U.S. Secret Service: “Massive Fraud” Against State Unemployment Insurance Programs

May 16, 2020

A well-organized Nigerian crime ring is exploiting the COVID-19 crisis by committing large-scale fraud against multiple state unemployment insurance programs, with potential losses in the hundreds of millions of dollars, according to a new alert issued by the U.S. Secret Service.

A memo seen by KrebsOnSecurity that the Secret Service circulated to field offices around the United States on Thursday says the ring has been filing unemployment claims in different states using Social Security numbers and other personally identifiable information (PII) belonging to identity theft victims, and that “a substantial amount of the fraudulent benefits submitted have used PII from first responders, government personnel and school employees.”

“It is assumed the fraud ring behind this possesses a substantial PII database to submit the volume of applications observed thus far,” the Secret Service warned. “The primary state targeted so far is Washington, although there is also evidence of attacks in North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida.”

The Secret Service said the fraud network is believed to consist of hundred of “mules,” a term used to describe willing or unwitting individuals who are recruited to help launder the proceeds of fraudulent financial transactions.

“In the state of Washington, individuals residing out-of-state are receiving multiple ACH deposits from the State of Washington Unemployment Benefits Program, all in different individuals’ names with no connection to the account holder,” the notice continues.

The Service’s memo suggests the crime ring is operating in much the same way as crooks who specialize in filing fraudulent income tax refund requests with the states and the U.S. Internal Revenue Service (IRS), a perennial problem that costs the states and the U.S. Treasury hundreds of millions of dollars in revenue each year.

In those schemes, the scammers typically recruit people — often victims of online romance scams or those who also are out of work and looking for any source of income — to receive direct deposits from the fraudulent transactions, and then forward the bulk of the illicit funds to the perpetrators.

A federal fraud investigator who spoke with KrebsOnSecurity on condition of anonymity said many states simply don’t have enough controls in place to detect patterns that might help better screen out fraudulent unemployment applications, such as looking for multiple applications involving the same Internet addresses and/or bank accounts. The investigator said in some states fraudsters need only to submit someone’s name, Social Security number and other basic information for their claims to be processed.

Elaine Dodd, executive vice president of the fraud division at the Oklahoma Bankers Association, said financial institutions in her state earlier this week started seeing a flood of high-dollar transfers tied to employment claims filed for people in Washington, with many transfers in the $9,000 to $20,000 range.

“It’s been unbelievable to see the huge number of bogus filings here, and in such large amounts,” Dodd said, noting that one fraudulent claim sent to a mule in Oklahoma was for more than $29,000. “I’m proud of our bankers because they’ve managed to stop a lot of these transfers, but some are already gone. Most mules seem to have [been involved in] romance scams.”

While it might seem strange that people in Washington would be asking to receive their benefits via ACH deposits at a bank in Oklahoma, Dodd said the people involved seem to have a ready answer if anyone asks: One common refrain is that the claimants live in Washington but were riding out the Coronavirus pandemic while staying with family in Oklahoma. Continue reading

Microsoft Patch Tuesday, May 2020 Edition

May 12, 2020

Microsoft today issued software updates to plug at least 111 security holes in Windows and Windows-based programs. None of the vulnerabilities were labeled as being publicly exploited or detailed prior to today, but as always if you’re running Windows on any of your machines it’s time once again to prepare to get your patches on.

May marks the third month in a row that Microsoft has pushed out fixes for more than 110 security flaws in its operating system and related software. At least 16 of the bugs are labeled “Critical,” meaning ne’er-do-wells can exploit them to install malware or seize remote control over vulnerable systems with little or no help from users.

But focusing solely on Microsoft’s severity ratings may obscure the seriousness of the flaws being addressed this month. Todd Schell, senior product manager at security vendor Ivanti, notes that if one looks at the “exploitability assessment” tied to each patch — i.e., how likely Microsoft considers each can and will be exploited for nefarious purposes — it makes sense to pay just as much attention to the vulnerabilities Microsoft has labeled with the lesser severity rating of “Important.”

Virtually all of the non-critical flaws in this month’s batch earned Microsoft’s “Important” rating.

“What is interesting and often overlooked is seven of the ten [fixes] at higher risk of exploit are only rated as Important,” Schell said. “It is not uncommon to look to the critical vulnerabilities as the most concerning, but many of the vulnerabilities that end up being exploited are rated as Important vs Critical.”

