The Year Targeted Phishing Went Mainstream

August 2, 2018
43 Comments

A story published here on July 12 about a new sextortion-based phishing scheme that invokes a real password used by each recipient has become the most-read piece on KrebsOnSecurity since this site launched in 2009. And with good reason — sex sells (the second most-read piece here was my 2015 scoop about the Ashley Madison hack).

But beneath the lurid allure of both stories lies a more unsettling reality: It has never been easier for scam artists to launch convincing, targeted phishing and extortion scams that are automated on a global scale. And given the sheer volume of hacked and stolen personal data now available online, it seems almost certain we will soon witness many variations on these phishing campaigns that leverage customized data elements to enhance their effectiveness.

The sextortion scheme that emerged this month falsely claims to have been sent from a hacker who’s compromised your computer and used your webcam to record a video of you while you were watching porn. The missive threatens to release the video to all your contacts unless you pay a Bitcoin ransom.

What spooked people most about this scam was that its salutation included a password that each recipient legitimately used at some point online. Like most phishing attacks, the sextortion scheme that went viral this month requires just a handful of recipients to fall victim for the entire scheme to be profitable.

From reviewing the Bitcoin addresses readers shared in the comments on that July 12 sextortion story, it is clear this scam tricked dozens of people into paying anywhere from a few hundred to thousands of dollars in Bitcoin. All told, those addresses received close to $100,000 in payments over the past two weeks.

And that is just from examining the Bitcoin addresses posted here; the total financial haul from different versions of this attack is likely far higher. A more comprehensive review by the Twitter user @SecGuru_OTX and posted to Pastebin suggests that as of July 26 there were more than 300 Bitcoin addresses used to con at least 150 victims out of a total of 30 Bitcoins, or approximately $250,000.

There are several interesting takeaways from this phishing campaign. The first is that it effectively inverted a familiar threat model: Most phishing campaigns try to steal your password, whereas this one leads with it.

A key component of a targeted phishing attack is personalization. And purloined passwords are an evergreen lure because your average Internet user hasn’t the slightest inkling of just how many of their passwords have been breached, leaked, lost or stolen over the years.

This was evidenced by the number of commenters here who acknowledged that the password included in the extortion email was one they were still using, with some even admitting they were using the password at multiple sites! 

Surprisingly, none of the sextortion emails appeared to include a Web site link of any kind. But consider how effective this “I’ve got your password” scam would be at enticing a fair number of recipients into clicking on one.

In such a scenario, the attacker might configure the link to lead to an “exploit kit,” crimeware designed to be stitched into hacked or malicious sites that exploits a variety of Web-browser vulnerabilities for the purposes of installing malware of the attacker’s choosing.

Also, most of the passwords referenced in the sextortion campaign appear to have been slurped from data breaches that are now several years old. For example, many readers reported that the password they received was the one compromised in LinkedIn’s massive 2012 data breach.

Now imagine how much more convincing such a campaign would be if it leveraged a fresh password breach — perhaps one that the breached company wasn’t even aware of yet.

There are many other data elements that could be embedded in extortion emails to make them more believable, particularly with regard to freshly-hacked databases. For example, it is common for user password databases that are stolen from hacked companies to include the Internet Protocol (IP) addresses used by each user upon registering their account.

This could be useful for phishers because there are many automated “geo-IP” services that try to determine the geographical location of Website visitors based on their Internet addresses.

Some of these services allow users to upload large lists of IP addresses and generate links that plot each address on Google Maps. Suddenly, the phishing email not only includes a password you are currently using, but it also bundles a Google Street View map of your neighborhood!

There are countless other ways these schemes could become far more personalized and terrifying — all in an automated fashion. The point is that automated, semi-targeted phishing campaigns are likely here to stay.

Continue reading →

Reddit Breach Highlights Limits of SMS-Based Authentication

August 1, 2018
79 Comments

Reddit.com today disclosed that a data breach exposed some internal data, as well as email addresses and passwords for some Reddit users. As Web site breaches go, this one doesn’t seem too severe. What’s interesting about the incident is that it showcases once again why relying on mobile text messages (SMS) for two-factor authentication (2FA) can lull companies and end users into a false sense of security.

