Krebs on Security

TalkTalk, Script Kids & The Quest for ‘OG’

November 5, 2015

So you’ve got two-step authentication set up to harden the security of your email account (you do, right?). But when was the last time you took a good look at the security of your inbox’s recovery email address? That may well be the weakest link in your email security chain, as evidenced by the following tale of a IT professional who saw two of his linked email accounts recently hijacked in a bid to steal his Twitter identity.

Earlier this week, I heard from Chris Blake, a longtime KrebsOnSecurity reader from the United Kingdom. Blake reached out because I’d recently written about a character of interest in the breach at British phone and broadband provider TalkTalk: an individual using the Twitter handle “@Fearful“.

Blake proceeded to explain how that same Fearful account had belonged to him for some time until May 2015, when an elaborate social engineering attack on his Internet service provider (ISP) allowed the current occupant of the account to swipe it out from under him.

On May 11, Blake received a text message on his mobile stating that his Microsoft Outlook account password had been changed. A minute later, he got another text from Microsoft saying his two-factor authentication (texted login codes to his phone) had been removed. After that, he could no longer log in to his Outlook account because someone had changed his password and removed his recovery email address (changing it to a free and disposable yopmail.com account).

Minutes after that, someone tweeted out the message from his account: “This twitter account is officially operated by Elliott G.” The tweet prior to that one mentions Blake by name and is a response to an inquiry to the Microsoft Store before the account was taken. The alias on Blake’s @Fearful account was changed to “Glubz”.

Blake said it took some time to figure out how the miscreant had hijacked his Twitter and Outlook accounts. Turns out, the recovery email address that he’d supplied for his Outlook account was to an email address at his local ISP, and the attacker executed the first step in the hijack by tricking a customer service employee at the ISP into redirecting his messages.

The attacker, apparently another person with a British accent, called Blake’s ISP pretending to be Blake and said he was locked out of his inbox. Could the ISP please change the domain name system (DNS) settings on his domain and associated mail account?

According to Blake, an investigation into the incident at the ISP shows that the customer service rep asked the caller to verify any other email addresses associated with Blake’s ISP account, and after some waiting the support employee actually read off a few of them. Seconds later, the attacker sent an email to the support person that spoofed one of those email addresses. After that, Blake’s ISP complied with the request, changing the DNS settings on his account to settings that the caller supplied for an account at Namecheaphosting.com.

OG IS A THING

With all of the access to other accounts that one’s inbox affords, the attacker in this case could have done some serious damage and cost Blake a lot of money. So why was he only interested in Blake’s Twitter account?

Short usernames are something of a prestige or status symbol for many youngsters, and some are willing to pay surprising amounts of money for them. Known as “OG” (short for “original” and also “original gangster”) in certain circles online, these can be usernames for virtually any service, from email accounts at Webmail providers to social media services like Instagram, Snapchat, Twitter and Youtube. People who traffic in OG accounts prize them because they can make the account holder appear to have been a savvy, early adopter of the service before it became popular and before all of the short usernames were taken.

“I didn’t realize this was even a thing until all this happened,” Blake said of the demand for OG accounts. “It wasn’t until the day after my email accounts were hacked that I realized it was really my Twitter account he was after.”

As it happens, the guy who is currently squatting on Blake’s @Fearful Twitter account — a young wanna-be hacker who uses the nickname “Glubz” — is very publicly in the business of selling hijacked OG accounts. In the screen shot below, we can see Glubz on the script kiddie-friendly online community Hackforums promoting his “OG Store,” in which he sells “Snapchats,” Email accounts and “Youtubes” for $10-$40 apiece, payable via Bitcoin or PayPal. The bottom of the message includes a link to Glubz’s personal site — elliottg[dot]net (also hosted at Namecheaphosting.com). Continue reading →

How Carders Can Use eBay as a Virtual ATM

November 3, 2015

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How do fraudsters “cash out” stolen credit card data? Increasingly, they are selling in-demand but underpriced products on eBay that they don’t yet own. Once the auction is over, the auction fraudster uses stolen credit card data to buy the merchandise from an e-commerce store and have it shipped to the auction winner. Because the auction winners actually get what they bid on and unwittingly pay the fraudster, very often the only party left to dispute the charge is the legitimate cardholder.