For example, Satnam Narang from Tenable notes that two remote code execution flaws in Microsoft Color Management (CVE-2020-1117) and Windows Media Foundation (CVE-2020-1126) could be exploited by tricking a user into opening a malicious email attachment or visiting a website that contains code designed to exploit the vulnerabilities. However, Microsoft rates these vulnerabilities as “Exploitation Less Likely,” according to their Exploitability Index.

In contrast, three elevation of privilege vulnerabilities that received a rating of “Exploitation More Likely” were also patched, Narang notes. These include a pair of “Important” flaws in Win32k (CVE-2020-1054, CVE-2020-1143) and one in the Windows Graphics Component (CVE-2020-1135). Elevation of Privilege vulnerabilities are used by attackers once they’ve managed to gain access to a system in order to execute code on their target systems with elevated privileges. There are at least 56 of these types of fixes in the May release.

Schell says if your organization’s plan for prioritizing the deployment of this month’s patches stops at vendor severity or even CVSS scores above a certain level you may want to reassess your metrics.

“Look to other risk metrics like Publicly Disclosed, Exploited (obviously), and Exploitability Assessment (Microsoft specific) to expand your prioritization process,” he advised.

Continue reading

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Ransomware Hit ATM Giant Diebold Nixdorf

May 11, 2020

Diebold Nixdorf, a major provider of automatic teller machines (ATMs) and payment technology to banks and retailers, recently suffered a ransomware attack that disrupted some operations. The company says the hackers never touched its ATMs or customer networks, and that the intrusion only affected its corporate network.

Canton, Ohio-based Diebold [NYSE: DBD] is currently the largest ATM provider in the United States, with an estimated 35 percent of the cash machine market worldwide. The 35,000-employee company also produces point-of-sale systems and software used by many retailers.

According to Diebold, on the evening of Saturday, April 25, the company’s security team discovered anomalous behavior on its corporate network. Suspecting a ransomware attack, Diebold said it immediately began disconnecting systems on that network to contain the spread of the malware.

Sources told KrebsOnSecurity that Diebold’s response affected services for over 100 of the company’s customers. Diebold said the company’s response to the attack did disrupt a system that automates field service technician requests, but that the incident did not affect customer networks or the general public.

“Diebold has determined that the spread of the malware has been contained,” Diebold said in a written statement provided to KrebsOnSecurity. “The incident did not affect ATMs, customer networks, or the general public, and its impact was not material to our business. Unfortunately, cybercrime is an ongoing challenge for all companies. Diebold Nixdorf takes the security of our systems and customer service very seriously. Our leadership has connected personally with customers to make them aware of the situation and how we addressed it.” Continue reading

Meant to Combat ID Theft, Unemployment Benefits Letter Prompts ID Theft Worries

May 8, 2020

Millions of Americans now filing for unemployment will receive benefits via a prepaid card issued by U.S. Bank, a Minnesota-based financial institution that handles unemployment payments for more than a dozen U.S. states. Some of these unemployment applications will trigger an automatic letter from U.S. Bank to the applicant. The letters are intended to prevent identity theft, but many people are mistaking these vague missives for a notification that someone has hijacked their identity.

So far this month, two KrebsOnSecurity readers have forwarded scans of form letters they received via snail mail that mentioned an address change associated with some type of payment card, but which specified neither the entity that issued the card nor any useful information about the card itself.

Searching for snippets of text from the letter online revealed pages of complaints from consumers who appear confused about the source and reason for the letter, with most dismissing it as either a scam or considering it a notice of attempted identity theft. Here’s what’s the letter looks like:

A scan of the form letter sent by U.S. Bank to countless people enrolling in state unemployment benefits.

My first thought when a reader shared a copy of the letter was that he recently had been the victim of identity theft. It took a fair amount of digging online to discover that the nebulously named “Cardholder Services” address in Florida referenced at the top of the letter is an address exclusively used by U.S. Bank.

That digging indicated U.S. Bank currently manages the disbursement of funds for unemployment programs in at least 17 states, including Arkansas, Colorado, Delaware, Idaho, Louisiana, Maine, Minnesota, Nebraska, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Utah, Wisconsin, and Wyoming. The funds are distributed through a prepaid debit card called ReliaCard.

To make matters more confusing, the flood of new unemployment applications from people out of work thanks to the COVID-19 pandemic reportedly has overwhelmed U.S. Bank’s system, meaning that many people receiving these letters haven’t yet gotten their ReliaCard and thus lack any frame of reference for having applied for a new payment card.

