Krebs on Security

Thieves Used Infrared to Pull Data from ATM ‘Insert Skimmers’

July 13, 2017

A greater number of ATM skimming incidents now involve so-called “insert skimmers,” wafer-thin fraud devices made to fit snugly and invisibly inside a cash machine’s card acceptance slot. New evidence suggests that at least some of these insert skimmers — which record card data and store it on a tiny embedded flash drive — are equipped with technology allowing them to transmit stolen card data wirelessly via infrared, the same communications technology that powers a TV remote control.

Last month the Oklahoma City metropolitan area experienced rash of ATM attacks involving insert skimmers. The local KFOR news channel on June 28, 2017 ran a story stating that at least four banks in the area were hit with insert skimmers.

The story quoted a local police detective saying “the skimmer contains an antenna which transmits your card information to a tiny camera hidden somewhere outside the ATM.”

Financial industry sources tell KrebsOnSecurity that preliminary analysis of the insert skimmers used in the attacks suggests they were configured to transmit stolen card data wirelessly to the hidden camera using infrared, a short-range communications technology most commonly found in television remote controls.

Here’s a look at one of the insert skimmers that Oklahoma authorities recently seized from a compromised ATM:

An insert skimmer retrieved from a compromised cash machine in Oklahoma City. Image: KrebsOnSecurity.com.

In such an attack, the hidden camera has a dual function: To record time-stamped videos of ATM users entering their PINs; and to receive card data recorded and transmitted by the insert skimmer. In this scenario, the fraudster could leave the insert skimmer embedded in the ATM’s card acceptance slot, and merely swap out the hidden camera whenever its internal battery is expected to be depleted.

Of course, the insert skimmer also operates on an embedded battery, but according to my sources the skimmer in question was designed to turn on only when someone uses the cash machine, thereby preserving the battery.

Thieves involved in skimming attacks have hidden spy cameras in some pretty ingenious places, such as a brochure rack to the side of the cash machine or a safety mirror affixed above the cash machine (some ATMs legitimately place these mirrors so that customers will be alerted if someone is standing behind them at the machine). Continue reading →

Adobe, Microsoft Push Critical Security Fixes

July 11, 2017

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It’s Patch Tuesday, again. That is, if you run Microsoft Windows or Adobe products. Microsoft issued a dozen patch bundles to fix at least 54 security flaws in Windows and associated software. Separately, Adobe’s got a new version of its Flash Player available that addresses at least three vulnerabilities.

The updates from Microsoft concern many of the usual program groups that seem to need monthly security fixes, including Windows, Internet Explorer, Edge, Office, .NET Framework and Exchange.

According to security firm Qualys, the Windows update that is most urgent for enterprises tackles a critical bug in the Windows Search Service that could be exploited remotely via the SMB file-sharing service built into both Windows workstations and servers.

Qualys says the issue affects Windows Server 2016, 2012, 2008 R2, 2008 as well as desktop systems like Windows 10, 7 and 8.1.

“While this vulnerability can leverage SMB as an attack vector, this is not a vulnerability in SMB itself, and is not related to the recent SMB vulnerabilities leveraged by EternalBlue, WannaCry, and Petya.” Qualys notes, referring to the recent rash of ransomware attacks which leveraged similar vulnerabilities.

Other critical fixes of note in this month’s release from Microsoft include at least three vulnerabilities in Microsoft’s built-in browser — Edge or Internet Explorer depending on your version of Windows. There are at least three serious flaws in these browsers that were publicly detailed prior to today’s release, suggesting that malicious hackers may have had some advance notice on figuring out how to exploit these weaknesses.

As it is accustomed to doing on Microsoft’s Patch Tuesday, Adobe released a new version of its Flash Player browser plugin that addresses a trio of flaws in that program.

