Krebs on Security

Java Update: Patch It or Pitch It

July 15, 2014

Oracle today released a security update for its Java platform that addresses at least 20 vulnerabilities in the software. Collectively, the bugs fixed in this update earned Oracle’s “critical” rating, meaning they can be exploited over a network without the need for a username and password. In short, if you have Java installed it is time to patch it or pitch it.

The latest update for Java 7 (the version most users will have installed) brings the program to Java 7 Update 65. Those who’ve chosen to upgrade to the newer, “feature release” version of Java — Java 8 — will find fixes available in Java 8 Update 11.

According to Oracle, at least 8 of the 20 security holes plugged in this release earned a Common Vulnerability Scoring System (CVSS) rating of 9.0 or higher (with 10 being the most severe). Oracle says vulnerabilities with 9.x CVSS score are those which can be easily exploited remotely and without authentication, and which result in the complete compromise of the host operating system. Continue reading →

Beware Keyloggers at Hotel Business Centers

July 14, 2014

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The U.S. Secret Service is advising the hospitality industry to inspect computers made available to guests in hotel business centers, warning that crooks have been compromising hotel business center PCs with keystroke-logging malware in a bid to steal personal and financial data from guests.

A DHS/Secret Service advisory dated July 10, 2014.

In a non-public advisory distributed to companies in the hospitality industry on July 10, the Secret Service and the Department of Homeland Security’s National Cybersecurity and Communications Integration Center (NCCIC) warned that a task force in Texas recently arrested suspects who have compromised computers within several major hotel business centers in the Dallas/Fort Worth areas.

“In some cases, the suspects used stolen credit cards to register as guests of the hotels; the actors would then access publicly available computers in the hotel business center, log into their Gmail accounts and execute malicious key logging software,” the advisory reads.

“The keylogger malware captured the keys struck by other hotel guests that used the business center computers, subsequently sending the information via email to the malicious actors’ email accounts,” the warning continues. “The suspects were able to obtain large amounts of information including other guests personally identifiable information (PII), log in credentials to bank, retirement and personal webmail accounts, as well as other sensitive data flowing through the business center’s computers.”

The advisory lists several basic recommendations for hotels to help secure public computers, such as limiting guest accounts to non-administrator accounts that do not have the ability to install or uninstall programs. This is a good all-purpose recommendation, but it won’t foil today’s keyloggers and malware — much of which will happily install on a regular user account just as easily as on an administrative one.

While there are a range of solutions designed to wipe a computer clean of any system changes after the completion of each user’s session (Steady State, Clean Slate, et. al), most such security approaches can be defeated if users also are allowed to insert CDs or USB-based Flash drives (and few hotel business centers would be in much demand without these features on their PCs). Continue reading →

Crooks Seek Revival of ‘Gameover Zeus’ Botnet

July 10, 2014

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Cybercrooks today began taking steps to resurrect the Gameover ZeuS botnet, a complex crime machine that has been blamed for the theft more than $100 million from banks, businesses and consumers worldwide. The revival attempt comes roughly five weeks after the FBI joined several nations, researchers and security firms in a global and thus far successful effort to eradicate it.

The researchers who helped dismantle Gameover Zeus said they were surprised that the botmasters didn’t fight back. Indeed, for the past month the crooks responsible seem to have kept a low profile.

But that changed earlier this morning when researchers at Malcovery [full disclosure: Malcovery is an advertiser on this blog] began noticing spam being blasted out with phishing lures that included zip files booby-trapped with malware.

Looking closer, the company found that the malware shares roughly 90 percent of its code base with Gameover Zeus. Part of what made the original GameOver ZeuS so difficult to shut down was its reliance in part on an advanced peer-to-peer (P2P) mechanism to control and update the bot-infected systems.

But according to Gary Warner, Malcovery’s co-founder and chief technologist, this new Gameover variant is stripped of the P2P code, and relies instead on an approach known as fast-flux hosting. Fast-flux is a kind of round-robin technique that lets botnets hide phishing and malware delivery sites behind an ever-changing network of compromised systems acting as proxies, in a bid to make the botnet more resilient to takedowns. Continue reading →

Interview With Fresh Air’s Terry Gross

July 10, 2014

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On Monday, I had the distinct pleasure of being a guest on Terry Gross‘s Fresh Air radio show on National Public Radio. I’m a huge fan of Gross’s show and was quite flattered and honored to have been invited.

