Krebs on Security

Federal Legislation Targets “Swatting” Hoaxes

November 19, 2015

A bill introduced in the U.S. House of Representatives on Wednesday targets “swatting,” an increasingly common and costly hoax in which perpetrators spoof a communication to authorities about a hostage situation or other violent crime in progress in the hopes of tricking police into responding at a particular address with deadly force.

The Interstate Swatting Hoax Act of 2015, introduced by Rep. Katherine Clark (D-Mass.) and Rep. Patrick Meehan (R-PA), targets what proponents call a loophole in current law. “While federal law prohibits using the telecommunications system to falsely report a bomb threat hoax or terrorist attack, falsely reporting other emergency situations is not currently prohibited,” reads a statement by the House co-sponsors.

To address this shortcoming, the bill “would close this loophole by prohibiting the use of the internet telecommunications system to knowingly transmit false information with the intent to cause an emergency law enforcement response.” Continue reading →

Report: Everyone Should Get a Security Freeze

November 18, 2015

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This author has frequently urged readers to place a security freeze on their credit files as a means of proactively preventing identity theft. Now, a major consumer advocacy group is recommending the same: The U.S. Public Interest Research Group (US-PIRG) recently issued a call for all consumers to request credit file freezes before becoming victims of ID theft.

Each time news of a major data breach breaks, the hacked organization arranges free credit monitoring for all customers potentially at risk from the intrusion. But as I’ve echoed time and again, credit monitoring services do little if anything to stop thieves from stealing your identity. The best you can hope for from these services is that they will alert you when a thief opens or tries to open a new line of credit in your name.

But with a “security freeze” on your credit file at the four major credit bureaus, creditors won’t even be able to look at your file in order to grant that phony new line of credit to ID thieves.

Thankfully, US-PIRG — the federation of state public interest research groups — also is now recommending that consumers file proactive security freezes on their credit files.

“These constant breaches reveal what’s wrong with data security and data breach response. Agencies and companies hold too much information for too long and don’t protect it adequately,” the organization wrote in a report (PDF) issued late last month. “Then, they might wait months or even years before informing victims. Then, they make things worse by offering weak, short-term help such as credit monitoring services.”

The report continues: “Whether your personal information has been stolen or not, your best protection against someone opening new credit accounts in your name is the security freeze (also known as the credit freeze), not the often-offered, under-achieving credit monitoring. Paid credit monitoring services in particular are not necessary because federal law requires each of the three major credit bureaus to provide a free credit report every year to all customers who request one. You can use those free reports as a form of do-it-yourself credit monitoring.”

Check out the USPIRG’s full report, Why You Should Get Security Freezes Before Your Information is Stolen (PDF) for more good advice. In case anything in that report is unclear, in June I posted a Q&A on security freezes, explaining how they work, how to place them and the benefits and potential drawbacks of placing a freeze.

Have you frozen your credit file? If so, sound off about the experience in the comments. If not, why not?

Paris Terror Attacks Stoke Encryption Debate

November 17, 2015

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U.S. state and federal law enforcement officials appear poised to tap into public concern over the terror attacks in France last week to garner support for proposals that would fundamentally weaken the security of encryption technology used by U.S. corporations and citizens. Here’s a closer look at what’s going on, and why readers should be tuned in and asking questions.

Despite early and widely repeated media reports that the terrorists who killed at least 128 people in Paris used strong encryption to disguise their communications, the evidence of this has failed to materialize. An initial report on Nov. 14 from Forbes titled “Why the Paris ISIS Terrorists Used PlayStation4 to Plan Attacks” was later backpedalled to “How Paris ISIS Terrorists May Have Used PlayStation 4 to Discuss and Plan.” Turns out there was actually nothing to indicate the attackers used gaming consoles to hide their communications; only that they could do that if they wanted to.

Politico ran a piece on Sunday that quoted a Belgian government official saying French authorities had confiscated at least one PlayStation 4 gaming console from one of the attacker’s belongings (hat tip to Insidesources.com).

“It’s unclear if the suspects in the attacks used PlayStation as a means of communication,” the Politico story explained. “But the sophistication of the attacks raises questions about the ability of law enforcement to detect plots as extremists use new and different forms of technology to elude investigators.”

Also on Sunday, The New York Times published a story that included this bit:

“The attackers are believed to have communicated using encryption technology, according to European officials who had been briefed on the investigation but were not authorized to speak publicly. It was not clear whether the encryption was part of widely used communications tools, like WhatsApp, which the authorities have a hard time monitoring, or something more elaborate. Intelligence officials have been pressing for more leeway to counter the growing use of encryption.”