In a post to Reddit, the social news aggregation platform said it learned on June 19 that between June 14 and 18 an attacker compromised a several employee accounts at its cloud and source code hosting providers.

Reddit said the exposed data included internal source code as well as email addresses and obfuscated passwords for all Reddit users who registered accounts on the site prior to May 2007. The incident also exposed the email addresses of some users who had signed up to receive daily email digests of specific discussion threads.

Of particular note is that although the Reddit employee accounts tied to the breach were protected by SMS-based two-factor authentication, the intruder(s) managed to intercept that second factor.

“Already having our primary access points for code and infrastructure behind strong authentication requiring two factor authentication (2FA), we learned that SMS-based authentication is not nearly as secure as we would hope, and the main attack was via SMS intercept,” Reddit disclosed. “We point this out to encourage everyone here to move to token-based 2FA.”

Reddit didn’t specify how the SMS code was stolen, although it did say the intruders did not hack Reddit employees’ phones directly. Nevertheless, there are a variety of well established ways that attackers can intercept one-time codes sent via text message.

In one common scenario, known as a SIM-swap, the attacker masquerading as the target tricks the target’s mobile provider into tying the customer’s service to a new SIM card that the bad guys control. A SIM card is the tiny, removable chip in a mobile device that allows it to connect to the provider’s network. Customers can request a SIM swap when their existing SIM card has been damaged, or when they are switching to a different phone that requires a SIM card of another size.

Another typical scheme involves mobile number port-out scams, wherein the attacker impersonates a customer and requests that the customer’s mobile number be transferred to another mobile network provider. In both port-out and SIM swap schemes, the victim’s phone service gets shut off and any one-time codes delivered by SMS (or automated phone call) get sent to a device that the attackers control. Continue reading →

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State Govts. Warned of Malware-Laden CD Sent Via Snail Mail from China

July 27, 2018
40 Comments

Here’s a timely reminder that email isn’t the only vector for phishing attacks: Several U.S. state and local government agencies have reported receiving strange letters via snail mail that include malware-laden compact discs (CDs) apparently sent from China, KrebsOnSecurity has learned.

This particular ruse, while crude and simplistic, preys on the curiosity of recipients who may be enticed into popping the CD into a computer. According to a non-public alert shared with state and local government agencies by the Multi-State Information Sharing and Analysis Center (MS-ISAC), the scam arrives in a Chinese postmarked envelope and includes a “confusingly worded typed letter with occasional Chinese characters.”

Several U.S. state and local government agencies have reported receiving this letter, which includes a malware-laden CD. Images copyright Sarah Barsness.

The MS-ISAC said preliminary analysis of the CDs indicate they contain Mandarin language Microsoft Word (.doc) files, some of which include malicious Visual Basic scripts. So far, State Archives, State Historical Societies, and a State Department of Cultural Affairs have all received letters addressed specifically to them, the MS-ISAC says. It’s not clear if anyone at these agencies was tricked into actually inserting the CD into a government computer.

I’m sure many readers could think of clever ways that this apparent mail-based phishing campaign could be made more effective or believable, such as including tiny USB drives instead of CDs, or at least a more personalized letter that doesn’t look like it was crafted by someone without a mastery of the English language.

Nevertheless, attacks like this are a reminder that cybercrime can take many forms. The first of Krebs’s 3 Basic Rules for Online Safety — “If you didn’t go looking for it don’t install it” — applies just as well here: If you didn’t go looking for it, don’t insert it or open it.

LifeLock Bug Exposed Millions of Customer Email Addresses

July 25, 2018
103 Comments

Identity theft protection firm LifeLock — a company that’s built a name for itself based on the promise of helping consumers protect their identities online — may have actually exposed customers to additional attacks from ID thieves and phishers. The company just fixed a vulnerability on its site that allowed anyone with a Web browser to index email addresses associated with millions of customer accounts, or to unsubscribe users from all communications from the company.

The upshot of this weakness is that cyber criminals could harvest the data and use it in targeted phishing campaigns that spoof LifeLock’s brand. Of course, phishers could spam the entire world looking for LifeLock customers without the aid of this flaw, but nevertheless the design of the company’s site suggests that whoever put it together lacked a basic understanding of Web site authentication and security.

