Krebs on Security

An Allegation of Harm

April 21, 2014

In December 2013, an executive from big-three credit reporting bureau Experian told Congress that the company was not aware of any consumers who had been harmed by an incident in which a business unit of Experian sold consumer records directly to an online identity theft service for nearly 10 months. This blog post examines the harm allegedly caused to consumers by just one of the 1,300 customers of that ID theft service — an Ohio man the government claims used the data to file fraudulent tax returns on dozens of Americans last year.

Defendant Lance Ealy.

In February, I was contacted via Facebook by 28-year-old Lance Ealy from Dayton, Ohio. Mr. Ealy said he needed to speak with me about the article I wrote in October 2013 — Experian Sold Consumer Data to ID Theft Service. Ealy told me he’d been arrested by the U.S. Secret Service on Nov. 25, 2013 for allegedly using his email account to purchase Social Security numbers and other personal information from an online identity theft service run by guy named Hieu Minh Ngo.

“I really need to speak with u about this case because the US attorney assigned to this case and the Secret Service agent are trying to cover up Experian involvement in this case,” Ealy said, without elaborating on his theory about the alleged cover-up.

Ngo is a Vietnamese national who for several years ran an online identity theft service called Superget.info. Shortly after my 2011 initial story about his service, Ngo tauntingly renamed his site to findget.me. The Secret Service took him up on that challenge, and succeeded in luring him out of Vietnam into Guam, where he was arrested and brought to New Hampshire for trial. He pleaded guilty earlier this year to running the ID theft service, and the government has been working on rounding up his customers ever since.

Mr. Ealy appears to be one of several individuals currently battling charges of identity theft after allegedly buying data from Ngo’s service, which relied in part on data obtained through a company owned by Experian.

According to the complaint (PDF) against Ealy, government investigators obtained a search warrant for Ngo’s email account in March 2013. Going through that email, investigators found that a customer of Ngo’s who used the address lanceealy123@yahoo.com had already purchased from Ngo some 363 “fullz” — a term used in the underground to describe a package of everything one would need to steal someone’s identity, including their Social Security number, mother’s maiden name, birth date, address, phone number, email address, bank account information and passwords.

The Justice Department alleges that between Jan. 28, 2013 and Oct. 17, 2013, Ealy filed at least 150 fraudulent tax returns on Americans, instructing the IRS to send the refund money to prepaid credit card accounts he controlled. The government claims that about 50 of those bogus claims were made with Social Security numbers and other data obtained from Ngo’s ID theft service. Continue reading →

3 Million Customer Credit, Debit Cards Stolen in Michaels, Aaron Brothers Breaches

April 17, 2014

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Nationwide arts and crafts chain Michaels Stores Inc. said today that two separate eight-month-long security breaches at its stores last year may have exposed as many as 3 million customer credit and debit cards.

The disclosure, made jointly in a press release posted online and in a statement on the company’s Web site, offers the first real details about the breach since the incident was first disclosed by KrebsOnSecurity on January 25, 2014.

The statements by Irving, Texas-based Michaels suggest that the two independent security firms it hired to investigate the break-ins initially found nothing.

“After weeks of analysis, the Company discovered evidence confirming that systems of Michaels stores in the United States and its subsidiary, Aaron Brothers, were attacked by criminals using highly sophisticated malware that had not been encountered previously by either of the security firms,” the statement reads.

The Michaels breach first came to light just weeks after retail giant Target Corp. said that cyber thieves planted malware on cash registers at its stores across the nation, stealing more than 40 million credit and debit card numbers between Nov. 27 and Dec. 15, 2013. That malware was designed to siphon card data when customers swiped their cards at the cash register.

According to Michaels, the affected systems contained certain payment card information, such as payment card number and expiration date, about both Michaels and Aaron Brothers customers. The company says there is no evidence that other customer personal information, such as name, address or debit card PIN, was at risk in connection with this issue.

The company’s statement says the attack on Michaels’ targeted “a limited portion of the point-of-sale systems at a varying number of stores between May 8, 2013 and January 27, 2014.”