The latest update brings Flash to v. 26.0.0.137 for Windows, Mac and Linux users alike. If you have Flash installed, you should update, hobble or remove Flash as soon as possible. To see which version of Flash your browser may have installed, check out this page. Continue reading →

Self-Service Food Kiosk Vendor Avanti Hacked

July 8, 2017

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Avanti Markets, a company whose self-service payment kiosks sit beside shelves of snacks and drinks in thousands of corporate breakrooms across America, has suffered of breach of its internal networks in which hackers were able to push malicious software out to those payment devices, the company has acknowledged. The breach may have jeopardized customer credit card accounts as well as biometric data, Avanti warned.

According to Tukwila, Wash.-based Avanti’s marketing literature, some 1.6 million customers use the company’s break room self-checkout devices — which allow customers to pay for drinks, snacks and other food items with a credit card, fingerprint scan or cash.

An Avanti Markets kiosk. Image: Avanti

Sometime in the last few hours, Avanti published a “notice of data breach” on its Web site.

“On July 4, 2017, we discovered a sophisticated malware attack which affected kiosks at some Avanti Markets. Based on our investigation thus far, and although we have not yet confirmed the root cause of the intrusion, it appears the attackers utilized the malware to gain unauthorized access to customer personal information from some kiosks. Because not all of our kiosks are configured or used the same way, personal information on some kiosks may have been adversely affected, while other kiosks may not have been affected.”

Avanti said it appears the malware was designed to gather certain payment card information including the cardholder’s first and last name, credit/debit card number and expiration date.

Breaches at point-of-sale vendors have become almost regular occurrences over the past few years, but this breach is especially notable as it may also have jeopardized customer biometric data. That’s because the newer Avanti kiosk systems allow users to pay using a scan of their fingerprint.

“In addition, users of the Market Card option may have had their names and email addresses compromised, as well as their biometric information if they used the kiosk’s biometric verification functionality,” the company warned.

On Thursday, KrebsOnSecurity learned from a source at a law firm that the food vending machine in its employee lunchroom was no longer able to accept credit cards. The source said his firm’s information technology personnel told him the credit card functionality had been temporarily disabled because of a breach at Avanti.

Another source told this author that Avanti’s corporate network had been breached, and that Avanti had made the decision to turn off all self-checkouts for now — although the source said customers could still use cash at the machines.

“I was told that about half of the self-checkouts do not have P2Pe,” the source said, on condition of anonymity. P2Pe is short for “point-to-point encryption,” and it’s a technological solution that encrypts sensitive data such as credit card information at every point in the card transaction. In theory, P2Pe should to be able to protect card data even if there is malicious software resident on the device or network in question.

Avanti said in its notice that it had shut down payment processing at some locations, and that the company was working with its operators to purge infected systems of any malware from the attack and to take steps to “substantially minimize the risk of a data compromise in the future.”

THE MALWARE

On Friday evening, security firm RiskAnalytics published a blog post that detailed an experience from a customer who shared a remarkably similar experience to the one referenced by the anonymous law firm source above.

RiskAnalytics’s Noah Dunker wrote that the company’s technology on July 4 flagged suspicious behavior by a break room vending kiosk. Further inspection of the device and communications traffic emanating from it revealed it was infected with a family of point-of-sale malware known as PoSeidon (a.k.a. “FindPOS”) that siphons credit card data from point-of-sale devices.

“In our analysis of the incident, it seems most likely that the larger vendor was compromised, and some or all of the kiosks maintained by local vendors were impacted,” Dunker wrote. “We’ve been able to identify at least two smaller vendors with local operations that have been impacted in two different cities though we are not naming any impacted vendors yet, as we’ve been unable to contact them directly.”

KrebsOnSecurity reached out to RiskAnalytics to see if the vendor of the snack machine used by the victim organization he wrote about also was Avanti. Dunker confirmed that the kiosk vendor that was the subject of his post was indeed Avanti.

Dunker noted that much like point-of-sale devices at many restaurant chains, these snack machines usually are installed and managed by third-party technology companies, adding another layer of complexity to the challenge of securing these devices from hackers.

