Krebs on Security

In Damage Control, Sony Targets Reporters

December 15, 2014

Over the weekend I received a nice holiday letter from lawyers representing Sony Pictures Entertainment, demanding that I cease publishing detailed stories about the company’s recent hacking and delete any company data collected in the process of reporting on the breach. While I have not been the most prolific writer about this incident to date, rest assured such threats will not deter this reporter from covering important news and facts related to the breach.

A letter from Sony’s lawyers.

“SPE does not consent to your possession, review, copying, dissemination, publication, uploading, downloading, or making any use of the Stolen information, and to request your cooperation in destroying the Stolen Information,” wrote SPE’s lawyers, who hail from the law firm of Boies, Schiller & Flexner.

This letter reminds me of one that I received several years back from the lawyers of Igor Gusev, one of the main characters in my book, Spam Nation. Mr. Gusev’s attorneys insisted that I was publishing stolen information — pictures of him, financial records from his spam empire “SpamIt” — and that I remove all offending items and publish an apology. My lawyer in that instance called Gusev’s threat a “blivit,” a term coined by the late, great author Kurt Vonnegut, who defined it as “two pounds of shit in a one-pound bag.”

For a more nuanced and scholarly look at whether reporters and bloggers who write about Sony’s hacking should be concerned after receiving this letter, I turn to an analysis by UCLA law professor Eugene Volokh, who posits that Sony “probably” does not have a legal leg to stand on here in demanding that reporters refrain from writing about the extent of SPE’s hacking in great detail. But Volokh includes some useful caveats to this conclusion (and exceptions to those exceptions), notably:

“Some particular publications of specific information in the Sony material might lead to a successful lawsuit,” Volokh writes. “First, disclosure of facts about particular people that are seen as highly private (e.g., medical or sexual information) and not newsworthy might be actionable under the ‘disclosure of private facts’ tort.” Continue reading →

SpamHaus, CloudFlare Attacker Pleads Guilty

December 13, 2014

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A 17-year-old male from London, England pleaded guilty this week to carrying out a massive denial-of-service attack last year against anti-spam outfit SpamHaus and content delivery network CloudFlare, KrebsOnSecurity has learned.

In late March 2013, a massive distributed denial-of-service (DDoS) attack hit the web site of SpamHaus, an organization that distributes a blacklist of spammers to email and network providers. When SpamHaus moved its servers behind CloudFlare, which specializes in blocking such attacks — the attackers pelted CloudFlare’s network. The New York Times called the combined assault the largest known DDoS attack ever on the Internet at the time; for its part, CloudFlare dubbed it “the attack that almost broke the Internet.”

In April 2013, an unnamed then-16-year-old male from London identified only by his hacker alias “Narko,” was arrested and charged with computer misuse and money laundering in connection with the attack.

Sources close to the investigation now tell KrebsOnSecurity that Narko has pleaded guilty to those charges, and that Narko’s real name is Sean Nolan McDonough. A spokesman for the U.K. National Crime Agency confirmed that a 17-year-old male from London had pleaded guilty to those charges on Dec. 10, but noted that “court reporting restrictions are in place in respect to a juvenile offender, [and] as a consequence the NCA will not be releasing further detail.”

During the assault on SpamHaus, Narko was listed as one of several moderators of the forum Stophaus[dot]com, a motley crew of hacktivists, spammers and bulletproof hosting providers who took credit for organizing the attack on SpamHaus and CloudFlare.

WHO RUNS STOPHAUS?

It is likely that McDonough/Narko was hired by someone else to conduct the attack. So, this seems as good a time as any to look deeper into who’s likely the founder and driving force behind the Stophaus movement itself. All signs point to an angry, failed spammer living in Florida who runs an organization that calls itself the Church of Common Good.

Not long after McDonough’s arrest, a new Facebook page went online called “Freenarko,” which listed itself as “a solidarity support group to help in the legal defense and media stability for ‘Narko,’ a 16-yr old brother in London who faces charges concerning the Spamhaus DDoS attack in March.”

Multiple posts on that page link to Stophaus propaganda, to the Facebook page for the Church of the Common Good, and to a now-defunct Web site called “WeAreHomogeneous.org” (an eye-opening and archived copy of the site as it existed in early 2013 is available at archive.org; for better or worse, the group’s Facebook page lives on).

The Church of Common Good lists as its leader a Gulfport, Fla. man named Andrew J. Stephens, whose LinkedIn page says he is a “media mercenary” at the same organization (hours after this story was posted, large chunks of text were deleted from Stephens’ profile; a PDF of the original profile is here).

