Payments Giant Verifone Investigating Breach

March 7, 2017

Credit and debit card payments giant Verifone [NYSE: PAY] is investigating a breach of its internal computer networks that appears to have impacted a number of companies running its point-of-sale solutions, according to sources. Verifone says the extent of the breach was limited to its corporate network and that its payment services network was not impacted.

San Jose, Calif.-based Verifone is the largest maker of credit card terminals used in the United States. It sells point-of-sale terminals and services to support the swiping and processing of credit and debit card payments at a variety of businesses, including retailers, taxis, and fuel stations.

On Jan. 23, 2017, Verifone sent an “urgent” email to all company staff and contractors, warning they had 24 hours to change all company passwords.

“We are currently investigating an IT control matter in the Verifone environment,” reads an email memo penned by Steve Horan, Verifone Inc.’s senior vice president and chief information officer. “As a precaution, we are taking immediate steps to improve our controls.”

An internal memo sent by Verifone's chief information officer to all staff and contractors, telling them to change their passwords. The memo also users would no longer be able to install software at will, apparently something everyone at the company could do prior to this notice.

An internal memo sent Jan. 23, 2017 by Verifone’s chief information officer to all staff and contractors, telling them to change their passwords. The memo also states that Verifone employees would no longer be able to install software at will, apparently something everyone at the company could do prior to this notice.

The internal Verifone memo — a copy of which was obtained by KrebsOnSecurity and is pictured above — also informed employees they would no longer be allowed to install software of any kind on company computers and laptops.

Asked about the breach reports, a Verifone spokesman said the company saw evidence in January 2017 of an intrusion in a “limited portion” of its internal network, but that the breach never impacted its payment services network.

An ad tied to Verifone's petroleum services point-of-sale offerings.

An ad tied to Verifone’s petroleum services point-of-sale offerings.

“In January 2017, Verifone’s information security team saw evidence of a limited cyber intrusion into our corporate network,” Verifone spokesman Andy Payment said. “Our payment services network was not impacted. We immediately began work to determine the type of information targeted and executed appropriate measures in response. We believe today that due to our immediate response, the potential for misuse of information is limited.”

Verifone’s Mr. Payment declined to answer additional questions about the breach, such as how Verifone learned about it and whether the company was initially notified by an outside party. But a source with knowledge of the matter told KrebsOnSecurity.com that the employee alert Verifone sent out on Jan, 23, 2017 was in response to a notification that Verifone received from the credit card companies Visa and Mastercard just days earlier in January.

A spokesperson for Visa declined to comment for this story. MasterCard officials did not respond to requests for comment.

According to my source, the intrusion impacted at least one corner of Verifone’s business: A customer support unit based in Clearwater, Fla. that provides comprehensive payment solutions specifically to gas and petrol stations throughout the United States — including, pay-at-the-pump credit card processing; physical cash registers inside the fuel station store; customer loyalty programs; and remote technical support.

The source said his employer shared with the card brands evidence that a Russian hacking group known for targeting payment providers and hospitality firms had compromised at least a portion of Verifone’s internal network.

The source says Visa and MasterCard were notified that the intruders appeared to have been inside of Verifone’s network since mid-2016. The source noted there is ample evidence the attackers used some of the same toolsets and infrastructure as the cybercrime gang that last year is thought to have hacked into Oracle’s MICROS division, a unit of Oracle that provides point-of-sale solutions to hundreds of thousands of retailers and hospitality firms.

Founded in Hawaii, U.S. in 1981, Verifone now operates in more than 150 countries worldwide and employ nearly 5,000 people globally.

Update, 1:17 p.m. ET: Verifone circled back post-publication with the following update to their statement: “According to the forensic information to-date, the cyber attempt was limited to controllers at approximately two dozen gas stations, and occurred over a short time frame. We believe that no other merchants were targeted and the integrity of our networks and merchants’ payment terminals remain secure and fully operational.”

Sources told KrebsOnSecurity that Verifone commissioned an investigation of the breach from Foregenix Ltd., a digital forensics firm based in the United Kingdom that lists Verifone as a “strategic partner.” Foregenix declined to comment for this story.