“Only a small percentage of payment cards used in the affected stores during the times of exposure were impacted by this issue,” the statement continues. “The analysis conducted by the security firms and the Company shows that approximately 2.6 million cards may have been impacted, which represents about 7% of payment cards used at Michaels stores in the U.S. during the relevant time period. The locations and potential dates of exposure for each affected Michaels store are listed on www.michaels.com.”

Regarding Aaron Brothers, Michaels Stores said it has confirmed that between June 26, 2013 and February 27, 2014, 54 Aaron Brothers stores were affected by this malware, noting that the locations for each affected Aaron Brothers store are listed on www.aaronbrothers.com.

“The Company estimates that approximately 400,000 cards were potentially impacted during this period. The Company has received a limited number of reports from the payment card brands and banks of fraudulent use of payment cards potentially connected to Michaels or Aaron Brothers.” Continue reading →

Critical Java Update Plugs 37 Security Holes

April 16, 2014

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Oracle has pushed a critical patch update for its Java SE platform that fixes at least 37 security vulnerabilities in the widely-installed program. Several of these flaws are so severe that they are likely to be exploited by malware or attackers in the days or weeks ahead. So — if you have Java installed — it is time to update (or to ditch the program once and for all).

The latest update for Java 7 (the version most users will have installed) brings the program to Java 7 Update 55. Those who’ve chosen to upgrade to the newer, “feature release” version of Java — Java 8 — will find fixes available in Java 8 Update 5 (Java 8 doesn’t work on Windows XP).

According to Oracle, at least four of the 37 security holes plugged in this release earned a Common Vulnerability Scoring System (CVSS) rating of 10.0 — the most severe possible. According to Oracle, vulnerabilities with a 10.0 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 →

Hardware Giant LaCie Acknowledges Year-Long Credit Card Breach

April 15, 2014

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Computer hard drive maker LaCie has acknowledged that a hacker break-in at its online store exposed credit card numbers and contact information on customers for the better part of the past year. The disclosure comes almost a month after the breach was first disclosed by KrebsOnSecurity.

On Mar. 17, 2014, this blog published evidence showing that the Web storefront for French hardware giant LaCie (now owned by Seagate) had been compromised by a group of hackers that broke into dozens of online stores using security vulnerabilities in Adobe’s ColdFusion software. In response, Seagate said it had engaged third-party security firms and that its investigation was ongoing, but that it had found no indication that any customer data was compromised.

The Lacie.com Web site as listed in the control panel of a botnet of hacked ecommerce sites.

In a statement sent to this reporter on Monday, however, Seagate allowed that its investigation had indeed uncovered a serious breach. Seagate spokesman Clive J. Over said the breach may have exposed credit card transactions and customer information for nearly a year beginning March 27, 2013. From his email:

“To follow up on my last e-mail to you, I can confirm that we did find indications that an unauthorized person used the malware you referenced to gain access to information from customer transactions made through LaCie’s website.”

“The information that may have been accessed by the unauthorized person includes name, address, email address, payment card number and card expiration date for transactions made between March 27, 2013 and March 10, 2014. We engaged a leading forensic investigation firm, who conducted a thorough investigation into this matter. As a precaution, we have temporarily disabled the e-commerce portion of the LaCie website while we transition to a provider that specializes in secure payment processing services. We will resume accepting online orders once we have completed the transition.”

Security and data privacy are extremely important to LaCie, and we deeply regret that this happened. We are in the process of implementing additional security measures which will help to further secure our website. Additionally, we sent notifications to the individuals who may have been affected in order to inform them of what has transpired and that we are working closely and cooperatively with the credit card companies and federal authorities in their ongoing investigation.

It is unclear how many customer records and credit cards may have been accessed during the time that the site was compromised; Over said in his email that the company did not have any additional information to share at this time. Continue reading →

Crimeware Helps File Fraudulent Tax Returns

April 14, 2014

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Many companies believe that if they protect their intellectual property and customers’ information, they’ve done a decent job of safeguarding their crown jewels from attackers. But in an increasingly common scheme, cybercriminals are targeting the Human Resources departments at compromised organizations and rapidly filing fraudulent federal tax returns on all employees.