Stephens’ CV lists a stint in 2012 as owner of an email marketing firm variously called Digital Dollars and IBT Inc, moneymaking schemes which Stephens describes as a “beginner to intermediate level guide to successful list marketing in today’s email environment. It incorporates the use of both white hat and some sketchy techniques you would find on black hat forums, but has avoided anything illegal or unethical…which you would also find on black hat forums.”

More recent entries in Andrew’s LinkedIn profile show that he now sees his current job as a “social engineer.” From his page:

“I am a what you may call a “Social Engineer” and have done work for several information security teams. My most recent operation was with a research team doing propaganda analysis for a media firm. I have a unique ability to access data that is typically inaccessible through social engineering and use this ability to gather data for research purposes. I have a knack for data mining and analysis, but was not formally trained so am able to think outside the box and accomplish goals traditional infosec students could not. I am proficient at strategic planning and vulnerability analysis and am often busy dissecting malware and tracking the criminals behind such software. There’s no real title for what I do, but I do it well I am told.”

Turns out, Andrew J. Stephens used to have his own Web site — andrewstephens.org. Here, the indispensable archive.org helps out again with a cache of his site from back when it launched in 2011 (oddly enough, the same year that Stophaus claims to have been born). On his page, Mr. Stephens lists himself as an “internet entrepreneur” and his business as “IBT.” Under his “Featured Work” heading, he lists “The Stophaus Project,” “Blackhat Learning Center,” and a link to an spamming software tool called “Quick Send v.1.0.”

Stephens did not return requests for comment sent to his various contact addresses, although a combative individual who uses the Twitter handle @Stophaus and has been promoting the group’s campaign refused to answer direct questions about whether he was in fact Andrew J. Stephens.

Continue reading →

‘Security by Antiquity’ Bricks Payment Terminals

December 12, 2014

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Last week, several thousand credit card payment terminals at various retailers across the country suddenly stopped working, their LCD displays showing blank screens instead of numbers and letters. Puzzled merchants began to worry that this was perhaps part of some sophisticated hacker attack on their cash registers. It turns out that the incident was indeed security-related, but for once it had nothing to do with cyber thieves.

Hypercom L4250 payment terminal.

On Dec. 7, 2014, certain older model payment terminals made by Hypercom stopped working due to the expiration of a cryptographic certificate used in the devices, according to Scottsdale, Ariz.-based Equinox Payments, the company that owns the Hypercom brand.

“The security mechanism was triggered by the rollover of the date and not by any attack on or breach of the terminal,” said Stuart Taylor, vice president of payment solutions at Equinox. “The certificate was created in 2004 with a 10 year expiry date.”

Taylor said Equinox is now working with customers, distributors and channel partners to replace the certificate to return terminals to an operational state. The company is pointing affected customers who still need assistance to this certificate expiry help page.

“Many of these terminals have been successfully updated in the field,” Taylor said. “Unfortunately, a subset of them can’t be fixed in the field which means they’ll need to be sent to our repair facility. We are working with our customers and distribution partners to track down where these terminals are and will provide whatever assistance we can to minimize any disruption as a result of this matter.”

According to two different merchants impacted by the incident that reached out to KrebsOnSecurity, the bricking of these payment terminals occurs only after the affected devices (in the 4x version of the terminals) are power-cycled or rebooted, which some merchants do daily.

Michael Rochette, vice president at Spencer Technologies, a Northborough, Mass.-based technology installation and support company, said his firm heard last week from an East Coast supermarket chain that opened for business on Monday morning only to find all of their payment terminals unresponsive. Rochette said that the supermarket chain and other retailers impacted by the incident across the country were immediately worried that the incident was part of a hacker attack on their payment infrastructure.

“Not all stores power cycle overnight, but for those that do, they came up all blank and inoperative,” Rochette said. “If that’s something that a retail chain does as a matter of policy across a whole chain of stores, that can be pretty damaging.” Continue reading →

‘Poodle’ Bug Returns, Bites Big Bank Sites

December 11, 2014

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Many of the nation’s top banks, investment firms and credit providers are vulnerable to a newly-discovered twist on a known security flaw that exposes Web site traffic to eavesdropping. The discovery has prompted renewed warnings from the U.S. Department of Homeland Security advising vulnerable Web site owners to address the flaw as quickly as possible.

In mid-October, the world learned about “POODLE,” an innocuous acronym for a serious security flaw in a specific version (version 3.0) of Secure Sockets Layer (SSL), the technology that most commercial Web sites use to protect the privacy and security of communications with customers.