After heavy criticism of the story on Twitter, The Times later removed the story from the site (it is archived here). That paragraph was softened into the following text, which was included in a different Times story later in the day: “European officials said they believed the Paris attackers had used some kind of encrypted communication, but offered no evidence.” To its credit, the Times today published a more detailed look at the encryption debate.

The media may be unwittingly playing into the hands of folks that former NBC reporter Bob Sullivan lovingly calls the “anti-encryption opportunists,” i.e., those who support weakening data encryption standards to make it easier for law enforcement officials to lawfully monitor people suspected of terrorist activity.

The directors of the FBI , Central Intelligence Agency and National Security Agency have repeated warned Congress and the technology community that they’re facing a yawning intelligence gap from smart phone and internet communication technologies that use encryption which investigators cannot crack — even after being granted the authority to do so by the U.S. courts.

For its part, the Obama administration has reportedly backed down in its bitter dispute with Silicon Valley over the encryption of data on iPhones and other digital devices.

“While the administration said it would continue to try to persuade companies like Apple and Google to assist in criminal and national security investigations, it determined that the government should not force them to breach the security of their products,” wrote Nicole Perlroth and David Sanger for The New York Times in October. “In essence, investigators will have to hope they find other ways to get what they need, from data stored in the cloud in unencrypted form or transmitted over phone lines, which are covered by a law that affects telecommunications providers but not the technology giants.”

But this hasn’t stopped proponents of weakening encryption from identifying opportunities to advance their cause. In a memo obtained in August by The Washington Post, Robert Litt, a lawyer in the Office of the Director of National Intelligence, wrote that the public support for weakening encryption “could turn in the event of a terrorist attack or criminal event where strong encryption can be shown to have hindered law enforcement.”

To that apparent end, law enforcement officials from Manhattan and the City of London are expected on Wednesday to release a “white paper on smartphone encryption,” during an annual financial crimes and cybersecurity symposium at The Federal Reserve Bank of New York. A media notice (PDF) about the event was sent out by Manhattan District Attorney Cyrus R. Vance Jr., one of the speakers at the event and a vocal proponent of building special access for law enforcement into encrypted communications. Here’s Vance in a recent New York Times op-ed on the need for the expanded surveillance powers.

Continue reading →

Chipotle Serves Up Chips, Guac & HR Email

November 16, 2015

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The restaurant chain Chipotle Mexican Grill seems pretty good at churning out huge numbers of huge burritos, but the company may need to revisit some basic corporate cybersecurity concepts. For starters, Chipotle’s human resources department has been replying to new job applicants using the domain “chipotlehr.com” — a Web site name that the company has never owned or controlled.

Translation: Until last week, anyone could have read email destined for the company’s HR department just by registering the domain “chipotlehr.com”. Worse, Chipotle itself has inadvertently been pointing this out for months in emails to everyone who’s applied for a job via the company’s Web site.

This security oversight by Chipotle was brought to light by KrebsOnSecurity.com reader Michael Kohlman, a professional IT expert who discovered the bug after applying for a job at the food retailer.

Kohlman, who’s between jobs at the moment, said he submitted his resume and application to Chipotle’s online HR department not necessarily because he wanted to be a restaurant employee, but more to satisfy the terms of his unemployment benefits (which require him to regularly show proof that he is actively looking for work).

Kohlman said after submitting his resume and application, he received an email from Chipotle Careers that bore the return address @chipotlehr.com. The Minnesota native said he became curious about the source of the Chipotle HR email when a reply sent to that address generated an error or “bounce” message saying his missive was undeliverable.

“The canned response was very odd,” Kohlman said. “Rather than indicating the email didn’t exist, [the bounced message] just came back and said it could not resolve the DNS settings.”

A quick search for ownership records on the domain showed that it had never before been registered. So, Kohlman said, on a whim he plunked down $30 to purchase it.

The welcome message that one receives upon successfully submitting an application for a job at Chipotle discourages users from replying to the message. But Kohlman said a brief look at the incoming email associated with that domain revealed a steady stream of wayward emails to chipotlehr.com — mainly from job seekers and people seeking password assistance to the Chipotle HR portal.

Continue reading →

JPMorgan Hackers Breached Anti-Fraud Vendor G2 Web Services

November 13, 2015

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Buried in the federal indictments unsealed this week against four men accused of stealing tens of millions of consumer records from JPMorgan Chase and other brokerage firms are other unnamed companies that were similarly victimized by the accused. One of them, identified in the indictments only as “Victim #12,” is an entity that helps banks block transactions for dodgy goods advertised in spam. Turns out, the hackers targeted this company so that they could more easily push through payments for spam-advertised prescription drugs and fake antivirus schemes.