So-called “triangulation fraud” — scammers using stolen cards to buy merchandise won at auction by other eBay members — is not a new scam. But it’s a crime that’s getting more sophisticated and automated, at least according to a victim retailer who reached out to KrebsOnSecurity recently after he was walloped in one such fraud scheme.

The victim company — which spoke on condition of anonymity — has a fairly strong e-commerce presence, and is growing rapidly. For the past two years, it was among the Top 500 online retailers as ranked by InternetRetailer.com.

The company was hit with over 40 orders across three weeks for products that later traced back to stolen credit card data. The victimized retailer said it was able to stop a few of the fraudulent transactions before the items shipped, but most of the sales were losses that the victim firm had to absorb.

Triangulation fraud. Image: eBay Enterprise.

The scheme works like this: An auction fraudster sets up one (or multiple) eBay accounts and sells legitimate products. A customer buys the item from the seller (fraudster) on eBay and the money gets deposited in the fraudster’s PayPal account.

The fraudster then takes the eBay order information to another online retailer which sells the same item, buys the item using stolen credit card data, and has the item shipped to the address of the eBay customer that is expecting the item. The fraudster then walks away with the money.

One reason this scheme is so sneaky is that the eBay customers are happy because they got their product, so they never complain or question the company that sent them the product. For the retailer, the order looks normal: The customer contact info in the order form is partially accurate: It has the customer’s correct shipping address and name, but may list a phone number that goes somewhere else — perhaps to a voicemail owned and controlled by the fraudster.

“For the retailer who ships thousands of orders every day, this fraudulent activity really doesn’t raise any red flags,” my source — we’ll call him “Bill,” — told me. “The only way they eventually find out is with a sophisticated fraud screening program, or when the ‘chargeback’ from Visa or MasterCard finally comes to them from the owner of the stolen card.”

In an emailed statement, eBay said the use of stolen or fraudulent credit card numbers to purchase goods on eBay is by no means unique to eBay.

“We believe collaboration and cooperation is the best way to combat fraud and organized retail crime of this nature, working in partnership with retailers and law enforcement,” wrote Ryan Moore, eBay’s senior manager of global corporate affairs. Detecting this type of fraud, Moore said, “relies heavily on the tools that merchants use themselves, which includes understanding their customers and implementing the correct credit card authorization protocols.”

Moore declined to discuss the technology and approaches the eBay uses to fight triangulation fraud — saying eBay doesn’t want tip its hand to cybercriminals. But he said the company uses internal tools and risk models to identify suspicious activity on its platform, and that it trains hundreds of retailers and law enforcement on various types of fraud, including triangulation fraud.

QUAD FRAUD?

Moore pointed to one education campaign on eBay’s site, which adds another wrinkle to this fraud scheme: Very often the people listing the item for sale on eBay are existing, long-time eBay members with good standing who get recruited to sell items via work-at-home job scams. These schemes typically advertise that the seller gets to keep a significant cut of the sale price — typically 30 percent.

A recruitment email from a work-at-home job scam that involves respondents in triangulation fraud. Source: eBay

Interesting, the guy selling carded goods stolen from Bill’s company has been on eBay for more than a decade and has a near-perfect customer feedback score. That seller is not being referenced in this story because his feedback page directly links to transactions from Bill’s company. Continue reading →

Cybersecurity Information (Over)Sharing Act?

October 27, 2015

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The U.S. Senate is preparing to vote on cybersecurity legislation that proponents say is sorely needed to better help companies and the government share information about the latest Internet threats. Critics of the bill and its many proposed amendments charge that it will do little, if anything, to address the very real problem of flawed cybersecurity while creating conditions that are ripe for privacy abuses. What follows is a breakdown of the arguments on both sides, and a personal analysis that seeks to add some important context to the debate.

Up for consideration by the full Senate this week is the Cybersecurity Information Sharing Act (CISA), a bill designed to shield companies from private lawsuits and antitrust laws if they seek help or cooperate with one another to fight cybercrime. The Wall Street Journal and The Washington Post each recently published editorials in support of the bill.

Update, 6:57 p.m. ET: The Senate this afternoon passed CISA by a vote of 74-21.

Original story:

“The idea behind the legislation is simple: Let private businesses share information with each other, and with the government, to better fight an escalating and constantly evolving cyber threat,” the WSJ said in an editorial published today (paywall). “This shared data might be the footprint of hackers that the government has seen but private companies haven’t. Or it might include more advanced technology that private companies have developed as a defense.”