When you visit a site that begins with “https://” you can be sure that the data that gets transmitted between that site and your browser cannot be read by anyone else. That is, unless those sites are still allowing traffic over SSL 3.0, in which case an attacker could exploit the POODLE bug to decrypt and extract information from inside an encrypted transaction — including passwords, cookies and other data that can be used to impersonate the legitimate user.

On Dec. 8, researchers found that the POODLE flaw also extends to certain versions of a widely used SSL-like encryption standard known as TLS (short for Transport Layer Security).

“The impact of this problem is similar to that of POODLE, with the attack being slightly easier to execute,” wrote Ivan Ristic, director of engineering at security firm Qualys, which made available online a free scanning tool that evaluates Web sites for the presence of the POODLE vulnerability, among other problems. “The main target are browsers, because the attacker must inject malicious JavaScript to initiate the attack.”

A cursory review using Qualys’s SSL/TLS scanning tool indicates that the Web sites for some of the world’s largest financial institutions are vulnerable to the new POODLE bug, including Bank of America, Chase.com, Citibank, HSBC, Suntrust — as well as retirement and investment giants Fidelity.com and Vanguard (click links to see report). Dozens of sites offering consumer credit protection and other services run by Experian also are vulnerable, according to SSL Labs. Qualys estimates that about 10 percent of Web servers are vulnerable to the POODLE attack against TLS. Continue reading →

Microsoft, Adobe Push Critical Security Fixes

December 9, 2014

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If you use Microsoft or Adobe software products, chances are that software is now dangerously out of date. Microsoft today released seven update bundles to fix two dozen security vulnerabilities in Windows and supported software. Adobe pushed patches to correct critical flaws in Acrobat, Reader and Flash Player, including a bug in Flash that already is being exploited.

Four of the seven updates from Microsoft earned a “critical” rating, which means the patches on fix vulnerabilities that can be exploited by malware or attackers to seize control over vulnerable systems without any help from users (save for perhaps visiting a hacked or malicious Web site). One of those critical patches — for Internet Explorer — plugs at least 14 holes in the default Windows browser.

Another critical patch plugs two vulnerabilities in Microsoft Word and Office Web Apps (including Office for Mac 2011). There are actually three patches this month that address Microsoft Office vulnerabilities, including MS14-082 and MS-14-083, both of which are rated “important.” A full breakdown of these and other patches released by Microsoft today is here.

Adobe’s Flash Player update brings the player to v. 16.0.0.235 for Windows and Mac users, and fixes at least six critical bugs in the software. Adobe said an exploit for one of the flaws, CVE-2014-9163, already exists in the wild.

“These updates address vulnerabilities that could potentially allow an attacker to take over the affected system,” the company said in its advisory. Continue reading →

Unencrypted Data Lets Thieves ‘Charge Anywhere’

December 9, 2014

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Charge Anywhere LLC, a mobile payments provider, today disclosed that malicious software planted on its networks may have jeopardized credit card data from transactions the company handled between November 2009 and September 2014.

In a statement released today, the South Plainfield, N.J. electronic payment provider said it launched investigation after receiving complaints about fraudulent charges on cards that had been legitimately used at certain merchants. The information stolen includes the customer name, card number, expiration date and verification code.

“The investigation revealed that an unauthorized person initially gained access to the network and installed sophisticated malware that was then used to create the ability to capture segments of outbound network traffic,” the company explained. “Much of the outbound traffic was encrypted. However, the format and method of connection for certain outbound messages enabled the unauthorized person to capture and ultimately then gain access to plain text payment card transaction authorization requests.” Continue reading →

More on Wiretapping ATM Skimmers

December 9, 2014

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Last month, this blog featured a story about an innovation in ATM skimming known as wiretapping, which I said involves a “tiny” hole cut in the ATM’s front through which thieves insert devices capable of eavesdropping on and recording the ATM user’s card data. Turns out, the holes the crooks make to insert their gear tend to be anything but tiny.

Not long after that post went live, I heard from the folks at NCR, one of the world’s largest cash machine manufacturers. NCR had put out a bulletin on the emergence of this very threat in Sept. 2014, saying the activity had first been spotted in the United Kingdom against NCR 5877 and 5887 models.

As I noted in my original story, the attackers use a plastic decal to cover up the hole, but NCR’s photos of one ATM compromised by this method offer a better look at what’s going on here. Take a look at the size of that hole:

A hole left by crooks who added “wiretapping” or “eavesdropping” theft devices to a compromised ATM. Image: NCR.

“In this attack, the ATM fascia is penetrated close to the card reader to create a hole large enough for the attacker to reach inside the ATM and place a tap directly onto the card reader in order to skim card data as it is read by the ATM,” NCR said in an advisory it produced on the increasingly common attacks.