According to multiple sources, Victim #12 is none other than Bellevue, Wash. based G2 Web Services LLC, a company that helps banks figure out if a website is fraudulent or is selling contraband. G2 Web Services has not responded to multiple requests for comment.

In the final chapters of my book, Spam Nation: The Inside Story of Organized Cybercrime, I detailed the work of The International AntiCounterfeiting Coalition (IACC), a non-profit organization dedicated to combating product counterfeiting and piracy.

In 2011, G2 Web Services landed a contract to help the IACC conduct “test buys” at sites with products that were being advertised via spam. The company would identify which banks (mostly in Asia) were processing payments for these sites, and then Visa and MasterCard would rain down steep fines on the banks for violating their contracts with the credit card companies. The idea was to follow the money from schemes tied to cybercrime, deter banks from accepting funds from fraudulent transactions, and make it difficult for spammers to maintain stable credit card processing for those endeavors.

Prosecutors say the ringleader of the cybercrime gang accused of breaking into JPMC, Scottrade, E-Trade and others is 31-year-old Gery Shalon, a resident of Tel Aviv and Moscow. Investigators allege Shalon and his co-conspirators monitored credit card transactions processed through their payment processing business to attempt to discern which, if any, were undercover transactions made on behalf of credit card companies attempting to identify unlawful merchants. The government also charges that beginning in or about 2012, Shalon and his co-conspirators hacked into the computer networks of Victim-12 (G2 Web Services).

Shalon and his gang allegedly monitored Victim-12’s detection efforts, including reading emails of Victim-12 employees so they could take steps to evade detection.

“In particular, through their unlawful intrusion into Victim-12’s network, Shalon and his co-conspirators determined which credit and debit card numbers Victim-12 employees were using the make undercover purchases of illicit goods in the course of their effort to detect unlawful merchants,” Shalon’s indictment explains. “Upon identifying those credit and debit card numbers, Shalon and his co-conspirators blacklisted the numbers from their payment processing business, automatically declining any transaction for which payment was offered through one of those credit or debit card numbers.” Continue reading →

The Lingering Mess from Default Insecurity

November 12, 2015

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The Internet of Things is fast turning into the Internet-of-Things-We-Can’t-Afford. Almost daily now we are hearing about virtual shakedowns wherein attackers demand payment in Bitcoin virtual currency from a bank, e-retailer or online service. Those who don’t pay the ransom see their sites knocked offline in coordinated cyberattacks. This story examines one contributor to the problem, and asks whether we should demand better security from ISPs, software and hardware makers.

These attacks are fueled in part by an explosion in the number of Internet-connected things that are either misconfigured or shipped in a default insecure state. In June I wrote about robot networks or “botnets” of hacked Internet routers that were all made and shipped by networking firm Ubiquiti. Attackers were able to compromise the routers because Ubiquiti shipped them with remote administration switched on by default and protected by a factory default password pair (ubnt/ubnt or no password at all).

That story followed on reports from security firm Imperva (see Lax Security Opens the Door for Mass-Scale Hijacking of SOHO Routers) which found a botnet of tens of thousands of hijacked Ubiquiti routers being used to launch massive ransom-based denial-of-service attacks. Imperva discovered that those tens of thousands of hacked devices were so easy to remotely control that each router was being exploited by several different extortion groups or individual criminal actors. The company also found those actors used the hacked routers to continuously scan the Internet for more vulnerable routers.

Last week, researchers in Vienna, Austria-based security firm SEC Consult released data suggesting that there are more than 600,000 vulnerable Ubiquiti routers in use by Internet service providers (ISPs) and their customers. All are sitting on the Internet wide open and permitting anyone to abuse them for these digital shakedowns.

These vulnerable devices tend to coalesce in distinct geographical pools with deeper pools in countries with more ISPs that shipped them direct to customers without modification. SEC Consult said it found heavy concentrations of the exposed Ubiquiti devices in Brazil (480,000), Thailand (170,000) and the United States (77,000).

SEC Consult cautions that the actual number of vulnerable Ubiquiti systems may be closer to 1.1 million. Turns out, the devices ship with a cryptographic certificate embedded in the router’s built-in software (or “firmware”) that further weakens security on the devices and makes them trivial to discover on the open Internet. Indeed, the Censys Project, a scan-driven Internet search engine that allows anyone to quickly find hosts that use that certificate, shows exactly where each exposed router resides online.