Last month, KrebsOnSecurity encountered a Web-based control panel that an organized criminal gang has been using to track bogus tax returns filed on behalf of employees at hacked companies whose HR departments had been relieved of W2 forms for all employees.

An obfuscated look at the he control panel for a tax fraud operation involving more than a half dozen victim organizations.

According to the control panel seen by this reporter, the scammers in charge of this scheme have hacked more than a half-dozen U.S. companies, filing fake tax returns on nearly every employee. At last count, this particular scam appears to stretch back to the beginning of this year’s tax filing season, and includes fraudulent returns filed on behalf of thousands of people — totaling more than $1 million in bogus returns.

The control panel includes a menu listing every employee’s W2 form, including all data needed to successfully file a return, such as the employee’s Social Security number, address, wages and employer identification number. Each fake return was apparently filed using the e-filing service provided by H&R Block, a major tax preparation and filing company. H&R Block did not return calls seeking comment for this story.

The “drops” page of this tax fraud operation lists the nicknames of the co-conspirators who agreed to “cash out” funds on the prepaid cards generated by the bogus returns — minus a small commission.

Fraudulent returns listed in the miscreants’ control panel that were successfully filed produced a specific five-digit tax filing Personal Identification Number (PIN) apparently generated by H&R Block’s online filing system. An examination of the panel suggests that successfully-filed returns are routed to prepaid American Express cards that are requested to be sent to addresses in the United States corresponding to specific “drops,” or co-conspirators in the scheme who have agreed to receive the prepaid cards and “cash out” the balance — minus their fee for processing the bogus returns.

Alex Holden, chief information security officer at Hold Security, said although tax fraud is nothing new, automating the exploitation of human resource systems for mass tax fraud is an innovation.

“The depth of this specific operation permits them to act as a malicious middle-man and tax preparation company to be an unwitting ‘underwriter’ of this crime,” Holden said. “And the victims maybe exploited not only for 2013 tax year but also down the road, and perhaps subject of higher scrutiny by IRS — not to mention potential financial losses. Companies should look at their human resource infrastructure to ensure that payroll, taxes, financial, medical, and other benefits are afforded the same level of protection as their other mission-critical assets.” Continue reading →

Heartbleed Bug: What Can You Do?

April 10, 2014

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In the wake of widespread media coverage of the Internet security debacle known as the Heartbleed bug, many readers are understandably anxious to know what they can do to protect themselves. Here’s a short primer.

The Heartbleed bug concerns a security vulnerability in a component of recent versions of OpenSSL, a technology that a huge chunk of the Internet’s Web sites rely upon to secure the traffic, passwords and other sensitive information transmitted to and from users and visitors.

Around the same time that this severe flaw became public knowledge, a tool was released online that allowed anyone on the Internet to force Web site servers that were running vulnerable versions of OpenSSL to dump the most recent chunk of data processed by those servers.

That chunk of data might include usernames and passwords, re-usable browser cookies, or even the site administrator’s credentials. While the exploit only allows for small chunks of data to be dumped each time it is run, there is nothing to prevent attackers from replaying the attack over and over, all the while recording fresh data flowing through vulnerable servers. Indeed, I have seen firsthand data showing that some attackers have done just that; for example, compiling huge lists of credentials stolen from users logging in at various sites that remained vulnerable to this bug.

For this reason, I believe it is a good idea for Internet users to consider changing passwords at least at sites that they visited since this bug became public (Monday morning). But it’s important that readers first make an effort to determine that the site in question is not vulnerable to this bug before changing their passwords. Here are some resources that can tell you if a site is vulnerable: Continue reading →

Adobe, Microsoft Push Critical Fixes

April 8, 2014

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Adobe and Microsoft each issued updates to fix critical security vulnerabilities in their software today. Adobe patched its Flash Player software and Adobe AIR. Microsoft issued four updates to address at least 11 unique security flaws, including its final batch of fixes for Office 2003 and for systems powered by Windows XP.