According to NCR, the emergence of this type of skimming attack is a response to the widespread availability of third party anti-skimming technology which is successful at preventing the operation of a traditional skimmer, placed on the outside of the ATM.

“Card reader eavesdropping skimmers are placed in a location that third party anti-skimming technology necessarily cannot protect, since the ATM must be capable of reading the card,” the advisory notes. “This [technique] has previously been seen in Ireland and the Netherlands, and can be expected to grow as traditional skimming is prevented.”

NCR observed that crooks employing this attack are using a variety of methods to create the hole in the front of the ATM. Modern ATMs often now include sensors that can detect vibrations consistent with drilling or cutting tools, so some thieves have taken to melting the ATM fascia in some cases.

“Melting techniques have been observed which can circumvent seismic anti-drilling sensors,” NCR said.

If the idea of ATM bandits taking a blowtorch to the cash machine sounds extreme, at least they’re not trying to blow the ATM to smithereens. According to quarterly reports from the European ATM Security Team (EAST), ATM attacks in which the fraudsters attempt to blast open the machine with explosive gas are on the rise. Continue reading →

Toward a Breach Canary for Data Brokers

December 8, 2014

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When a retailer’s credit card systems get breached by hackers, banks usually can tell which merchant got hacked soon after those card accounts become available for purchase at underground cybercrime shops. But when companies that collect and sell sensitive consumer data get hacked or are tricked into giving that information to identity thieves, there is no easy way to tell who leaked the data when it ends up for sale in the black market. In this post, we’ll examine one idea to hold consumer data brokers more accountable.

Some of the biggest retail credit card breaches of the past year — including the break-ins at Target and Home Depot — were detected by banks well before news of the incidents went public. When cards stolen from those merchants go up for sale on underground cybercrime shops, the banks often can figure out which merchant got hacked by acquiring a handful of their cards and analyzing the customer purchase history of those accounts. The merchant that is common to all stolen cards across a given transaction period is usually the breached retailer.

Sadly, this process of working backwards from stolen data to breach victim generally does not work in the case of breached data brokers that trade in Social Security information and other data, because too often there are no unique markers in the consumer data that would indicate from where the information was obtained.

Even in the handful of cases where underground crime shops selling consumer personal data have included data points in the records they sell that would permit that source analysis, it has taken years’ worth of very imaginative investigation by law enforcement to determine which data brokers were at fault. In Nov. 2011, I wrote about an identity theft service called Superget[dot]info, noting that “each purchasable record contains a two- to three-letter “sourceid,” which may provide clues as to the source of this identity information.”

Unfortunately, the world didn’t learn the source of that ID theft service’s data until 2013, a year after U.S. Secret Service agents arrested the site’s proprietor — a 24-year-old from Vietnam who was posing as a private investigator based in the United States. Only then were investigators able to determine that the source ID data matched information being sold by a subsidiary of big-three credit bureau Experian (among other data brokers that were selling to the ID theft service). But federal agents made that connection only after an elaborate investigation that lured the proprietor of that shop out of Vietnam and into a U.S. territory.

Meanwhile, during the more than six years that this service was in operation, Superget.info attracted more than 1,300 customers who paid at least $1.9 million to look up Social Security numbers, dates of birth, addresses, previous addresses, email addresses and other sensitive information on consumers, much of it used for new account fraud and tax return fraud.

Investigators got a lucky break in determining the source of another ID theft service that was busted up and has since changed its name (more on that in a moment). That service — known as “ssndob[dot]ru” — was the service used by exposed[dot]su, a site that proudly displayed the Social Security, date of birth, address history and other information on dozens of Hollywood celebrities, as well as public officials such as First Lady Michelle Obama, then FBI Director Robert Mueller, and CIA Director John Brennan.

As I explained in a 2013 exclusive, civilian fraud investigators working with law enforcement gained access to the back-end server that was being used to handle customer requests for consumer information. That database showed that the site’s 1,300 customers had spent hundreds of thousands of dollars looking up SSNs, birthdays, drivers license records, and obtaining unauthorized credit and background reports on more than four million Americans.

Although four million consumer records may seem like a big number, that figure did not represent the total number of consumer records available through ssndob[dot]ru. Rather, four million was merely the number of consumer records that the service’s customers had paid the service to look up. In short, it appeared that the ID theft service was drawing on active customer accounts inside of major consumer data brokers.

Investigators working on that case later determined that the same crooks who were running ssndob[dot]ru also were operating a small, custom botnet of hacked computers inside of several major data brokers, including LexisNexis, Dun & Bradstreet, and Kroll. All three companies acknowledged infections from the botnet, but shared little else about the incidents.