“Since hackers can strike fast, real-time cooperation is essential,” the WSJ continued. “A crucial provision would shield companies from private lawsuits and antitrust laws if they seek help or cooperate with one another. Democrats had long resisted this legal safe harbor at the behest of plaintiffs lawyers who view corporate victims of cyber attack as another source of plunder.”

The Post’s editorial dismisses “alarmist claims [that] have been made by privacy advocates who describe it as a ‘surveillance’ bill”:

“The notion that there is a binary choice between privacy and security is false. We need both privacy protection and cybersecurity, and the Senate legislation is one step toward breaking the logjam on security,” the Post concluded. “Sponsors have added privacy protections that would scrub out personal information before it is shared. They have made the legislation voluntary, so if companies are really concerned, they can stay away. A broad coalition of business groups, including the U.S. Chamber of Commerce, has backed the legislation, saying that cybertheft and disruption are “advancing in scope and complexity.”

But critics of CISA say the devil is in the details, or rather in the raft of amendments that may be added to the bill before it’s passed. The Center for Democracy & Technology (CDT), a nonprofit technology policy group based in Washington, D.C., has published a comprehensive breakdown of the proposed amendments and their potential impacts.

CDT says despite some changes made to assuage privacy concerns, neither CISA as written nor any of its many proposed amendments address the fundamental weaknesses of the legislation. According to CDT, “the bill requires that any Internet user information volunteered by a company to the Department of Homeland Security for cybersecurity purposes be shared immediately with the National Security Agency (NSA), other elements of the Intelligence Community, with the FBI/DOJ, and many other Federal agencies – a requirement that will discourage company participation in the voluntary information sharing scheme envisioned in the bill.”

CDT warns that CISA risks turning the cybersecurity program it creates into a backdoor wiretap by authorizing sharing and use of CTIs (cyber threat indicators) for a broad array of law enforcement purposes that have nothing to do with cybersecurity. Moreover, CDT says, CISA will likely introduce unintended consequences:

“It trumps all law in authorizing companies to share user Internet communications and data that qualify as ‘cyber threat indicators,’ [and] does nothing to address conduct of the NSA that actually undermines cybersecurity, including the stockpiling of zero day vulnerabilities.”

ANALYSIS

On the surface, efforts to increase information sharing about the latest cyber threats seem like a no-brainer. We read constantly about breaches at major corporations in which the attackers were found to have been inside of the victim’s network for months or years on end before the organization discovered that it was breached (or, more likely, they were notified by law enforcement officials or third-party security firms).

If only there were an easier way, we are told, for companies to share so-called “indicators of compromise” — Internet addresses or malicious software samples known to be favored by specific cybercriminal groups, for example — such breaches and the resulting leakage of consumer data and corporate secrets could be detected and stanched far more quickly.

In practice, however, there are already plenty of efforts — some public, some subscription-based — to collect and disseminate this threat data. From where I sit, the biggest impediment to detecting and responding to breaches in a more timely manner comes from a fundamental lack of appreciation — from an organization’s leadership on down — for how much is riding on all the technology that drives virtually every aspect of the modern business enterprise today. While many business leaders fail to appreciate the value and criticality of all their IT assets, I guarantee you today’s cybercrooks know all too well how much these assets are worth. And this yawning gap in awareness and understanding is evident by the sheer number of breaches announced each week. Continue reading →

TalkTalk Hackers Demanded £80K in Bitcoin

October 24, 2015

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TalkTalk, a British phone and broadband provider with more than four million customers, disclosed Friday that intruders had hacked its Web site and may have stolen personal and financial data. Sources close to the investigation say the company has received a ransom demand of approximately £80,000 (~USD $122,000), with the attackers threatening to publish the TalkTalk’s customer data unless they are paid the amount in Bitcoin.

In a statement on its Web site, TalkTalk said a criminal investigation was launched by the Metropolitan Police Cyber Crime Unit following “a significant and sustained cyberattack on our website.”

“That investigation is ongoing, but unfortunately there is a chance that some of the following data has been compromised: names, addresses, date of birth, phone numbers, email addresses, TalkTalk account information, credit card details and/or bank details,” the statement continues. “We are continuing to work with leading cyber crime specialists and the Metropolitan Police to establish exactly what happened and the extent of any information accessed.”