Reached for comment about the unhelpful letters, U.S. Bank said it automatically mails them to current and former ReliaCard customers when changes in its system are triggered by a customer – including small tweaks to an address — such as changing “Street” to “St.” Continue reading

Tech Support Scam Uses Child Porn Warning

May 7, 2020

A new email scam is making the rounds, warning recipients that someone using their Internet address has been caught viewing child pornography. The message claims to have been sent from Microsoft Support, and says the recipient’s Windows license will be suspended unless they call an “MS Support” number to reinstate the license, but the number goes to a phony tech support scam that tries to trick callers into giving fraudsters direct access to their PCs.

The fraudulent message tries to seem more official by listing what are supposed to be the recipient’s IP address and MAC address. The latter term stands for “Media Access Control” and refers to a unique identifier assigned to a computer’s network interface.

However, this address is not visible to others outside of the user’s local network, and in any case the MAC address listed in the scam email is not even a full MAC address, which normally includes six groups of two alphanumeric characters separated by a colon. Also, the IP address cited in the email does not appear to have anything to do with the actual Internet address of the recipient.

Not that either of these details will be obvious to many people who receive this spam email, which states:

“We have found instances of child pornography accessed from your IP address & MAC Address.
IP Address: 206.19.86.255
MAC Address : A0:95:6D:C7

This is violation of Information Technology Act of 1996. For now we are Cancelling your Windows License, which means stopping all windows activities & updates on your computer.

If this was not You and would like to Reinstate the Windows License, Please call MS Support Team at 1-844-286-1916 for further help.

Microsoft Support
1 844 286 1916”

KrebsOnSecurity called the toll-free number in the email and was connected after a short hold to a man who claimed to be from MS Support. Immediately, he wanted me to type a specific Web addresses into my browser so he could take remote control over my computer. I was going to play along for a while but for some reason our call was terminated abruptly after several minutes. Continue reading

Europe’s Largest Private Hospital Operator Fresenius Hit by Ransomware

May 6, 2020

Fresenius, Europe’s largest private hospital operator and a major provider of dialysis products and services that are in such high demand thanks to the COVID-19 pandemic, has been hit in a ransomware cyber attack on its technology systems. The company said the incident has limited some of its operations, but that patient care continues.

Based in Germany, the Fresenius Group includes four independent businesses: Fresenius Medical Care, a leading provider of care to those suffering from kidney failure; Fresenius Helios, Europe’s largest private hospital operator (according to the company’s Web site); Fresenius Kabi, which supplies pharmaceutical drugs and medical devices; and Fresenius Vamed, which manages healthcare facilities.

Overall, Fresenius employs nearly 300,000 people across more than 100 countries, and is ranked 258th on the Forbes Global 2000. The company provides products and services for dialysis, hospitals, and inpatient and outpatient care, with nearly 40 percent of the market share for dialysis in the United States. This is worrisome because COVID-19 causes many patients to experience kidney failure, which has led to a shortage of dialysis machines and supplies.

On Tuesday, a KrebsOnSecurity reader who asked to remain anonymous said a relative working for Fresenius Kabi’s U.S. operations reported that computers in his company’s building had been roped off, and that a cyber attack had affected every part of the company’s operations around the globe.

The reader said the apparent culprit was the Snake ransomware, a relatively new strain first detailed earlier this year that is being used to shake down large businesses, holding their IT systems and data hostage in exchange for payment in a digital currency such as bitcoin.

Fresenius spokesperson Matt Kuhn confirmed the company was struggling with a computer virus outbreak.

“I can confirm that Fresenius’ IT security detected a computer virus on company computers,” Kuhn said in a written statement shared with KrebsOnSecurity. “As a precautionary measure in accordance with our security protocol drawn up for such cases, steps have been taken to prevent further spread. We have also informed the relevant investigating authorities and while some functions within the company are currently limited, patient care continues. Our IT experts are continuing to work on solving the problem as quickly as possible and ensuring that operations run as smoothly as possible.” Continue reading

How Cybercriminals are Weathering COVID-19

April 30, 2020

In many ways, the COVID-19 pandemic has been a boon to cybercriminals: With unprecedented numbers of people working from home and anxious for news about the virus outbreak, it’s hard to imagine a more target-rich environment for phishers, scammers and malware purveyors. In addition, many crooks are finding the outbreak has helped them better market their cybercriminal wares and services. But it’s not all good news: The Coronavirus also has driven up costs and disrupted key supply lines for many cybercriminals. Here’s a look at how they’re adjusting to these new realities.