Two of the four patches that Microsoft issued come with Redmond’s “critical” rating (its most severe), meaning attackers or malware can exploit the flaws to break into vulnerable systems without any help from users. One of the critical patches is a cumulative update for Internet Explorer (MS14-018); the other addresses serious issues with Microsoft Word and Office Web apps (MS14-017), including a fix for a zero-day vulnerability that is already being actively exploited. More information on these and other patches are available here.

As expected, Microsoft also used today’s patch release to pitch XP users on upgrading to a newer version of Windows, warning that attackers will begin to zero in on XP users even more now that Microsoft will no longer be issuing security updates for the 13-year-old operating system. From Microsoft’s Technet blog: Continue reading →

‘Heartbleed’ Bug Exposes Passwords, Web Site Encryption Keys

April 8, 2014

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Researchers have uncovered an extremely critical vulnerability in recent versions of OpenSSL, a technology that allows millions of Web sites to encrypt communications with visitors. Complicating matters further is the release of a simple exploit that can be used to steal usernames and passwords from vulnerable sites, as well as private keys that sites use to encrypt and decrypt sensitive data.

Credit: Heartbleed.com

From Heartbleed.com:

“The Heartbleed bug allows anyone on the Internet to read the memory of the systems protected by the vulnerable versions of the OpenSSL software. This compromises the secret keys used to identify the service providers and to encrypt the traffic, the names and passwords of the users and the actual content. This allows attackers to eavesdrop communications, steal data directly from the services and users and to impersonate services and users.”

An advisory from Carnegie Mellon University’s CERT notes that the vulnerability is present in sites powered by OpenSSL versions 1.0.1 through 1.0.1f. According to Netcraft, a company that monitors the technology used by various Web sites, more than a half million sites are currently vulnerable. As of this morning, that included Yahoo.com, and — ironically — the Web site of openssl.org. This list at Github appears to be a relatively recent test for the presence of this vulnerability in the top 1,000 sites as indexed by Web-ranking firm Alexa.

An easy-to-use exploit that is being widely traded online allows an attacker to retrieve private memory of an application that uses the vulnerable OpenSSL “libssl” library in chunks of 64kb at a time. As CERT notes, an attacker can repeatedly leverage the vulnerability to retrieve as many 64k chunks of memory as are necessary to retrieve the intended secrets.

Jamie Blasco, director of AlienVault Labs, said this bug has “epic repercussions” because not only does it expose passwords and cryptographic keys, but in order to ensure that attackers won’t be able to use any data that does get compromised by this flaw, affected providers have to replace the private keys and certificates after patching the vulnerable OpenSSL service for each of the services that are using the OpenSSL library [full disclosure: AlienVault is an advertiser on this blog].

It is likely that a great many Internet users will be asked to change their passwords this week (I hope). Meantime, companies and organizations running vulnerable versions should upgrade to the latest iteration of OpenSSL – OpenSSL 1.0.1g — as quickly as possible.

Update, 2:26 p.m.: It appears that this Github page allows visitors to test whether a site is vulnerable to this bug (hat tip to Sandro Süffert). For more on what you can do you to protect yourself from this vulnerability, see this post.

Fact-Checking Experian’s Talking Points

April 5, 2014

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In the wake of long-overdue media attention to revelations that a business unit of credit bureau Experian sold consumer personal data directly to an online service that catered to identity thieves, Experian is rightfully trying to explain its side of the story by releasing a series of talking points. This blog post is an attempt to add more context and fact-checking to those talking points.

Experian has posted several articles on its Web properties that lament the existence of “inaccurate information about Experian circulating in news outlets and other Web sites.”

“It’s no surprise that cybercrime and data breaches are hot topics for media and bloggers these days,” wrote Gerry Tschopp, senior vice president of public affairs at Experian. “Unfortunately, because of all the attention paid to these topics, we’ve seen some inaccurate information about Experian circulating in news outlets and other Web sites. I want to take a moment to clarify the facts and events.”

