercept traffic, view or modify user passwords, or shut down critical services.

According to badlock.org, a Web site set up to disseminate information about the widespread nature of the threat that this vulnerability poses, we are likely to see active exploitation of the Samba vulnerabilities soon.

Two of the Microsoft patches address flaws that were disclosed prior to Patch Tuesday. One of them is included in a bundle of fixes for Internet Explorer. A critical update for the Microsoft Graphics Component targets four vulnerabilities, two of which have been detected already in exploits in the wild, according to Chris Goettl at security vendor Shavlik.

Just a reminder: If you use Windows and haven’t yet taken advantage of the Enhanced Mitigation Experience Toolkit, a.k.a. “EMET,” you should definitely consider it. I describe the basic features and benefits of running EMET in this blog post from 2014 (yes, it’s time to revisit EMET in a future post), but the gist of it is that EMET helps block or blunt exploits against known and unknown Windows vulnerabilities and flaws in third-party applications that run on top of Windows. The latest version, v. 5.5, is available here. Continue reading →

New Threat Can Auto-Brick Apple Devices

April 12, 2016

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If you use an Apple iPhone, iPad or other iDevice, now would be an excellent time to ensure that the machine is running the latest version of Apple’s mobile operating system — version 9.3.1. Failing to do so could expose your devices to automated threats capable of rendering them unresponsive and perhaps forever useless.

Zach Straley demonstrating the fatal Jan. 1, 1970 bug. Don’t try this at home!

On Feb. 11, 2016, researcher Zach Straley posted a Youtube video exposing his startling and bizarrely simple discovery: Manually setting the date of your iPhone or iPad all the back to January. 1, 1970 will permanently brick the device (don’t try this at home, or against frenemies!).

Now that Apple has patched the flaw that Straley exploited with his fingers, researchers say they’ve proven how easy it would be to automate the attack over a network, so that potential victims would need only to wander within range of a hostile wireless network to have their pricey Apple devices turned into useless bricks.

Not long after Straley’s video began pulling in millions of views, security researchers Patrick Kelley and Matt Harrigan wondered: Could they automate the exploitation of this oddly severe and destructive date bug? The researchers discovered that indeed they could, armed with only $120 of electronics (not counting the cost of the bricked iDevices), a basic understanding of networking, and a familiarity with the way Apple devices connect to wireless networks.

Apple products like the iPad (and virtually all mass-market wireless devices) are designed to automatically connect to wireless networks they have seen before. They do this with a relatively weak level of authentication: If you connect to a network named “Hotspot” once, going forward your device may automatically connect to any open network that also happens to be called “Hotspot.”

For example, to use Starbuck’s free Wi-Fi service, you’ll have to connect to a network called “attwifi”. But once you’ve done that, you won’t ever have to manually connect to a network called “attwifi” ever again. The next time you visit a Starbucks, just pull out your iPad and the device automagically connects.

From an attacker’s perspective, this is a golden opportunity. Why? He only needs to advertise a fake open network called “attwifi” at a spot where large numbers of computer users are known to congregate. Using specialized hardware to amplify his Wi-Fi signal, he can force many users to connect to his (evil) “attwifi” hotspot. From there, he can attempt to inspect, modify or redirect any network traffic for any iPads or other devices that unwittingly connect to his evil network.

TIME TO DIE

And this is exactly what Kelley and Harrigan say they have done in real-life tests. They realized that iPads and other iDevices constantly check various “network time protocol” (NTP) servers around the globe to sync their internal date and time clocks.

The researchers said they discovered they could build a hostile Wi-Fi network that would force Apple devices to download time and date updates from their own (evil) NTP time server: And to set their internal clocks to one infernal date and time in particular: January 1, 1970.

Harrigan and Kelley named their destructive Wi-Fi network "Phonebreaker."

Harrigan and Kelley named their destructive Wi-Fi test network “Phonebreaker.”

The result? The iPads that were brought within range of the test (evil) network rebooted, and began to slowly self-destruct. It’s not clear why they do this, but here’s one possible explanation: Most applications on an iPad are configured to use security certificates that encrypt data transmitted to and from the user’s device. Those encryption certificates stop working correctly if the system time and date on the user’s mobile is set to a year that predates the certificate’s issuance.

Harrigan and Kelley said this apparently creates havoc with most of the applications built into the iPad and iPhone, and that the ensuing bedlam as applications on the device compete for resources quickly overwhelms the iPad’s computer processing power. So much so that within minutes, they found their test iPad had reached 130 degrees Fahrenheit (54 Celsius), as the date and clock settings on the affected devices inexplicably and eerily began counting backwards.

Continue reading →

Adobe Patches Flash Player Zero-Day Threat

April 8, 2016

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Adobe Systems this week rushed out an emergency patch to plug a security hole in its widely-installed Flash Player software, warning that the vulnerability is already being exploited in active attacks.

brokenflash-a Adobe said a “critical” bug exists in all versions of Flash including Flash versions 21.0.0.197 and lower (older) across a broad range of systems, including Windows, Mac, Linux and Chrome OS. Find out if you have Flash and if so what version by visiting this link.

In a security advisory, the software maker said it is aware of reports that the vulnerability is being actively exploited on systems running Windows 7 and Windows XP with Flash Player version 20.0.0.306 and earlier. Continue reading →

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