The roughly 39-minute interview covered a range of topics, including my reporting on the Target and Neiman Marcus breaches, as well as an investigation into how an identity theft service conned its way into getting access to a subsidiary of big three credit bureau Experian.

Gross also asked about some of the responses that my reporting has engendered from various denizens of the cybercrime underground, hence the title of the segment, “The Hazards of Probing the Internet’s Dark Side.”

The archived podcast of the show is available here.

Pre-order Your Copy of ‘Spam Nation’ Now!

July 9, 2014

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Some of you may have noticed that a new element recently debuted in the sidebar: The cover art for my upcoming book, Spam Nation, due to hit bookshelves (physical and virtual) November 18, 2014. Please allow me a few moments to explain what this book is about, and why you should pre-order it today.

The back of Spam Nation. Click to enlarge.

Spam Nation delves deeper than perhaps any other publication into the workings of the cybercrime underground, giving readers unprecedented access to a well-hidden world that few outside of these communities have seen up close.

Update, Dec. 9, 2014: Spam Nation has just landed on the New York Times bestseller list!

Original post:

The backdrop of the story is a long-running turf war between two of the largest sponsors of spam. A true-crime tale of political corruption and ill-fated alliances, tragedy, murder and betrayal, this book explains how the conditions that gave rise to this pernicious industry still remain and are grooming a new class of cybercriminals.

But Spam Nation isn’t just about junk email; most of the entrepreneurs building and managing large-scale spam operations are involved in virtually every aspect of cybercrime for which there is a classification, including malware development, denial-of-service attacks, identity theft, credit card fraud, money laundering, commercial data breaches and extortion.

Spam Nation looks at the crucial role played by cybercrime forums, and how these communities simultaneously weave the social fabric of the underground while protecting scam artists from getting scammed.

The book also includes a detailed history of the Russian Business Network (RBN); how it became the virtual boogeyman of the Internet and prefigured an entire industry of “bulletproof” hosting providers.

Along the way, we meet numerous buyers who explain what motivated them to respond to spam and ingest pills ordered from shadowy online marketers. In the chapter “Meet the Spammers,” readers get a closer look at the junk emailers responsible for running the world’s largest botnets.

In addition, Spam Nation includes first-hand accounts of efforts by vigilante groups to dismantle spam and malware operations, and the vicious counterattacks that these campaigns provoked from the spam community.

Now, here’s the important bit: Anyone who pre-orders the book and emails their proof-of-purchase to this address before Nov. 18, 2014 will receive a signed copy. This extends even to those who opt for a digital copy of the book. That’s because the signature will come on a bookplate, which is simply a decorative label that is affixed to the inside front cover. Bookplates allow my publisher Sourcebooks to distribute signed copies of Spam Nation without having to constantly ship me very heavy truckloads of books to sign and then ship back again for reshipment.

The pre-order link for Amazon is here; readers who wish to purchase the book from Barnes & Noble can do so here. Fans of the Washington D.C. literary landmark Politics and Prose can pre-order the book from them at this link. Forward your emailed proof-of-purchase, or a scan/photo of your receipt. Basically anything that says you purchased the book, the quantity purchased, as well as your name and mailing address. Continue reading →

Microsoft, Adobe Push Critical Fixes

July 8, 2014

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If you use Microsoft products or Adobe Flash Player, please take a moment to read this post and update your software. Adobe today issued a critical update that plugs at least three security holes in the program. Separately, Microsoft released six security updates that address 29 vulnerabilities in Windows and Internet Explorer.

Most of the bugs that Microsoft addressed with today’s updates (24 of the 29 flaws) are fixed in a single patch for the company’s Internet Explorer browser. According to Microsoft, one of those 24 flaws (a weakness in the way IE checks Extended Validation SSL certificates) was already publicly disclosed prior to today’s bulletins.

The other critical patch fixes a security problem with the way that Windows handles files meant to be opened and edited by Windows Journal, a note-taking application built in to more recent versions of the operating system (including Windows Vista, 7 and 8).

More details on the rest of the updates that Microsoft released today can be found at Microsoft’s Technet blog, Qualys’s site, and the SANS Internet Storm Center.

Adobe’s Flash Player update brings Flash to version 14.0.0.145 on Windows, Mac and Linux systems. Adobe said it is not aware of exploits in the wild for any of the vulnerabilities fixed in this release.