The Imperva research from May 2015 touched a nerve among some Ubiquiti customers who thought the company should be doing more to help customers secure these routers. In a May 2015 discussion thread on the company’s support site, Ubiquiti’s vice president of technology applications Matt Harding said the router maker briefly disabled remote access on new devices, only to reverse that move after pushback from ISPs and other customers who wanted the feature turned back on.

In a statement sent to KrebsOnSecurity via email, Harding said the company doesn’t market its products to home users, and that it sells its products to industry professionals and ISPs.

“Because of this we originally shipped with the products’ configurations as flexible as possible and relied on the ISPs to secure their equipment appropriately,” he said. “Some ISPs use self-built provisioning scripts and intentionally locking down devices out of the box would interfere with the provisioning workflows of many customers.”

Harding said it’s common in the networking equipment industry to ship with a default password for initial use. While this may be true, it seems far less common that networking companies ship hardware that allows remote administration over the Internet by default. He added that beginning with firmware version 5.5.2 — originally released in August 2012 — Ubiquiti devices have included very persistent messaging in the user interface to remind customers to follow best practices and change their passwords.

“Any devices shipping since then would have this reminder and users would have to intentionally ignore it to install equipment with default credentials,” he wrote. Harding noted that the company also provides a management platform that ISPs can use to change all default device passwords in bulk.

Ubiquiti’s nag screen asking users to change the default credentials. The company’s devices still ship with remote administration turned on.

Continue reading →

Critical Fixes for Windows, Adobe Flash Player

November 11, 2015

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For the third time in a month, Adobe has issued an update to plug security holes in its Flash Player software. The update came on Patch Tuesday, when Microsoft released a dozen patches to fix dozens of vulnerabilities in Windows, Internet Explorer, Skype and other software.

One-quarter of the patches from Microsoft address flaws that the company labels “critical,” meaning they can be exploited by malware or malcontents to break into vulnerable systems with no help from users. Four of the bulletins address vulnerabilities that were publicly disclosed prior to Patch Tuesday, meaning malicious hackers had a head start in figuring out how to exploit those weaknesses.

Top of the priority list among these 12 patches should probably be the one for Internet Explorer, which fixes more than two dozen flaws in IE, nearly all of them critical, browse-to-a-hacked-site-and-get-owned flaws. Another patch, MS15-113, fixes critical bugs in Microsoft’s Edge Browser, its intended replacement for IE. Also of note is a Microsoft Office patch that addresses seven flaws.

This month also includes a patch for .NET, a program that past experience has taught me to patch separately. If you use Windows and Windows Update says you have patches available for .NET, consider unchecking those updates until you’ve applied the rest released on Tuesday. Reboot and install any available .NET updates.

Separately, Adobe issued a patch for its Flash Player software that fixes at least 17 vulnerabilities in the program and in Adobe AIR. Adobe says it is not aware of any exploits in the wild for issues addressed in this update, but readers should seriously consider whether having Flash installed and/or enabled in the browser is worth the risk. Continue reading →

Arrests in JP Morgan, eTrade, Scottrade Hacks

November 10, 2015

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U.S. authorities today announced multiple indictments and arrests in connection with separate hacking incidents that resulted in the theft of more than 100 million customer records from some of the nation’s biggest financial institutions and brokerage firms, including JP Morgan Chase, E*Trade and Scottrade.

Prosecutors in Atlanta and New York unsealed indictments against four men and one unnamed alleged co-conspirator in connection with a complex, sprawling scheme to artificially manipulate the price of certain publicly traded U.S. stocks.

The defendants are accused of hacking into JPMorgan Chase in 2014, stealing the names, addresses, phone numbers and email addresses of the holders of some 83 million accounts at the financial institution –a breach that the Justice Department has dubbed the “largest theft of customer data from a U.S. financial institution in history.” Scottrade announced a similar breach of 4.6 million customer records in October 2015. Etrade last month warned 31,000 customers that their contact information may have been breached.

The men allegedly laundered hundreds of millions of dollars from the scheme via a vast cybercrime network that included illegal online pharmacies, fake antivirus or “scareware” schemes, Internet casinos and even a Bitcoin exchange.

Indictments from Atlanta U.S. Attorney John Horn name Gery Shalon, 31, a resident of Tel Aviv and Moscow, who was arrested by Israeli law enforcement in Savyon, Israel in July 2015 and remains in custody there pending extradition proceedings. Another man, Joshua Samuel Aaron, also 31, is a U.S. citizen and resident of Israel, but currently a fugitive. The Atlanta indictments referenced a third, as yet-unnamed accomplice.