A source close to the investigation who spoke on condition of anonymity told KrebsOnSecurity that the hacker group who demanded the £80,000 ransom provided TalkTalk with copies of the tables from its user database as evidence of the breach. The database in question, the source said, appears related to at least 400,000 people who have recently undergone credit checks for new service with the company. However, TalkTalk’s statement says it’s too early to say exactly how many customers were impacted. “Identifying the extent of information accessed is part of the investigation that’s underway,” the company said.

It appears that multiple hacker collectives have since claimed responsibility for the hack, including one that the BBC described as a “Russian Islamist group” — although sources say there is absolutely no evidence to support that claim at this time.

Separately, promises to post the stolen data have appeared on AlphaBay, a Deep Web black market that specialized in selling stolen goods and illicit drugs. The posting was made by someone using the nickname “Courvoisier.” This member, whose signature describes him as “Level 6 Fraud and Drugs seller,” appears to be an active participant in the AlphaBay market with many vouches from happy customers who’ve turned to him for illegal drugs and stolen credit cards, among other goods and services.

It seems likely that Courvoisier is not bluffing, at least about posting some subset of TalkTalk customer data. According to a discussion thread on Reddit.com dedicated to explaining AlphaBay’s new Levels system, an AlphaBay seller who has reached the status of Level 6 has successfully consummated at least 500 sales worth a total of at least $75,000, and achieved a 90% positive feedback rating or better from previous customers.

An AlphaBay dark market thread promising the release of TalkTalk customer data.

Continue reading →

IBM Runs World’s Worst Spam-Hosting ISP?

October 21, 2015

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This author has long sought to shame Web hosting and Internet service providers who fail to take the necessary steps to keep spammers, scammers and other online ne’er-do-wells off their networks. Typically, the companies on the receiving end of this criticism are little-known Internet firms. But according to anti-spam activists, the title of the Internet’s most spam-friendly provider recently has passed to networks managed by IBM — one of the more recognizable and trusted names in technology and security.

In March 2010, not long after I began working on my new book Spam Nation: The Inside Story of Organized Cybercrime, From Global Epidemic to Your Front Door, I ran a piece titled Naming and Shaming Bad ISPs. That story drew on data from 10 different groups that track spam and malware activity by ISP. At the time, a cloud computing firm called Softlayer was listed prominently in six out of 10 of those rankings.

In June 2013, Softlayer was acquired by IBM. (Update: Oct. 31, 11:43 p.m. ET: As reader Alex and others have pointed out, another ISP listed prominently in this chart below — ThePlanet — is now also part of IBM/Softlayer).

The top spam-friendly ISPs and hosting providers in early 2010. Softlayer and ThePlanet both listed prominently in the top 10, and both are now owned by IBM/Softlayer.

Original story:

Softlayer gradually cleaned up its act, and began responding more quickly to abuse reports filed by anti-spammers and security researchers. In July 2013, the company was acquired by IBM. More recently, however, the trouble at networks managed by Softlayer has returned. Last month, anti-spam group Spamhaus.org listed Softlayer as the “#1 spam hosting ISP,” putting Softlayer at the very top of its World’s Worst Spam Support ISPs index. Spamhaus said the number of abuse issues at the ISP has “rapidly reached rarely previously seen numbers.”

Contacted by KrebsOnSecurity, Softlayer for several weeks did not respond to requests for comment. After reaching out to IBM earlier this week, I received the following statement from Softlayer Communications Director Andre Fuochi:

“With the growth of Softlayer’s global footprint, as expected with any fast growing service, spammers have targeted our platform. We are aggressively working with authorities, groups like The Spamhaus Project, and IBM Security analysts to shut down this recent, isolated spike. Just in the past month we’ve shut down 95 percent of the spam accounts identified by Spamhaus, and continue to actively eliminate this activity.” Continue reading →

Flash, Java Patches Fix Critical Holes

October 20, 2015

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Adobe has issued a patch to fix a zero-day vulnerability in its Flash Player software. Separately, Oracle today released an update to plug more than two-dozen flaws in its Java software. Both programs plug directly into the browser and are highly targeted by malicious software and malefactors. Although Flash and Java are both widely installed, most users could probably ditch each program with little to no inconvenience or regret. Continue reading →

Don’t Be Fooled by Fake Online Reviews Part II

October 19, 2015

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In July I wrote about the dangers of blindly trusting online reviews, especially for high-dollar services like moving companies. That piece told the story of Full Service Van Lines, a moving company that had mostly five-star reviews online but whose owners and operators had a long and very public history of losing or destroying their customers’ stuff and generally taking months to actually ship what few damaged goods it delivered. Last week, federal regulators shut the company down.