FUELED BY MULES

One of the more common and perennial cybercriminal schemes is “reshipping fraud,” wherein crooks buy pricey consumer goods online using stolen credit card data and then enlist others to help them collect or resell the merchandise.

Most online retailers years ago stopped shipping to regions of the world most frequently associated with credit card fraud, including Eastern Europe, North Africa, and Russia. These restrictions have created a burgeoning underground market for reshipping scams, which rely on willing or unwitting residents in the United States and Europe — derisively referred to as “reshipping mules” — to receive and relay high-dollar stolen goods to crooks living in the embargoed areas.

A screen shot from a user account at “Snowden,” a long-running reshipping mule service.

But apparently a number of criminal reshipping services are reporting difficulties due to the increased wait time when calling FedEx or UPS (to divert carded goods that merchants end up shipping to the cardholder’s address instead of to the mule’s). In response, these operations are raising their prices and warning of longer shipping times, which in turn could hamper the activities of other actors who depend on those services.

That’s according to Intel 471, a cyber intelligence company that closely monitors hundreds of online crime forums. In a report published today, the company said since late March 2020 it has observed several crooks complaining about COVID-19 interfering with the daily activities of their various money mules (people hired to help launder the proceeds of cybercrime).

“One Russian-speaking actor running a fraud network complained about their subordinates (“money mules”) in Italy, Spain and other countries being unable to withdraw funds, since they currently were afraid to leave their homes,” Intel 471 observed. “Also some actors have reported that banks’ customer-support lines are being overloaded, making it difficult for fraudsters to call them for social-engineering activities (such as changing account ownership, raising withdrawal limits, etc).”

Still, every dark cloud has a silver lining: Intel 471 noted many cybercriminals appear optimistic that the impending global economic recession (and resultant unemployment) “will make it easier to recruit low-level accomplices such as money mules.”

Alex Holden, founder and CTO of Hold Security, agreed. He said while the Coronavirus has forced reshipping operators to make painful shifts in several parts of their business, the overall market for available mules has never looked brighter.

“Reshipping is way up right now, but there are some complications,” he said.

For example, reshipping scams have over the years become easier for both reshipping mule operators and the mules themselves. Many reshipping mules are understandably concerned about receiving stolen goods at their home and risking a visit from the local police. But increasingly, mules have been instructed to retrieve carded items from third-party locations.

“The mules don’t have to receive stolen goods directly at home anymore,” Holden said. “They can pick them up at Walgreens, Hotel lobbies, etc. There are a ton of reshipment tricks out there.”

But many of those tricks got broken with the emergence of COVID-19 and social distancing norms. In response, more mule recruiters are asking their hires to do things like reselling goods shipped to their homes on platforms like eBay and Amazon.

“Reshipping definitely has become more complicated,” Holden said. “Not every mule will run 10 times a day to the post office, and some will let the goods sit by the mailbox for days. But on the whole, mules are more compliant these days.”

GIVE AND TAKE

KrebsOnSecurity recently came to a similar conclusion: Last month’s story, “Coronavirus Widens the Money Mule Pool,” looked at one money mule operation that had ensnared dozens of mules with phony job offers in a very short period of time. Incidentally, the fake charity behind that scheme — which promised to raise money for Coronavirus victims — has since closed up shop and apparently re-branded itself as the Tessaris Foundation.

Charitable cybercriminal endeavors were the subject of a report released this week by cyber intel firm Digital Shadows, which looked at various ways computer crooks are promoting themselves and their hacking services using COVID-19 themed discounts and giveaways.

Like many commercials on television these days, such offers obliquely or directly reference the economic hardships wrought by the virus outbreak as a way of connecting on an emotional level with potential customers.

“The illusion of philanthropy recedes further when you consider the benefits to the threat actors giving away goods and services,” the report notes. “These donors receive a massive boost to their reputation on the forum. In the future, they may be perceived as individuals willing to contribute to forum life, and the giveaways help establish a track record of credibility.”

Brian’s Club — one of the underground’s largest bazaars for selling stolen credit card data and one that has misappropriated this author’s likeness and name in its advertising — recently began offering “pandemic support” in the form of discounts for its most loyal customers.