Dunker said RiskAnalytics first noticed something wasn’t right with its client’s break room snack machine after it began sending data out of the client’s network using an SSL encryption certificate that has long been associated with cybercrime activity — including ransomware activity dating back to 2015.

“This is a textbook example of an ‘Internet of Things’ (IoT) threat: A network-connected device, controlled and maintained by a third party, which cannot be easily patched, audited, or controlled by your own IT staff,” Dunker wrote. Continue reading →

B&B Theatres Hit in 2-Year Credit Card Breach

July 7, 2017

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B&B Theatres, a company that owns and operates the 7th-largest theater chain in America, says it is investigating a breach of its credit card systems. The acknowledgment comes just days after KrebsOnSecurity reached out to the company for comment on reports from financial industry sources who said they suspected the cinema chain has been leaking customer credit card data to cyber thieves for the past two years.

bandb Headquartered in Gladstone, Missouri, B&B Theatres operates approximately 400 screens across 50 locations in seven states, including Arkansas, Arizona, Florida, Kansas, Missouri, Mississippi, Nebraska, Oklahoma and Texas.

In a written statement forwarded by B&B spokesman Paul Farnsworth, the company said B&B Theatres was made aware of a potential breach by a local banking partner in one of its communities.

“Upon being notified we immediately engaged Trustwave, a third party security firm recommended to B&B by partners at major credit card brands, to work with our internal I.T. resources to contain the breach and mitigate any further potential penetration,” the statement reads. “While some malware was identified on B&B systems that dated back to 2015, the investigation completed by Trustwave did not conclude that customer data was at risk on all B&B systems for the entirety of the breach.”

The statement continued:

“Trustwave’s investigation has since shown the breach to be contained to the satisfaction of our processing partners as well as the major credit card brands. B&B Theatres values the security of our customer’s data and will continue to implement the latest available technologies to keep our networks & systems secure into the future.”

In June, sources at two separate U.S.-based financial institutions reached out to KrebsOnSecurity about alerts they’d received privately from the credit card associations regarding lists of card numbers that were thought to have been compromised in a recent breach.

The credit card companies generally do not tell financial institutions in these alerts which merchants got breached, leaving banks and credit unions to work backwards from those lists of compromised cards to a so-called “common point-of-purchase” (CPP).

In addition to lists of potentially compromised card numbers, the card associations usually include a “window of exposure” — their best estimate of how long the breach lasted. Two financial industry sources said initial reports from the credit card companies said the window of exposure at B&B Theatres was between Sept. 1, 2015 and April 7, 2017.

However, a more recent update to this advisory shared by my sources shows that the window of exposure is currently estimated between April 2015 and April 2017, meaning cyber thieves have likely been siphoning credit and debit card data from B&B Theatres customers for nearly two years undisturbed. Continue reading →

Who is the GovRAT Author and Mirai Botmaster ‘Bestbuy’?

July 5, 2017

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In February 2017, authorities in the United Kingdom arrested a 29-year-old U.K. man on suspicion of knocking more than 900,000 Germans offline in an attack tied to Mirai, a malware strain that enslaves Internet of Things (IoT) devices like security cameras and Internet routers for use in large-scale cyberattacks. Investigators haven’t yet released the man’s name, but news reports suggest he may be better known by the hacker handle “Bestbuy.” This post will follow a trail of clues back to one likely real-life identity of Bestbuy.

At the end of November 2016, a modified version of Mirai began spreading across the networks of German ISP Deutsche Telekom. This version of the Mirai worm spread so quickly that the very act of scanning for new infectable hosts overwhelmed the devices doing the scanning, causing outages for more than 900,000 customers. The same botnet had previously been tied to attacks on U.K. broadband providers Post Office and Talk Talk.

dtoutage

Security firm Tripwire published a writeup on that failed Mirai attack, noting that the domain names tied to servers used to coordinate the activities of the botnet were registered variously to a “Peter Parker” and “Spider man,” and to a street address in Israel (27 Hofit St). We’ll come back to Spider Man in a moment.