NBC Miami reports that Full Service Van Lines (FSVL) was shut down by the U.S. Department of Transportation, but not because of consumer complaints. The DOT reportedly revoked the company’s license due to a pattern of safety violations. And that’s saying something: The NBC story said FSVL received more complaints this year than any other Florida mover of its size.

My July story on FSVL concluded that the company’s owners likely inflated and manipulated their online reputation via a search engine optimization (SEO) firm they owned. Unfortunately, this practice is incredibly common among labor-intensive services that do not require the customer to come into the company’s offices but instead come to the consumer. These services include but are not limited to locksmiths, windshield replacement services, garage door repair and replacement technicians, carpet cleaning and other services that consumers very often call for immediate service.

Bryan Seely, a security expert who’s working on an as-yet unpublished book on these so-called dark/black SEO practices, said such services are rife for SEO experts who create hundreds or thousands of phantom companies online with different business names, addresses and phone numbers. The calls to each of these phony firms are eventually all routed back to the SEO company, which sells the customer lead to one of several companies that have agreed in advance to buy such business leads.

As a result, many consumers think they are dealing with one company when they call, yet end up being serviced by a completely unrelated firm that may not have to worry about maintaining a reputation for quality and fair customer service. Continue reading →

Adobe, Microsoft Push Critical Security Fixes

October 14, 2015

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Adobe and Microsoft on Tuesday each released security updates to remedy critical vulnerabilities in their software. Adobe pushed patches to plug at least 56 security holes present in Adobe Reader and Acrobat, as well as a fix for Flash Player that corrects 13 flaws. Separately, Microsoft issued six update bundles to address at least 33 security problems in various versions of Windows, Microsoft Office and other software.

Three of the patches Microsoft issued earned the company’s most dire “critical” rating, meaning they could be exploited by hackers or malware to take complete control over vulnerable systems without any help from users. According to security firm Shavlik, four of the flaws involve vulnerabilities that were publicly disclosed by someone other than Microsoft prior to this week. The implication here is that malware writers may have had a head start figuring out ways to exploit several of these flaws, so it’s probably best not to let too much grass grow under your feet before applying this month’s updates. Continue reading →

Hacker Who Sent Me Heroin Faces Charges in U.S.

October 13, 2015

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A Ukrainian hacker who once hatched a plot to have heroin sent to my Virginia home and then alert police when the drugs arrived had his first appearance in a U.S. court today, after being extradited to the United States to face multiple cybercrime charges.

Sergey Vovnenko, a.k.a. “Fly,” “Flycracker” and “MUXACC1” (muxa is transliterated Russian for “муха” which means “fly”), was set to appear in a Newark courtroom today on charges of stealing and selling credit card and banking data, emptying bank accounts, and running a botnet of more than 12,000 hacked computers and servers, among other alleged crimes.

Fly replies to my direct messages telling him I know his real name and where he lives.

I first became acquainted with Fly in 2013, when his Twitter persona (warning: images here may not be safe for work) began sending me taunting tweets laced with epithets and occasional attempts to get me to click dodgy-looking Web links. Fly also took to his Livejournal blog to post copies of my credit report, directions to my home and pictures of my front door.

After consulting with cybercrime researchers at Russian security firm Group-IB, I learned that Fly was the administrator of a closely-guarded but now-defunct cybercrime forum dedicated to financial fraud called thecc[dot]bz (“cc” is a reference to credit cards).

Not long after that, I secretly gained access to his forum. And none too soon: In one lengthy discussion thread on the forum, I found that Fly had solicited donations from fellow fraudsters on the forum to donate Bitcoin currency for a slush fund Fly created for the express purpose of purchasing heroin off of the Silk Road — which was at the time the leading source of illicit drugs on the Dark Web.

Flycracker discussing the purchase of a gram of heroin from Silk Road seller “10toes.”