LifeLock’s Web site exposed customer email addresses by tying each customer account to a numeric “subscriberkey” that could be easily enumerated. Pictured above is customer number 55,739,477. Click to enlarge.

Pictured above is a redacted screen shot of one such record (click the image to enlarge). Notice how the format of the link in the browser address bar ends with the text “subscriberkey=” followed by a number. Each number corresponds to a customer record, and the records appear to be sequential. Translation: It would be trivial to write a simple script that pulls down the email address of every LifeLock subscriber.

Security firm Symantec, which acquired LifeLock in November 2016 for $2.3 billion, took LifeLock.com offline shortly after being contacted by KrebsOnSecurity. According to LifeLock’s marketing literature as of January 2017, the company has more than 4.5 million customer accounts.

KrebsOnSecurity was alerted to the glaring flaw by Nathan Reese, a 42-year-old freelance security researcher based in Atlanta who is also a former LifeLock subscriber. Reese said he discovered the data leak after receiving an email to the address he had previously used at LifeLock, and that the message offered him a discount for renewing his membership.

Clicking the “unsubscribe” link at the bottom of the email brought up a page showing his subscriber key. From there, Reese said, he wrote a proof-of-concept script that began sequencing numbers and pulling down email addresses. Reese said he stopped the script after it enumerated approximately 70 emails because he didn’t want to set off alarm bells at LifeLock.

“If I were a bad guy, I would definitely target your customers with a phishing attack because I know two things about them,” Reese said. “That they’re a LifeLock customer and that I have those customers’ email addresses. That’s a pretty sharp spear for my spear phishing right there. Plus, I definitely think the target market of LifeLock is someone who is easily spooked by the specter of cybercrime.”

LifeLock’s Web site is currently offline.

Misconfigurations like the one described above are some of the most common ways that companies leak customer data, but they’re also among the most preventable. Earlier this year, KrebsOnSecurity broke a story about a similar flaw at Panerabread.com, which exposed tens of millions of customer records — including names, email and physical addresses, birthdays and the last four digits of the customer’s credit card.

Update, 7:40 p.m.: Corrected the number of LifeLock subscribers based on a 2017 estimate by Symantec.

Update, July 26, 7:32 a.m.: Symantec issued the following statement in response to this article:

This issue was not a vulnerability in the LifeLock member portal. The issue has been fixed and was limited to potential exposure of email addresses on a marketing page, managed by a third party, intended to allow recipients to unsubscribe from marketing emails. Based on our investigation, aside from the 70 email address accesses reported by the researcher, we have no indication at this time of any further suspicious activity on the marketing opt-out page.

Hackers Breached Virginia Bank Twice in Eight Months, Stole $2.4M

July 24, 2018
70 Comments

Hackers used phishing emails to break into a Virginia bank in two separate cyber intrusions over an eight-month period, making off with more than $2.4 million total. Now the financial institution is suing its insurance provider for refusing to fully cover the losses.

According to a lawsuit filed last month in the Western District of Virginia, the first heist took place in late May 2016, after an employee at The National Bank of Blacksburg fell victim to a targeted phishing email.

Photo copyright: Kerri Farley

The email allowed the intruders to install malware on the victim’s PC and to compromise a second computer at the bank that had access to the STAR Network, a system run by financial industry giant First Data that the bank uses to handle debit card transactions for customers. That second computer had the ability to manage National Bank customer accounts and their use of ATMs and bank cards.

Armed with this access, the bank says, hackers were able to disable and alter anti-theft and anti-fraud protections, such as 4-digit personal identification numbers (PINs), daily withdrawal limits, daily debit card usage limits, and fraud score protections.

National Bank said the first breach began Saturday, May 28, 2016 and continued through the following Monday. Normally, the bank would be open on a Monday, but that particular Monday was Memorial Day, a federal holiday in the United States. The hackers used hundreds of ATMs across North America to dispense funds from customer accounts. All told, the perpetrators stole more than $569,000 in that incident.

Following the 2016 breach, National Bank hired cybersecurity forensics firm Foregenix to investigate. The company determined the hacking tools and activity appeared to come from Russian-based Internet addresses.