According to multiple security firms, the Mirai botnet responsible for the Deutsche Telekom outage was controlled via servers at the Internet address 62.113.238.138. Farsight Security, a company that maps which domain names are tied to which Internet addresses over time, reports that this address has hosted just nine domains.

The only one of those domains that is not related to Mirai is dyndn-web[dot]com, which according to a 2015 report from BlueCoat (now Symantec) was a domain tied to the use and sale of a keystroke logging remote access trojan (RAT) called “GovRAT.” The trojan is documented to have been used in numerous cyber espionage campaigns against governments, financial institutions, defense contractors and more than 100 corporations.

Another report on GovRAT — this one from security firm InfoArmor — shows that the GovRAT malware was sold on Dark Web cybercrime forums by a hacker or hackers who went by the nicknames BestBuy and “Popopret” (some experts believe these were just two different identities managed by the same cybercriminal).

The hacker “bestbuy” selling his GovRAT trojan on the dark web forum “Hell.” Image: InfoArmor.

GovRAT has been for sale on various other malware and exploit-related sites since at least 2014. On oday[dot]today, for example, GovRAT was sold by a user who picked the nickname Spdr, and who used the email address spdr01@gmail.com.

Recall that the domains used to control the Mirai botnet that hit Deutsche Telekom all had some form of Spider Man in the domain registration records. Also, recall that the controller used to manage the GovRAT trojan and that Mirai botnet were both at one time hosted on the same server with just a handful of other (Mirai-related) domains.

According to a separate report (PDF) from InfoArmor, GovRAT also was sold alongside a service that allows anyone to digitally sign their malware using code-signing certificates stolen from legitimate companies. InfoArmor said the digital signature it found related to the service was issued to an open source developer Singh Aditya, using the email address parkajackets@gmail.com.

Interestingly, both of these email addresses — parkajackets@gmail.com and spdr01@gmail.com — were connected to similarly-named user accounts at vDOS, for years the largest DDoS-for-hire service (that is, until KrebsOnSecurity last fall outed its proprietors as two 18-year-old Israeli men).

Last summer vDOS got massively hacked, and a copy of its user and payments databases was shared with this author and with U.S. federal law enforcement agencies. The leaked database shows that both of those email addresses are tied to accounts on vDOS named “bestbuy” (bestbuy and bestbuy2).

Spdr01’s sales listing for the GovRAT trojan on a malware and exploits site shows he used the email address spdr01@gmail.com

The leaked vDOS database also contained detailed records of the Internet addresses that vDOS customers used to log in to the attack-for-hire service. Those logs show that the bestbuy and bestbuy2 accounts logged in repeatedly from several different IP addresses in the United Kingdom and in Hong Kong.

The technical support logs from vDOS indicate that the reason the vDOS database shows two different accounts named “bestbuy” is the vDOS administrators banned the original “bestbuy” account after it was seen logged into the account from both the UK and Hong Kong. Bestbuy’s pleas to the vDOS administrators that he was not sharing the account and that the odd activity could be explained by his recent trip to Hong Kong did not move them to refund his money or reactivate his original account.

A number of clues in the data above suggest that the person responsible for both this Mirai botnet and GovRAT had ties to Israel. For one thing, the email address spdr01@gmail.com was used to register at least three domain names, all of which are tied back to a large family in Israel. What’s more, in several dark web postings, Bestbuy can be seen asking if anyone has any “weed for sale in Israel,” noting that he doesn’t want to risk receiving drugs in the mail.

The domains tied to spdr01@gmail.com led down a very deep rabbit hole that ultimately went nowhere useful for this investigation. But it appears the nickname “spdr01” and email spdr01@gmail.com was used as early as 2008 by a core member of the Israeli hacking forum and IRC chat room Binaryvision.co.il. Continue reading →

Is it Time to Can the CAN-SPAM Act?