Fly’s plan was simple: Have the drugs delivered to my home in my name, and then spoof a call from one of my neighbors to the local police informing them that I was a druggie, that I had druggie friends coming in and out of my house all day long, and that I was even having drugs delivered to my home.

The forum members took care to find the most reputable sellers of heroin on the Silk Road. After purchasing a gram of the stuff from the Silk Road’s top smack seller — a drug dealer who used the nickname “Maestro” — Fly posted the USPS tracking link for the package into the discussion thread on his forum.

An ad for heroin on the Silk Road.

At that point, I called the local police and had a cop come out to take an official police report. The officer asked me to contact him again if the drugs actually arrived. Three days later, our local Postal Service carrier hand delivered a thin USPS Express Mail envelope that was postmarked from Chicago. Inside was another blank envelope containing a May 2013 copy of Chicago Confidential, a weekly glossy magazine from the Chicago Tribune.

On the back of the magazine, taped to a full-page ad for jewelry from LesterLampert, were a baker’s dozen individually wrapped packets emblazoned with the same black and gold skull motif that was on Maestro’s Silk Road ad. I immediately contacted the police, who came and dutifully retrieved the drugs, which turned out to be almost pure heroin.

12 packets of what appears to be heroin arrived at my home via the Silk Road on July 29, 2013.

I wrote about the experience of foiling Fly’s plan in a story titled Mail From the (Velvet) Cybercrime Underground. This did not sit well with Fly, who was made to look bad in front of his forum members who’d contributed roughly two Bitcoins to the scheme.

Angry that I’d foiled his plan to have me arrested for drug possession, Fly had a local florist send a gaudy floral arrangement in the shape of a giant cross to my home, complete with a menacing message that addressed my wife and was signed, “Velvet Crabs.”

The floral arrangement that Fly had delivered to my home in Virginia.

After this incident, I became intensely curious about the identity of this Fly individual, so I began looking through databases of hacked carding and cybercrime forums. My first real break came when Group-IB provided a key piece of the puzzle: Group-IB researchers found that on the now-defunct vulnes[dot]com, Fly maintained an account under the nickname Flycracker, and signed up with the email address mazafaka@libero.it(.it is the country code for Italy).

According to a trusted source in the security community, that email account was somehow compromised in 2013. The source said the account was full of emailed reports from a keylogging device that was tied to another email address — 777flyck777@gmail.com (according to Google, mazafaka@libero.it is the recovery email address for 777flyck777@gmail.com).

Those keylog reports contained some valuable information, and indicated that Fly had planted a keylogger on his then-fiancee Irina’s computer. On several occasions, those emails show Fly’s wife typed in her Gmail address, which included her real first and last name — Irina Gumenyuk. Continue reading →

Arrest of Chinese Hackers Not a First for U.S.

October 13, 2015

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The Washington Post reported last week that the Chinese government has quietly arrested a handful of hackers at the urging of the U.S. government, a move described as “an unprecedented step to defuse tensions with Washington at a time when the Obama administration has threatened economic sanctions.” While this a welcome and encouraging development, it is not the first time Beijing has arrested Chinese hackers in response to pressure from the U.S. government.

Image: Democracynow.org.

The action reported by The Post and other media outlets came shortly before Chinese President Xi Jinping’s state visit to Washington late last month. The hackers arrested had reportedly been identified by U.S. officials as having stolen commercial secrets from U.S. firms to be sold or passed along to Chinese state-run companies.

Although The Post has described this action as unprecedented, U.S. government cybercrime investigators have had success convincing Chinese authorities to take such actions in at least one other case previously.

In a report (PDF) presented to Congress on Feb. 29, 2012, the Office of Inspector General for the National Aeronautics and Space Administration (NASA) noted that a lengthy investigation into the cyber theft of sensitive technical data from its systems culminated in the arrest of a Chinese national in China.

“As a result of an OIG investigation and lengthy international coordination efforts, a
Chinese national was detained in December 2010 by Chinese authorities for violations of
Chinese Administrative Law,” NASA Inspector General Paul K. Martin told a House oversight committee. “This case resulted in the first confirmed detention of a Chinese national for hacking activity targeting U.S. Government agencies. Seven NASA systems, many containing export-restricted technical data, were compromised by the Chinese national.” Continue reading →

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