In June of 2016, National Bank implemented additional security protocols, as recommended by FirstData. These protocols are known as “velocity rules” and were put in place to help the bank flag specific types of repeated transaction patterns that happen within a short period of time.

But just eight months later — in January 2017 according to the lawsuit — hackers broke in to the bank’s systems once more, again gaining access to the financial institution’s systems via a phishing email.

This time not only did the intruders regain access to the bank’s STAR Network, they also managed to compromise a workstation that had access to Navigator, which is software used by National Bank to manage credits and debits to customer accounts.

Prior to executing the second heist, the hackers used the bank’s Navigator system to fraudulently credit more than $2 million to various National Bank accounts. As with the first incident, the intruders executed their heist on a weekend. Between Jan. 7 and 9, 2017, the hackers modified or removed critical security controls and withdrew the fraudulent credits using hundreds of ATMs.

All the while, the intruders used the bank’s systems to actively monitor customer accounts from which the funds were being withdrawn. At the conclusion of the 2017 heist, the hackers used their access to delete evidence of fraudulent debits from customer accounts. The bank’s total reported loss from that breach was $1,833,984.

Verizon was hired to investigate the 2017 attack, and according to the bank Verizon’s forensics experts concluded that the tools and servers used by the hackers were of Russian origin. The lawsuit notes the company determined that it was likely the same group of attackers responsible for both intrusions. Verizon also told the bank that the malware the attackers used to gain their initial foothold at the bank in the 2017 breach was embedded in a booby-trapped Microsoft Word document. Continue reading →

Google: Security Keys Neutralized Employee Phishing

July 23, 2018
187 Comments

Google has not had any of its 85,000+ employees successfully phished on their work-related accounts since early 2017, when it began requiring all employees to use physical Security Keys in place of passwords and one-time codes, the company told KrebsOnSecurity.

A YubiKey Security Key made by Yubico. The basic model featured here retails for $20.

Security Keys are inexpensive USB-based devices that offer an alternative approach to two-factor authentication (2FA), which requires the user to log in to a Web site using something they know (the password) and something they have (e.g., a mobile device).

A Google spokesperson said Security Keys now form the basis of all account access at Google.

“We have had no reported or confirmed account takeovers since implementing security keys at Google,” the spokesperson said. “Users might be asked to authenticate using their security key for many different apps/reasons. It all depends on the sensitivity of the app and the risk of the user at that point in time.”

The basic idea behind two-factor authentication is that even if thieves manage to phish or steal your password, they still cannot log in to your account unless they also hack or possess that second factor.

The most common forms of 2FA require the user to supplement a password with a one-time code sent to their mobile device via text message or an app. Indeed, prior to 2017 Google employees also relied on one-time codes generated by a mobile app — Google Authenticator.

In contrast, a Security Key implements a form of multi-factor authentication known as Universal 2nd Factor (U2F), which allows the user to complete the login process simply by inserting the USB device and pressing a button on the device. The key works without the need for any special software drivers.

Once a device is enrolled for a specific Web site that supports Security Keys, the user no longer needs to enter their password at that site (unless they try to access the same account from a different device, in which case it will ask the user to insert their key).

U2F is an emerging open source authentication standard, and as such only a handful of high-profile sites currently support it, including Dropbox, Facebook, Github (and of course Google’s various services). Most major password managers also now support U2F, including Dashlane, and Keepass. Duo Security [full disclosure: an advertiser on this site] also can be set up to work with U2F.

With any luck, more sites soon will begin incorporating the Web Authentication API — also known as “WebAuthn” — a standard put forth by the World Wide Web Consortium in collaboration with the FIDO Alliance. The beauty of WebAuthn is that it eliminates the need for users to constantly type in their passwords, which negates the threat from common password-stealing methods like phishing and man-in-the-middle attacks.

Currently, U2F is supported by Chrome, Mozilla Firefox, and Opera. In both Firefox and Quantum (the newer, faster version of Firefox), U2F is not enabled by default. To turn it on, type “about:config” in the browser bar, type or paste “security.webauth.u2f” and double-click the resulting entry to change the preference’s value from “false” to “true.”