July 2, 2017

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Regulators at the U.S. Federal Trade Commission (FTC) are asking for public comment on the effectiveness of the CAN-SPAM Act, a 14-year-old federal law that seeks to crack down on unsolicited commercial email. Judging from an unscientific survey by this author, the FTC is bound to get an earful.

spamspamspam

Signed into law by President George W. Bush in 2003, the “Controlling the Assault of Non-Solicited Pornography and Marketing Act” was passed in response to a rapid increase in junk email marketing.

The law makes it a misdemeanor to spoof the information in the “from:” field of any marketing message, and prohibits the sending of sexually-oriented spam without labeling it “sexually explicit.” The law also requires spammers to offer recipients a way to opt-out of receiving further messages, and to process unsubscribe requests within 10 business days.

The “CAN” in CAN-SPAM was a play on the verb “to can,” as in “to put an end to,” or “to throw away,” but critics of the law often refer to it as the YOU-CAN-SPAM Act, charging that it essentially legalized spamming. That’s partly because the law does not require spammers to get permission before they send junk email. But also because the act prevents states from enacting stronger anti-spam protections, and it bars individuals from suing spammers except under laws not specific to email.

Those same critics often argue that the law is rarely enforced, although a search on the FTC’s site for CAN-SPAM press releases produces quite a few civil suits brought by the commission against marketers over the years. Nevertheless, any law affecting Internet commerce is bound to need a few tweaks over the years, and CAN-SPAM has been showing its age for some time now.

Ron Guilmette, an anti-spam activists whose work has been profiled extensively on this blog, didn’t sugar-coat it, calling CAN-SPAM “a travesty that was foisted upon the American people by a small handful of powerful companies, most notably AOL and Microsoft, and by their obedient lackeys in Congress.”

According to Guilmette, the Act was deliberately fashioned so as to nullify California’s more restrictive anti-spam law, and it made it impossible for individual victims of spam to sue spam senders. Rather, he said, that right was reserved only for the same big companies that lobbied heavily for the passage of the CAN-SPAM Act.

“The entire Act should be thrown out and replaced,” Guilmette said. “It hasn’t worked to control spam, and it has in fact only served to make the problem worse.”

In the fix-it-don’t-junk-it camp is Joe Jerome, policy counsel for the Electronic Frontier Foundation (EFF), a nonprofit digital rights advocacy group. Jerome allowed that CAN-SPAM is far from perfect, but he said it has helped to set some ground rules.

“In her announcement on this effort, Acting Chairman Ohlhausen hinted that regulations can be excessive, outdated, or unnecessary,” Jerome said. “Nothing can be further from the case with respect to spam. CAN-SPAM was largely ineffective in stopping absolutely bad, malicious spammers, but it’s been incredibly important in creating a baseline for commercial email senders. Advertising transparency and easy opt-outs should not be viewed as a burden on companies, and I’d worry that weakening CAN-SPAM would set us back. If anything, we need stronger standards around opt-outs and quicker turn-around time, not less.” Continue reading →

So You Think You Can Spot a Skimmer?

June 30, 2017

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This week marks the 50th anniversary of the automated teller machine — better known to most people as the ATM or cash machine. Thanks to the myriad methods thieves have devised to fleece unsuspecting cash machine users over the years, there are now more ways than ever to get ripped off at the ATM. Think you’re good at spotting the various scams? A newly released ATM fraud inspection guide may help you test your knowledge.

The first cash machine opened for business on June 27, 1967 at a Barclays bank branch in Enfield, north London, but ATM transactions back then didn’t remotely resemble the way ATMs work today.

The first ATM was installed in Enfield, in North London, on June 27, 1967. Image: Barclays Bank.