Continue reading

Would You Have Fallen for This Phone Scam?

April 28, 2020

You may have heard that today’s phone fraudsters like to use caller ID spoofing services to make their scam calls seem more believable. But you probably didn’t know that these fraudsters also can use caller ID spoofing to trick your bank into giving up information about recent transactions on your account — data that can then be abused to make their phone scams more believable and expose you to additional forms of identity theft.

Last week, KrebsOnSecurity told the harrowing tale of a reader (a security expert, no less) who tried to turn the tables on his telephonic tormentors and failed spectacularly. In that episode, the people impersonating his bank not only spoofed the bank’s real phone number, but they were also pretending to be him on a separate call at the same time with his bank.

This foiled his efforts to make sure it was really his bank that called him, because he called his bank with another phone and the bank confirmed they currently were in a separate call with him discussing fraud on his account (however, the other call was the fraudster pretending to be him).

Shortly after that story ran, I heard from another reader — we’ll call him “Jim” since he didn’t want his real name used for this story — whose wife was the target of a similar scam, albeit with an important twist: The scammers were armed with information about a number of her recent financial transactions, which he claims they got from the bank’s own automated phone system just by spoofing her phone number.

“When they originally called my wife, there were no fraudulent transactions on her account, but they were able to specify the last three transactions she had made, which combined with the caller-ID had mistakenly earned her trust,” Jim explained. “After we figured out what was going on, we were left asking ourselves how the crooks had obtained her last three transactions without breaking into her account online. As it turned out, calling the phone number on the back of the credit card from the phone number linked with the card provided the most recent transactions without providing any form of authentication.”

Jim said he was so aghast at this realization that he called the same number from his phone and tried accessing his account, which is also at Citi but wholly separate from his spouse’s. Sure enough, he said, as long as he was calling from the number on file for his account, the automated system let him review recent transactions without any further authentication.

“I confirmed on my separate Citi card that they often (but not quite always) were providing the transaction details,” Jim said. “I was appalled that Citi would do that. So, it seemed the crooks would spoof caller ID when calling Citibank, as well as when calling the target/victim.

The incident Jim described happened in late January 2020, and Citi may have changed its procedures since then. But in a phone interview with KrebsOnSecurity earlier this week, Jim made a call to Citi’s automated system from his mobile phone on file with the bank, and I could hear Citi’s systems asking him to enter the last four digits of his credit card number before he could review recent transactions.

The request for the last four of the customer’s credit card number was consistent with my own testing, which relied on a caller ID spoofing service advertised in the cybercrime underground and aimed at a Citi account controlled by this author.

In one test, the spoofed call let KrebsOnSecurity hear recent transaction data — where and when the transaction was made, and how much was spent — after providing the automated system the last four digits of the account’s credit card number. In another test, the automated system asked for the account holder’s full Social Security number.

Citi declined to discuss specific actions it takes to detect and prevent fraud. But in a written statement provided to this author it said the company continuously monitors and analyzes threats and looks for opportunities to strengthen its controls.

“We see regular attempts by fraudsters to gain access to information and we are constantly monitoring for emerging threats and taking preventive action for our clients’ protection,” the statement reads. “For inbound calls to call centers, we continue to adapt and implement detection capabilities to identify suspicious or spoofed phone numbers. We also encourage clients to install and use our mobile app and sign up for push notifications and alerts in the mobile app.”

PREGNANT PAUSES AND BULGING EMAIL BOMBS

Jim said the fraudster who called his wife clearly already knew her mailing and email addresses, her mobile number and the fact that her card was an American Airlines-branded Citi card. The caller said there had been a series of suspicious transactions, and proceeded to read back details of several recent transactions to verify if those were purchases she’d authorized.

A list of services offered by one of several underground stores that sell caller ID spoofing and email bombing services.

Jim’s wife quickly logged on to her Citi account and saw that the amounts, dates and places of the transactions referenced by the caller indeed corresponded to recent legitimate transactions. But she didn’t see any signs of unauthorized charges.

After verifying the recent legitimate transactions with the caller, the person on the phone asked for her security word. When she provided it, there was a long hold before the caller came back and said she’d provided the wrong answer.

When she corrected herself and provided a different security word, there was another long pause before the caller said the second answer she provided was correct. At that point, the caller said Citi would be sending her a new card and that it had prevented several phony charges from even posting to her account.

She didn’t understand until later that the pauses were points at which the fraudsters had to put her on hold to relay her answers in their own call posing as her to Citi’s customer service department.