Microsoft says it expects to roll out updates to its flagship Edge browser to support U2F later this year. According to a recent article at 9to5Mac.com, Apple has not yet said when or if it will support the standard in its Safari browser. Continue reading →

Human Resources Firm ComplyRight Breached

July 19, 2018
34 Comments

Cloud-based human resources company ComplyRight said this week that a security breach of its Web site may have jeopardized sensitive consumer information — including names, addresses, phone numbers, email addresses and Social Security numbers — from tax forms submitted by the company’s thousands of clients on behalf of employees.

Pompano Beach, Fla-based ComplyRight began mailing breach notification letters to affected consumers late last week, but the form letters are extremely vague about the scope and cause of the breach. Indeed, many readers who received these letters wrote to KrebsOnSecurity asking for more information, as the company hadn’t yet published any details about the breach on its Web site. Also, most of those folks said they’d never heard of ComplyRight and could not remember ever doing business with a company by that name.

Neither ComplyRight nor its parent company Taylor Corp. responded to multiple requests for comment this past week. But on Wednesday evening, ComplyRight posted additional facts about the incident on its site, saying a recently completed investigation suggests that fewer than 10 percent of individuals with tax forms prepared on the ComplyRight platform were impacted.

According to ComplyRight’s Web site, some 76,000 organizations — many of them small businesses — use its services to prepare tax forms such as 1099s and W2s on behalf of their employees and/or contractors. While the company didn’t explicitly say which of its cloud services was impacted by the breach, the Web site which handles its tax preparation business is efile4biz.com.

ComplyRight says it learned of the breach on May 22, 2018, and that the “unauthorized access” to its site persisted between April 20, 2018 and May 22, 2018. Continue reading →

‘LuminosityLink RAT’ Author Pleads Guilty

July 16, 2018
38 Comments

A 21-year-old Kentucky man has pleaded guilty to authoring and distributing a popular hacking tool called “LuminosityLink,” a malware strain that security experts say was used by thousands of customers to gain unauthorized access to tens of thousands of computers across 78 countries worldwide.

The LuminosityLink Remote Access Tool (RAT) was sold for $40 to thousands of customers, who used the tool to gain unauthorized access to tens of thousands of computers worldwide.

Federal prosecutors say Colton Ray Grubbs of Stanford, Ky. conspired with others to market and distribute the LuminosityLink RAT, a $40 Remote Access Tool that made it simple for buyers to hack into computers to surreptitiously view documents, photographs and other files on victim PCs. The RAT also let users view what victims were typing on their keyboards, disable security software, and secretly activate the webcam on the target’s computer.

Grubbs, who went by the pseudonym “KFC Watermelon,” began selling the tool in May 2015. By mid-2017 he’d sold LuminosityLink to more than 8,600 customers, according to Europol, the European Union’s law enforcement agency.

Speculation that Grubbs had been arrested began surfacing last year after KFC Watermelon stopped responding to customer support queries on Hackforums[dot]net, the Web site where he primarily sold his product. Continue reading →

Sextortion Scam Uses Recipient’s Hacked Passwords

July 12, 2018
1,076 Comments

Here’s a clever new twist on an old email scam that could serve to make the con far more believable. The message purports to have been sent from a hacker who’s compromised your computer and used your webcam to record a video of you while you were watching porn. The missive threatens to release the video to all your contacts unless you pay a Bitcoin ransom. The new twist? The email now references a real password previously tied to the recipient’s email address.

The basic elements of this sextortion scam email have been around for some time, and usually the only thing that changes with this particular message is the Bitcoin address that frightened targets can use to pay the amount demanded. But this one begins with an unusual opening salvo:

“I’m aware that <substitute password formerly used by recipient here> is your password,” reads the salutation.

The rest is formulaic:

You don’t know me and you’re thinking why you received this e mail, right?

Well, I actually placed a malware on the porn website and guess what, you visited this web site to have fun (you know what I mean). While you were watching the video, your web browser acted as a RDP (Remote Desktop) and a keylogger which provided me access to your display screen and webcam. Right after that, my software gathered all your contacts from your Messenger, Facebook account, and email account.

What exactly did I do?