The cash machines of 1967 relied not on plastic cards but instead on paper checks that the bank would send to customers in the mail. Customers would take those checks — which had little punched-card holes printed across the surface — and feed them into the ATM, which would then validate the checks and dispense a small amount of cash.

This week, Barclay’s turned the ATM at the same location into a gold color to mark its golden anniversary, dressing the machine with velvet ropes and a red carpet leading up to the machine’s PIN pad.

The location of the world's first ATM, turned to gold to commemorate the cash machine's golden anniversary. Image: Barclays Bank.

The location of the world’s first ATM, turned to gold and commemorated with a plaque to mark the cash machine’s golden anniversary. Image: Barclays Bank.

Chances are, the users of that gold ATM have little to worry about from skimmer scammers. But the rest of us practically need a skimming-specific dictionary to keep up with today’s increasingly ingenious thieves.

These days there are an estimated three million ATMs around the globe, and a seemingly endless stream of innovative criminal skimming devices has introduced us over the years to a range of terms specific to cash machine scams like wiretapping, eavesdropping, card-trapping, cash-trapping, false fascias, shimming, black box attacks, bladder bombs (pump skimmers), gas attacks, and deep insert skimmers.

Think you’ve got what it takes to spot the telltale signs of a skimmer? Then have a look at the ATM Fraud Inspection Guide (PDF) from cash machine giant NCR Corp., which briefly touches on the most common forms of ATM skimming and their telltale signs.

For example, below are a few snippets from that guide showing different cash trapping devices made to siphon bills being dispensed from the ATM.

Cash-trapping devices. Source: NCR.

Continue reading →

‘Petya’ Ransomware Outbreak Goes Global

June 27, 2017

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A new strain of ransomware dubbed “Petya” is worming its way around the world with alarming speed. The malware is spreading using a vulnerability in Microsoft Windows that the software giant patched in March 2017 — the same bug that was exploited by the recent and prolific WannaCry ransomware strain.

The ransom note that gets displayed on screens of Microsoft Windows computers infected with Petya.

According to multiple news reports, Ukraine appears to be among the hardest hit by Petya. The country’s government, some domestic banks and largest power companies all warned today that they were dealing with fallout from Petya infections.

Danish transport and energy firm Maersk said in a statement on its Web site that “We can confirm that Maersk IT systems are down across multiple sites and business units due to a cyber attack.” In addition, Russian energy giant Rosneft said on Twitter that it was facing a “powerful hacker attack.” However, neither company referenced ransomware or Petya.

Security firm Symantec confirmed that Petya uses the “Eternal Blue” exploit, a digital weapon that was believed to have been developed by the U.S. National Security Agency and in April 2017 leaked online by a hacker group calling itself the Shadow Brokers.

Microsoft released a patch for the Eternal Blue exploit in March (MS17-010), but many businesses put off installing the fix. Many of those that procrastinated were hit with the WannaCry ransomware attacks in May. U.S. intelligence agencies assess with medium confidence that WannaCry was the work of North Korean hackers.

Organizations and individuals who have not yet applied the Windows update for the Eternal Blue exploit should patch now. However, there are indications that Petya may have other tricks up its sleeve to spread inside of large networks. Continue reading →

Got Robocalled? Don’t Get Mad; Get Busy.

June 25, 2017

201 Comments

Several times a week my cell phone receives the telephonic equivalent of spam: A robocall. On each occasion the call seems to come from a local number, but when I answer there is that telltale pause followed by an automated voice pitching some product or service. So when I heard from a reader who chose to hang on the line and see where one of these robocalls led him, I decided to dig deeper. This is the story of that investigation. Hopefully, it will inspire readers to do their own digging and help bury this annoying and intrusive practice.

robocall The reader — Cedric (he asked to keep his last name out of this story) had grown increasingly aggravated with the calls as well, until one day he opted to play along by telling a white lie to the automated voice response system that called him: Yes, he said, yes he definitely was interested in credit repair services.