Not long after Jim’s spouse hung up with the caller, her inbox quickly began filling up with hundreds of automated messages from various websites trying to confirm an email newsletter subscription she’d supposedly requested.

As the recipient of several of theseemail bombing” attacks, I can verify that crooks often will use services offered in the cybercrime underground to flood a target’s inbox with these junk newsletter subscriptions shortly after committing fraud in the target’s name when they wish to bury an email notification from a target’s bank.

‘OVERPAYMENT REIMBURSEMENT’

In the case of Jim’s wife, the inbox flood backfired, and only made her more suspicious about the true nature of the recent phone call. So she called the number on the back of her Citi card and was told that she had indeed just called Citi and requested what’s known as an “overpayment reimbursement.” The couple have long had their credit cards on auto-payment, and the most recent payment was especially high — nearly $4,000 — thanks to a flurry of Christmas present purchases for friends and family.

In an overpayment reimbursement, a customer can request that the bank refund any amount paid toward a previous bill that exceeds the minimum required monthly payment. Doing so causes any back-due interest on that unpaid amount to accrue to the account as well.

In this case, the caller posing as Jim’s wife requested an overpayment reimbursement to the tune of just under $4,000. It’s not clear how or where the fraudsters intended this payment to be sent, but for whatever reason Citi ended up saying they would cut a physical check and mail it to the address on file. Probably not what the fraudsters wanted, although since then Jim and his wife say they have been on alert for anyone suspicious lurking near their mailbox.

“The person we spoke with at Citi’s fraud department kept insisting that yes, it was my wife that called because the call came from her mobile number,” Jim said. “The Citi employee was alarmed because she didn’t understand the whole notion of caller ID spoofing. And we both found it kind of disturbing that someone in fraud at such a major bank didn’t even understand that such a thing was possible.” Continue reading

Unproven Coronavirus Therapy Proves Cash Cow for Shadow Pharmacies

April 24, 2020

Many of the same shadowy organizations that pay people to promote male erectile dysfunction drugs via spam and hacked websites recently have enjoyed a surge in demand for medicines used to fight malaria, lupus and arthritis, thanks largely to unfounded suggestions that these therapies can help combat the COVID-19 pandemic.

A review of the sales figures from some of the top pharmacy affiliate programs suggests sales of drugs containing hydroxychloroquine rivaled that of their primary product — generic Viagra and Cialis — and that this as-yet-unproven Coronavirus treatment accounted for as much as 25 to 30 percent of all sales over the past month.

A Google Trends graph depicting the incidence of Web searches for “chloroquine” over the past 90 days.

KrebsOnSecurity reviewed a number of the most popular online pharmacy enterprises, in part by turning to some of the same accounts at these invite-only affiliate programs I relied upon for researching my 2014 book, Spam Nation: The Inside Story of Organized Cybercrime, from Global Epidemic to Your Front Door.

Many of these affiliate programs — going by names such as EvaPharmacy, Rx-Partners and Mailien/Alientarget — have been around for more than a decade, and were major, early catalysts for the creation of large-scale botnets and malicious software designed to enslave computers for the sending of junk email.

Their products do not require a prescription, are largely sourced directly from pharmaceutical production facilities in India and China, and are shipped via international parcel post to customers around the world.

In mid-March, two influential figures — President Trump and Tesla CEO Elon Muskbegan suggesting that hydroxychloroquine should be more strongly considered as a treatment for COVID-19.

The pharmacy affiliate programs immediately took notice of a major moneymaking opportunity, noting that keyword searches for terms related to chloroquine suddenly were many times more popular than for the other mainstays of their business.

“Everyone is hysterical,” wrote one member of the Russian language affiliate forum gofuckbiz[.]com on Mar. 17. “Time to make extra money. Do any [pharmacy affiliate] programs sell drugs for Coronavirus or flu?”

The larger affiliate programs quickly pounced on the opportunity, which turned out to be a major — albeit short-lived — moneymaker. Below is a screenshot of the overall product sales statistics for the previous 30 days from all affiliates of PharmCash. As we can see, Aralen — a chloroquine drug used to treat and prevent malaria — was the third biggest seller behind Viagra and Cialis.

Recent 30-day sales figures from the pharmacy affiliate program PharmCash.