To see which version of Flash you have installed, check this link. IE10/IE11 on Windows 8.x and Chrome should auto-update their versions of Flash, although my installation of Chrome says it is up-to-date and yet is still running v. 14.0.0.125.

Flash has a built-in auto-updater, but you might wait days or weeks for it to prompt you to update, regardless of its settings. The most recent versions of Flash are available from the Adobe download center, but beware potentially unwanted add-ons, like McAfee Security Scan. To avoid this, uncheck the pre-checked box before downloading, or grab your OS-specific Flash download from here.

Windows users who browse the Web with anything other than Internet Explorer may need to apply this patch twice, once with IE and again using the alternative browser (Firefox, Opera, e.g.). If you have Adobe AIR installed (required by some programs like Tweetdeck and Pandora Desktop), you’ll want to update this program. AIR ships with an auto-update function that should prompt users to update when they start an application that requires it; the newest, patched version is v. 14.0.0.137 for Windows, Mac, and Android.

Feds Charge Carding Kingpin in Retail Hacks

July 8, 2014

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The U.S. Justice Department on Monday announced the arrest of a Russian hacker accused of running a network of online crime shops that sold credit and debit card data stolen in breaches at restaurants and retailers throughout the United States.

The government alleges that the hacker known in the underground as “nCux” and “Bulba” was Roman Seleznev, a 30-year-old Russian citizen who was recently arrested by the U.S. Secret Service.

Seleznev was initially identified by the government in 2012, when it named him as part of a conspiracy involving more than three dozen popular merchants on carder[dot]su, a bustling fraud forum where Bulba and other members openly marketed various cybercrime-oriented services.

According to Seleznev’s own indictment, which was filed in 2011 but made public this week, he was allegedly part of a group that hacked into restaurants between 2009 and 2011 and planted malicious software to steal card data from store point-of-sale devices.

The indictment further alleges that Seleznev and unnamed accomplices used his online monikers to sell stolen credit and debit cards at bulba[dot]cc and track2[dot]name. Customers of these services paid for their cards with virtual currencies, including WebMoney and Bitcoin. As explained in the screen shot below, the track2[dot]name site stopped accepting new members in 2011, and new applicants were directed to bulba[dot]cc, which claimed to be an authorized reseller.

Bulba[dot]cc, as it looked in May 2011.

Recently, however, track2[dot]name began accepting new members who agreed to pay up-front deposits. The deposits ranged from one bitcoin (about $624 USD) for a basic account, to 20 bitcoins (roughly $12,484 USD) for a “corporate” account that is eligible for generous volume discounts and lengthy replacement times for purchased cards that turn out later to be canceled by issuing banks. Continue reading →

The Rise of Thin, Mini and Insert Skimmers

July 7, 2014

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Like most electronic gadgets these days, ATM skimmers are getting smaller and thinner, with extended battery life. Here’s a look at several miniaturized fraud devices that were pulled from compromised cash machines at various ATMs in Europe so far this year.

According to a new report from the European ATM Security Team (EAST), a novel form of mini-skimmer was reported by one country. Pictured below is a device designed to capture the data stored on an ATM card’s magnetic stripe as the card is inserted into the machine. While most card skimmers are made to sit directly on top of the existing card slot, these newer mini-skimmers fit snugly inside the card reader throat, obscuring most of the device. This card skimmer was made to fit inside certain kinds of cash machines made by NCR.

A mini-skimmer designed to slip inside of an NCR ATM’s card acceptance slot. Image: EAST.

“New versions of insert skimmers (skimmers placed inside the card reader throat) are getting harder to detect,” the EAST report concludes.

The miniaturized insert skimmer above was used in tandem with a tiny spy camera to record each customer’s PIN. The image on the left shows the hidden camera situated just to the left of the large square battery; the photo on the right shows the false ATM fascia that obscures the hidden camera as it was found attached to the compromised ATM (notice the tiny pinhole at the top left edge of the device).

The hidden camera used in tandem with the insert skimmer. Source: EAST.

EAST notes that the same country which reported discovering the skimmer devices above also found an ATM that was compromised by a new type of translucent insert skimmer, pictured below.

A translucent mini-skimmer made to sit (mostly) inside of an ATM’s card acceptance slot. Source: EAST.