“I lied about my name and played like I needed credit repair to buy a home,” Cedric said. “I eventually wound up speaking with a representative at creditfix.com.”

The number that called Cedric — 314-754-0123 — was not in service when Cedric tried it back, suggesting it had been spoofed to make it look like it was coming from his local area. However, pivoting off of creditfix.com opened up some useful avenues of investigation.

Creditfix is hosted on a server at the Internet address 208.95.62.8. According to records maintained by Farsight Security — a company that tracks which Internet addresses correspond to which domain names — that server hosts or recently hosted dozens of other Web sites (the full list is here).

Most of these domains appear tied to various credit repair services owned or run by a guy named Michael LaSala and registered to a mail drop in Las Vegas. Looking closer at who owns the 208.95.62.8 address, we find it is registered to System Admin, LLC, a Florida company that lists LaSala as a manager, according to a lookup at the Florida Secretary of State’s office.

An Internet search for the company’s address turns up a filing by System Admin LLC with the U.S. Federal Communications Commission (FCC). That filing shows that the CEO of System Admin is Martin Toha, an entrepreneur probably best known for founding voip.com, a voice-over-IP (VOIP) service that allows customers to make telephone calls over the Internet.

Emails to the contact address at Creditfix.com elicited a response from a Sean in Creditfix’s compliance department. Sean told KrebsOnSecurity that mine was the second complaint his company had received about robocalls. Sean said he was convinced that his employer was scammed by a lead generation company that is using robocalls to quickly and illegally gin up referrals, which generate commissions for the lead generation firm.

Creditfix said the robocall leads it received appear to have been referred by Little Brook Media, a marketing firm in New York City. Little Brook Media did not respond to multiple requests for comment.

Robocalls are permitted for political candidates, but beyond that if the recording is a sales message and you haven’t given your written permission to get calls from the company on the other end, the call is illegal. According to the Federal Trade Commission (FTC), companies are using auto-dialers to send out thousands of phone calls every minute for an incredibly low cost. Continue reading →

FBI: Extortion, CEO Fraud Among Top Online Fraud Complaints in 2016

June 23, 2017

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Online extortion, tech support scams and phishing attacks that spoof the boss were among the most costly cyber scams reported by consumers and businesses last year, according to new figures from the FBI’s Internet Crime Complaint Center (IC3).

The IC3 report released Thursday correctly identifies some of the most prevalent and insidious forms of cybercrimes today, but the total financial losses tied to each crime type also underscore how infrequently victims actually report such crimes to law enforcement.

Source: Internet Crime Complaint Center (IC3).

For example, the IC3 said it received 17,146 extortion-related complaints, with an adjusted financial loss totaling just over $15 million. In that category, the report identified 2,673 complaints identified as ransomware — malicious software that scrambles a victim’s most important files and holds them hostage unless and until the victim pays a ransom (usually in a virtual currency like Bitcoin).

According to the IC3, the losses associated with those ransomware complaints totaled slightly more than $2.4 million. Writing for BleepingComputer.com — a tech support forum I’ve long recommended that helps countless ransomware victims — Catalin Cimpanu observes that the FBI’s ransomware numbers “are ridiculously small compared to what happens in the real world, where ransomware is one of today’s most prevalent cyber-threats.”

“The only explanation is that people are paying ransoms, restoring from backups, or reinstalling PCs without filing a complaint with authorities,” Cimpanu writes.

It’s difficult to know how what percentage of ransomware victims paid the ransom or were able to restore from backups, but one thing is for sure: Relatively few victims are reporting cyber fraud to federal investigators.

The report notes that only an estimated 15 percent of the nation’s fraud victims report their crimes to law enforcement. For 2016, 298,728 complaints were received, with a total victim loss of $1.33 billion.

If that 15 percent estimate is close to accurate, that means the real cost of cyber fraud for Americans last year was probably closer to $9 billion, and the losses from ransomware attacks upwards of $16 million. Continue reading →

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