Despite their apparent role in facilitating (albeit unknowingly) these ID theft services, to my knowledge the data brokers involved have never been held publicly accountable in any court of law or by Congress.

CURRENT ID THEFT SERVICES

At present, there are multiple shops in the cybercrime underground that sell everything one would need to steal someone’s identity in the United States or apply for new lines of credit in their name — including Social Security numbers, addresses, previous addresses, phone numbers, dates of birth, and in some cases full credit history. The price of this information is shockingly low — about $3 to $5 per record.

KrebsOnSecurity conducted an exhaustive review of consumer data on sale at some of the most popular underground cybercrime sites. The results show that personal information on some of the most powerful Americans remains available for just a few dollars. And of course, if one can purchase this information on these folks, one can buy it on just about anyone in the United States today.

As an experiment, this author checked two of the most popular ID theft services in the underground for the availability of Social Security numbers, phone numbers, addresses and previous addresses on all members of the Senate Commerce Committee‘s Subcommittee on Consumer Protection, Product Safety and Insurance. That data is currently on sale for all thirteen Democrat and Republican lawmakers on the panel.

Between these two ID theft services, the same personal information was for sale on Edith Ramirez and Richard Cordray, the heads of the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB), respectively. Continue reading →

Treasury Dept: Tor a Big Source of Bank Fraud

December 5, 2014

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A new report from the U.S. Treasury Department found that a majority of bank account takeovers by cyberthieves over the past decade might have been thwarted had affected institutions known to look for and block transactions coming through Tor, a global communications network that helps users maintain anonymity by obfuscating their true location online.

The findings come in a non-public report obtained by KrebsOnSecurity that was produced by the Financial Crimes Enforcement Network (FinCEN), a Treasury Department bureau responsible for collecting and analyzing data about financial transactions to combat domestic and international money laundering, terrorist financing and other financial crimes.

In the report, released on Dec. 2, 2014, FinCEN said it examined some 6,048 suspicious activity reports (SARs) filed by banks between August 2001 and July 2014, searching the reports for those involving one of more than 6,000 known Tor network nodes. Investigators found 975 hits corresponding to reports totaling nearly $24 million in likely fraudulent activity.

“Analysis of these documents found that few filers were aware of the connection to Tor, that the bulk of these filings were related to cybercrime, and that Tor related filings were rapidly rising,” the report concluded. “Our BSA [Bank Secrecy Act] analysis of 6,048 IP addresses associated with the Tor darknet [link added] found that in the majority of the SAR filings, the underlying suspicious activity — most frequently account takeovers — might have been prevented if the filing institution had been aware that their network was being accessed via Tor IP addresses.”

Tables from the FinCEN report.

FinCEN said it was clear from the SAR filings that most financial institutions were unaware that the IP address where the suspected fraudulent activity occurred was in fact a Tor node.

“Our analysis of the type of suspicious activity indicates that a majority of the SARs were filed for account takeover or identity theft,” the report noted. “In addition, analysis of the SARs filed with the designation ‘Other revealed that most were filed for ‘Account Takeover,’ and at least five additional SARs were filed incorrectly and should have been ‘Account Takeover.'”

The government also notes that there has been a fairly recent and rapid rise in the number of SAR filings over the last year involving bank fraud tied to Tor nodes.

“From October 2007 to March 2013, filings increased by 50 percent,” the report observed. “During the most recent period — March 1, 2013 to July 11, 2014 — filings rose 100 percent.” Continue reading →

Bebe Stores Confirms Credit Card Breach

December 5, 2014

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In a statement released this morning, women’s clothier chain bebe stores inc. confirmed news first reported on this blog Thursday: That hackers had stolen customer card data from stores across the country in a breach that persisted for several weeks last month.

Image: Wikipedia.

Bebe stores said its investigation indicates that the breach impacted payment cards swiped in its U.S., Puerto Rico and U.S. Virgin Islands stores between Nov. 8, 2014 and Nov. 26, 2014. The data may have included cardholder name, account number, expiration date, and verification code.

The company emphasized that purchases made though its web site, mobile site/application, or in Canada or other international stores were not affected, and that customers should feel confident in continuing to use their payment cards in bebe stores.

“Our relationship with our customers is of the highest importance,” said bebe CEO Jim Wiggett, in a statement. “We moved quickly to block this attack and have taken steps to further enhance our security measures.”

Predictably, bebe stores is offering free credit monitoring services for one year to customers impacted by this incident, even though credit monitoring services do nothing to help consumers block fraud on existing accounts — such as credit and debit card accounts that may have been stolen in this breach.
Consumers still need to keep a close eye on monthly statements, and report any unauthorized charges as quickly as possible. Continue reading →

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