Continue reading →

Brazilian ‘Boleto’ Bandits Bilk Billions

July 2, 2014

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With the eyes of the world trained on Brazil for the 2014 FIFA World Cup, it seems a fitting time to spotlight a growing form of computer fraud that’s giving Brazilian banks and consumers a run for their money. Today’s post looks at new research into a mostly small-time cybercrime practice that in the aggregate appears to have netted thieves the equivalent of billions of dollars over the past two years.

A boleto.

At issue is the “boleto” (officially “Boleto Bancario”), a popular payment method in Brazil that is used by consumers and for most business-to-business payments. Brazilians can use boletos to complete online purchases via their bank’s Web site, but unlike credit card payments — which can be disputed and reversed — payments made via boletos are not subject to chargebacks and can only be reverted by bank transfer.

Brazil has an extremely active and talented cybercrime underground, and increasingly Brazilian organized crime gangs are setting their sights on boleto users who bank online. This is typically done through malware that lies in wait until the user of the hacked PC visits their bank’s site and fills out the account information for the recipient of a boleto transaction. In this scenario, the unwitting victim submits the transfer for payment and the malware modifies the request by substituting a recipient account that the attackers control.

Many of the hijacked boleto transactions are low-dollar amounts, but in the aggregate these purloined payments can generate an impressive income stream for even a small malware gang. On Tuesday, for example, a source forwarded me a link to a Web-based control panel for a boleto-thieving botnet (see screenshot below); in this operation, we can see that the thieves had hijacked some 383 boleto transactions between February 2014 and the end of June, but had stolen the equivalent of nearly USD $250,000 during that time.

The records kept by a boleto-stealing botnet. Next to the date and time is the account of the intended recipient of the transfer; the “linha alterada” column shows the accounts used by the thieves to accept diverted payments. “Valor” refers to the amount, expressed in Brazilian Real.

But a recent discovery by researchers at RSA, the security division of EMC, exposes far more lucrative and ambitious boleto banditry. RSA says the fraud ring it is tracking — known as the “Bolware” operation — affects more than 30 different banks in Brazil, and may be responsible for up to $3.75 billion USD in losses. RSA arrived at this estimate based on the discovery of a similar botnet control panel that tracked nearly a half-million fraudulent transactions. Continue reading →

Microsoft Darkens 4MM Sites in Malware Fight

July 1, 2014

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Millions of Web sites were shuttered Monday morning after Microsoft executed a legal sneak attack against a malware network thought to be responsible for more than 7.4 million infections of Windows PCs worldwide.

A diagram showing how crooks abused no-ip.com’s services to control malware networks. Source: Microsoft.

In its latest bid to harness the power of the U.S. legal system to combat malicious software and cybercrooks, Microsoft convinced a Nevada court to grant the software giant authority over nearly two dozen domains belonging to no-ip.com, a company that provides dynamic domain name services.

Dynamic DNS services are used to map domain names to numeric Internet address that may change frequently. Typically, the biggest users of dynamic DNS services are home Internet users who wish to have a domain name that will always point back to their home computer, no matter how many times their ISP changes the numeric Internet address assigned to that computer.

In this case, however, the attackers responsible for leveraging two malware families — remote-access Trojans known as “njrat” and “njw0rm” — were using no-ip.com’s services to guarantee that PCs they infected would always be able to reach the Internet servers.

Microsoft told the court that miscreants who were using these two malware strains were leveraging more than 18,400 hostnames that belonged to no-ip.com. On June 26, the court granted Microsoft the authority to temporarily seize control over 23 domains owned by no-ip.com — essentially all of the domains that power no-ip.com’s free dynamic DNS services.

Microsoft was supposed to filter out the traffic flowing to and from those 18,400+ hostnames, and allow the remaining, harmless traffic to flow through to its rightful destination. But according to no-ip.com marketing manager Natalie Goguen, that’s not at all what happened.

“They made comments that they’d only taken down bad hostnames and were supposedly redirecting all good traffic through to users, but it’s not happening, and they’re not able to handle our traffic volumes,” Goguen said. “Many legitimate users that use our services have been down all day.”

Goguen said while Microsoft claimed that there were more than 18,000 malicious hostnames involved, no-ip.com could only find a little more than 2,000 from that list that were still active as of Monday morning. Meanwhile, some four million hostnames remain offline, with customer support requests piling up.

“So, to go after 2,000 or so bad sites, [Microsoft] has taken down four million,” Goguen said. Continue reading →

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