In mid-March, the affiliate program Rx-Partners saw a huge spike in demand for Aralen and other drugs containing chloroquine phosphate, and began encouraging affiliates to promote a new set of product teasers targeting people anxiously seeking remedies for COVID-19.

Their main promotion page — still online at about-coronavirus2019[.]com — touts the potential of Aralen, generic hydroxychloroquine, and generic Kaletra/Lopinavir, a drug used to treat HIV/AIDS.

An ad promoting various unproven remedies for COVID-19, from the pharmacy affiliate program Rx-Partners.

On Mar. 18, a manager for Rx-Partners said that like PharmCash, drugs which included chloroquine phosphate had already risen to the top of sales for non-erectile dysfunction drugs across the program. Continue reading

When in Doubt: Hang Up, Look Up, & Call Back

April 23, 2020

Many security-conscious people probably think they’d never fall for a phone-based phishing scam. But if your response to such a scam involves anything other than hanging up and calling back the entity that claims to be calling, you may be in for a rude awakening. Here’s how one security and tech-savvy reader got taken for more than $10,000 in an elaborate, weeks-long ruse.

Today’s lesson in how not to get scammed comes from “Mitch,” the pseudonym I picked for a reader in California who shared his harrowing tale on condition of anonymity. Mitch is a veteran of the tech industry — having worked in security for several years at a fairly major cloud-based service — so he’s understandably embarrassed that he got taken in by this confidence scheme.

On Friday, April 17, Mitch received a call from what he thought was his financial institution, warning him that fraud had been detected on his account. Mitch said the caller ID for that incoming call displayed the same phone number that was printed on the back of his debit card.

But Mitch knew enough of scams to understand that fraudsters can and often do spoof phone numbers. So while still on the phone with the caller, he quickly logged into his account and saw that there were indeed multiple unauthorized transactions going back several weeks. Most were relatively small charges — under $100 apiece — but there were also two very recent $800 ATM withdrawals from cash machines in Florida.

If the caller had been a fraudster, he reasoned at the time, they would have asked for personal information. But the nice lady on the phone didn’t ask Mitch for any personal details. Instead, she calmly assured him the bank would reverse the fraudulent charges and said they’d be sending him a new debit card via express mail. After making sure the representative knew which transactions were not his, Mitch thanked the woman for notifying him, and hung up.

The following day, Mitch received another call about suspected fraud on his bank account. Something about that conversation didn’t seem right, and so Mitch decided to use another phone to place a call to his bank’s customer service department — while keeping the first caller on hold.

“When the representative finally answered my call, I asked them to confirm that I was on the phone with them on the other line in the call they initiated toward me, and so the rep somehow checked and saw that there was another active call with Mitch,” he said. “But as it turned out, that other call was the attackers also talking to my bank pretending to be me.”

Mitch said his financial institution has in the past verified his identity over the phone by sending him a one-time code to the cell phone number on file for his account, and then asking him to read back that code. After he hung up with the customer service rep he’d phoned, the person on the original call said the bank would be sending him a one-time code to validate his identity.

Now confident he was speaking with a representative from his bank and not some fraudster, Mitch read back the code that appeared via text message shortly thereafter. After more assurances that any additional phony charges would be credited to his account and that he’d be receiving a new card soon, Mitch was annoyed but otherwise satisfied. He said he checked his account online several times over the weekend, but saw no further signs of unauthorized activity.

That is, until the following Monday, when Mitch once again logged in and saw that a $9,800 outgoing wire transfer had been posted to his account. At that point, it dawned on Mitch that both the Friday and Saturday calls he received had likely been from scammers — not from his bank.

Another call to his financial institution and some escalation to its fraud department confirmed that suspicion: The investigator said another man had called in on Saturday posing as Mitch, had provided a one-time code the bank texted to the phone number on file for Mitch’s account — the same code the real Mitch had been tricked into giving up — and then initiated an outgoing wire transfer.

It appears the initial call on Friday was to make him think his bank was aware of and responding to active fraud against his account, when in actuality the bank was not at that time. Also, the Friday call helped to set up the bigger heist the following day.

Mitch said he and his bank now believe that at some point his debit card and PIN were stolen, most likely by a skimming device planted at a compromised point-of-sale terminal, gas pump or ATM he’d used in the past few weeks. Armed with a counterfeit copy of his debit card and PIN, the fraudsters could pull money out of his account at ATMs and go shopping in big box stores for various items. But to move lots of money out of his account all at once, they needed Mitch’s help. Continue reading