Separately, the U.S. Attorney’s Office for the Southern District of New York unsealed its own charges against Shalon and Aaron, as well as a third Israeli citizen, 40-year-old Ziv Orenstein. In addition, prosecutors there announced indictments against Anthony R. Murgio, alleging he fraudulently operated the Florida-based Coin.mx Bitcoin exchange along with Shalon and through it further helped the conspiracy launder its illicit proceeds. Murgio was arrested in July 2015 and is facing prosecution in New York.

According to the Justice Department, between approximately 2007 and July 2015, Shalon owned and operated unlawful internet gambling businesses in the United States and abroad, and that he owned and operated multinational payment processors for illegal pharmaceutical suppliers, counterfeit and malicious software (“malware”) distributors. The government further alleges that Shalon owned and controlled Coin.mx, an illegal United States-based Bitcoin exchange that operated in violation of federal anti-money laundering laws.

“Through their criminal schemes, between in or about 2007 and in or about July 2015, Shalon and his co-conspirators earned hundreds of millions of dollars in illicit proceeds, of which Shalon concealed at least $100 million in Swiss and other bank accounts,” reads a statement issued by Preet Bharara, the United States Attorney for the Southern District of New York. Continue reading →

Ransomware Now Gunning for Your Web Sites

November 9, 2015

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One of the more common and destructive computer crimes to emerge over the past few years involves ransomware — malicious code that quietly scrambles all of the infected user’s documents and files with very strong encryption. A ransom, to be paid in Bitcoin, is demanded in exchange for a key to unlock the files. Well, now it appears fraudsters are developing ransomware that does the same but for Web sites — essentially holding the site’s files, pages and images for ransom.

Image: Kaspersky Lab

This latest criminal innovation, innocuously dubbed “Linux.Encoder.1” by Russian antivirus and security firm Dr.Web, targets sites powered by the Linux operating system. The file currently has almost zero detection when scrutinized by antivirus products at Virustotal.com, a free tool for scanning suspicious files against dozens of popular antivirus products.

Typically, the malware is injected into Web sites via known vulnerabilities in site plugins or third-party software — such as shopping cart programs. Once on a host machine, the malware will encrypt all of the files in the “home” directories on the system, as well backup directories and most of the system folders typically associated with Web site files, images, pages, code libraries and scripts.

The ransomware problem is costly, hugely disruptive, and growing. In June, the FBI said it received 992 CryptoWall-related complaints in the preceding year, with losses totaling more than $18 million. And that’s just from those victims who reported the crimes to the U.S. government; a huge percentage of cybercrimes never get reported at all.

ONE RECENT VICTIM

On Nov. 4, the Linux Website ramsomware infected a server used by professional Web site designer Daniel Macadar. The ransom message was inside a plain text file called “instructions to decrypt” that was included in every file directory with encrypted files:

“To obtain the private key and php script for this computer, which will automatically decrypt files, you need to pay 1 bitcoin(s) (~420 USD),” the warning read. “Without this key, you will never be able to get your original files back.”

Macadar said the malware struck a development Web server of his that also hosted Web sites for a couple of longtime friends. Macadar was behind on backing up the site and the server, and the attack had rendered those sites unusable. He said he had little choice but to pay the ransom. But it took him some time before he was able to figure out how to open and fund a Bitcoin account.

“I didn’t have any Bitcoins at that point, and I was never planning to do anything with Bitcoin in my life,” he said.

According to Macadar, the instructions worked as described, and about three hours later his server was fully decrypted. However, not everything worked the way it should have.

“There’s a decryption script that puts the data back, but somehow it ate some characters in a few files, adding like a comma or an extra space or something to the files,” he said.

Macadar said he hired Thomas Raef — owner of Web site security service WeWatchYourWebsite.com — to help secure his server after the attack, and to figure out how the attackers got in. Raef told me his customer’s site was infected via an unpatched vulnerability in Magento, a shopping cart software that many Web sites use to handle ecommerce payments.

CheckPoint detailed this vulnerability back in April 2015 and Magento issued a fix yet many smaller ecommerce sites fall behind on critical updates for third-party applications like shopping cart software. Also, there are likely other exploits published recently that can expose a Linux host and any associated Web services to attackers and to site-based ransomware. Continue reading →

Pointer to Reddit ‘Ask Me Anything’ Interview

November 8, 2015

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I recently participated in an “Ask Me Anything” interview on Reddit.com about investigative reporting. I spent the better part of a day responding to readers about the challenges and rewards of independent journalism and a focus on data breaches, cybercrime and cybercriminals. It occurred to me today that I hadn’t mentioned the interview yet on this site, so here it is. The discussion is now locked, but feel free to follow-up with your own questions here in the comments, and I’ll answer the better ones as time permits.

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