I’ve read this clarification closely, and it seems that Experian’s latest talking points deserve some clarification and fact-checking of their own. Below are Experian’s assertions of the facts (in bold), followed by some supplemental information glossed over by said statements of fact.

-No Experian database was accessed. The data in question have at all relevant times been owned and maintained, not by Experian, but by a company called US Info Search.

As all of my stories on this incident have explicitly stated, the government has said the data was not obtained directly from Experian, but rather via Columbus, Ohio-based US Info Search. US Info Search had a contractual agreement with a California company named Court Ventures, whereby customers of Court Ventures had access to the US Info Search data as well as Court Ventures’ data, and vice versa. Experian came into the picture in March 2012, when it purchased Court Ventures (along with all of its customers — including the proprietor of the identity theft service).

For its part, US Info Search says Experian’s explanation of the events is based on false statements and misrepresentations, and that the proprietor of the ID theft service paid Experian for his access using large cash payments sent to Experian via wire from Singapore.

“Experian provided access to records via a gateway that used multiple data sources and the suspect never had access to our service,” US Info Search CEO Marc Martin said in a written statement. “We, like many others, provide data to Experian, who in turn sold data to customers they approved and monitored. Our agreement with Court Ventures and subsequently Experian was to provide information that was being used for identity verification and fraud prevention.

-Further, Experian’s only involvement was that it purchased the assets of a company, Court Ventures, that provided access to US Info Search’s data to Court Ventures’ customers. Under that contract, customers of Court Ventures, including the criminal in this case, could access US Info Search’s data. This was not an Experian database, and specifically, this was not a credit database.

Experian has a duty to conduct “due diligence” on companies it wishes to acquire, because it knows that in purchasing a company it will acquire all of the company’s assets — including whatever debts, liabilities or poor decisions the previous owners may have incurred that end up creating problems down the road. Experian wants to blame everyone else, but by its own admission, Experian didn’t conduct proper due diligence on Court Ventures before acquiring the company. Addressing a U.S. Senate committee last December, Experian’s senior vice president of government policy, Tony Hadley, allowed that “during the due diligence process, we didn’t have total access to all the information we needed in order to completely vet that, and by the time we learned of the malfeasance nine months had expired, and the Secret Service came to us and told us of the incident. We were a victim, and scammed by this person.”

Also, if it wasn’t clear by now, Experian’s PR mantra on this crisis has been that “no Experian database was accessed,” in this fraud. But this mantra draws attention away from the real victim: Consumers whose information was sold by Experian’s company directly to an identity theft service. A critical question to ask to this line of thinking is: Why does it matter whose database it is, if it contains personal info and Experian profited from its sale? Continue reading →

U.S. States Investigating Breach at Experian

April 3, 2014

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An exclusive KrebsOnSecurity investigation detailing how a unit of credit bureau Experian ended up selling consumer records to an identity theft service in the cybercrime underground has prompted a multi-state investigation by several attorneys general, according to wire reports.

Ngo’s Identity theft service, superget.info

Reuters moved a story this afternoon quoting Illinois Attorney General Lisa Madigan saying that “it’s part of a multistate investigation,” and that Connecticut Attorney General George Jepsen said that Connecticut is looking into the matter as well.

News of the breach first came to light on this blog in October 2013, when KrebsOnSecurity published an exclusive story detailing how a Vietnamese man running an online identity theft service bought personal and financial records on Americans directly from a company owned by Experian, one of the three major U.S. credit bureaus.

Hieu Minh Ngo, a 24-year-old Vietnamese national, pleaded guilty last month to running an identity theft service out of his home in Vietnam. Ngo was arrested last year in Guam by U.S. Secret Service agents after he was lured into visiting the U.S. territory to consummate a business deal with a man he believed could deliver huge volumes of consumers’ personal and financial data for resale.

But according to prosecutors, Ngo had already struck deals with one of the world’s biggest data brokers: Experian. Court records just released last week show that Ngo tricked an Experian subsidiary into giving him direct access to personal and financial data on more than 200 million Americans.

Continue reading →

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