I made a split-screen video. First part recorded the video you were viewing (you’ve got a fine taste haha), and next part recorded your webcam (Yep! It’s you doing nasty things!).

What should you do?

Well, I believe, $1400 is a fair price for our little secret. You’ll make the payment via Bitcoin to the below address (if you don’t know this, search “how to buy bitcoin” in Google).

BTC Address: 1Dvd7Wb72JBTbAcfTrxSJCZZuf4tsT8V72
(It is cAsE sensitive, so copy and paste it)

Important:

You have 24 hours in order to make the payment. (I have an unique pixel within this email message, and right now I know that you have read this email). If I don’t get the payment, I will send your video to all of your contacts including relatives, coworkers, and so forth. Nonetheless, if I do get paid, I will erase the video immidiately. If you want evidence, reply with “Yes!” and I will send your video recording to your 5 friends. This is a non-negotiable offer, so don’t waste my time and yours by replying to this email.

Continue reading →

Notorious ‘Hijack Factory’ Shunned from Web

July 11, 2018
30 Comments

Score one for the good guys: Bitcanal, a Portuguese Web hosting firm long accused of helping spammers hijack large swaths of dormant Internet address space over the years, was summarily kicked off the Internet this week after a half-dozen of the company’s bandwidth providers chose to sever ties with the company.

Spammers and Internet service providers (ISPs) that facilitate such activity often hijack Internet address ranges that have gone unused for periods of time. Dormant or “unannounced” address ranges are ripe for abuse partly because of the way the global routing system works: Miscreants can “announce” to the rest of the Internet that their hosting facilities are the authorized location for given Internet addresses. If nothing or nobody objects to the change, the Internet address ranges fall into the hands of the hijacker.

For years, security researchers have tracked the suspected theft of millions of IPv4 Internet addresses back to Bitcanal, which was also doing business under the name “Ebony Horizon.” Experts say shortly after obtaining a chunk of IP addresses, Bitcanal would apparently sell or lease the space to spammers, who would then begin sending junk email from those addresses — taking full advantage of the good or at least neutral Internet reputation of the previous owner to evade anti-spam blacklists.

Much of the hijacked address space routed by Bitcanal was once assigned to business entities that no longer exist. But some of the more brazen hijacks attributed to Bitcanal and its customers involved thousands of Internet addresses assigned to active organizations, such as the company’s well-documented acquisition of address space assigned to the Texas State Attorney General’s office, as well as addresses managed by the U.S. Department of Defense.

Bitcanal’s reputation finally caught up with the company late last month, when anti-spam activist and researcher Ron Guilmette documented yet another new major IP address hijack at the company and challenged Bitcanal’s upstream Internet providers to stop routing traffic for it (KrebsOnSecurity has published several stories about previous high-profile IP address hijacks involving spammers who were flagged by Guilmette).

Guilmette said Bitcanal and its proprietor — Portuguese businessman Joao Silveira — have a well-documented history of “behaving badly and coloring outside the lines for literally years.”

“His actions in absconding with other people’s IP address space, over the years, are those of either a spoiled child or else those of a sociopath, depending on one’s personal point of view,” Guilmette said. “In either case the Internet will, by and large, be glad to see his backside, and will be better off without him.”

Doug Madory, a researcher for Internet performance management firm Dyn (now owned by Oracle), published a blog post chronicling Bitcanal’s history as an address “hijack factory.” That post also documents the gradual ostracization of Bitcanal over the past week, as one major Internet exchange after another pulled the plug on the company.

Dyn’s depiction of Bitcanal’s final remaining upstream Internet provider pulling the plug on the company on July 10, effectively severing it from existence on the Web. Source: Dyn.

Reached for comment just days before Bitcanal was shunned by all of its peering providers, Mr. Silveira expressed shock and surprise over what he called unfair attacks against his company’s reputation. He blamed the besmirchment on one or two “bad” customers who abused his service over the years.

“My thought is that one or two customer in my network maybe [imitated] people acting like a client and force the errors or injecting bad network space,” Silveira said in an emailed response to KrebsOnSecurity. “I am not the problem and this public trial and conviction will not solve the prefix hijacking matter. If these questions remain without solution, those actors will keep doing it.” Continue reading →