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Ransomware for Dummies: Anyone Can Do It

March 1, 2017

Among today’s fastest-growing cybercrime epidemics is “ransomware,” malicious software that encrypts your computer files, photos, music and documents and then demands payment in Bitcoin to recover access to the files. A big reason for the steep increase in ransomware attacks in recent years comes from the proliferation of point-and-click tools sold in the cybercrime underground that make it stupid simple for anyone to begin extorting others for money.

Recently, I came across an extremely slick and professionally produced video advertisement promoting the features and usability of “Philadelphia,” a ransomware-as-a-service crimeware package that is sold for roughly $400 to would-be cybercriminals who dream of carving out their own ransomware empires.

This stunning advertisement does a thorough job of showcasing Philadelphia’s many features, including the ability to generate PDF reports and charts of victims “to track your malware campaigns” as well as the ability to plot victims around the world using Google Maps.

“Everything just works,” claim the proprietors of Philadelphia. “Get your lifetime copy. One payment. Free updates. No monthly fees.”

One interesting feature of this ransomware package is the ability to grant what the program’s architects call “mercy.” This refers to the desperate and heartbreaking pleas that ransomware purveyors often hear from impecunious victims whose infections have jeopardized some priceless and irreplaceable data — such as photos of long lost loved ones.

I’ll revisit the authors of this ransomware package in a future post. For now, just check out their ad. It’s fairly chilling.

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More on Bluetooth Ingenico Overlay Skimmers

February 26, 2017

This blog has featured several stories about “overlay” card and PIN skimmers made to be placed atop Ingenico-brand card readers at store self-checkout lanes. I’m revisiting the topic again because a security technician at a U.S.-based retailer recently shared a few photos of several of these devices pulled from compromised card terminals, and the images and his story offer a fair bit more detail than in previous articles.

An "overlay" skimming device (right) that was found attached to a card reader at a retail establishment.

An “overlay” skimming device (right) that was found attached to a card reader at a retail establishment.

The device featured here is a Bluetooth-based skimmer; it is designed to steal both the card data when a customer swipes and to record the victim’s PIN using a PIN pad overlay.

The Bluetooth component of the skimmer allows the thieves to retrieve stolen data wirelessly via virtually any Bluetooth enabled device — just by being in proximity to the compromised card terminal (~30 meters).

If we look on the backside of this skimmer, we can see the electronics needed to intercept the PIN. The source who shared these pictures said an employee thought the PIN pad buttons were a little too difficult to press down, and soon discovered this plastic overlay and others just like it on two more self-checkout terminals.

PED1 Continue reading

iPhone Robbers Try to iPhish Victims

February 24, 2017

In another strange tale from the kinetic-attack-meets-cyberattack department, earlier this week I heard from a loyal reader in Brazil whose wife was recently mugged by three robbers who nabbed her iPhone. Not long after the husband texted the stolen phone — offering to buy back the locked device — he soon began receiving text messages stating the phone had been found. All he had to do to begin the process of retrieving the device was click the texted link and log in to the phishing page mimicking Apple’s site.

applephish

Edu Rabin is a resident of Porto Alegre, the capital and largest city of the Brazilian state of Rio Grande do Sul in southern Brazil. Rabin said three thugs robbed his wife last Saturday in broad daylight. Thankfully, she was unharmed and all they wanted was her iPhone 5s.

Rabin said he then tried to locate the device using the “Find my iPhone” app.

“It was already in a nearby city, where the crime rates are even higher than mine,” Rabin said.

He said he then used his phone to send the robbers a message offering to buy back his wife’s phone.

“I’d sent a message with my phone number saying, ‘Dear mister robber, since you can’t really use the phone, I’m preparing to rebuy it from you. All my best!’ This happened on Saturday. On Sunday, I’d checked again the search app and the phone was still offline and at same place.”

But the following day he began receiving text messages stating that his phone had been recovered.

“On Monday, I’d started to receive SMS messages saying that my iphone had been found and a URL to reach it,” Rabin said. Here’s a screenshot of one of those texts:

buscariphonetext

The link led to a page that looks exactly like the Brazilian version of Apple’s sign-in page, but which is hosted on a site that allows free Web hosting.

fakeapple Continue reading

How to Bury a Major Breach Notification

February 21, 2017

Amid the hustle and bustle of the RSA Security Conference in San Francisco last week, researchers at RSA released a startling report that received very little press coverage relative to its overall importance. The report detailed a malware campaign that piggybacked on a popular piece of software used by system administrators at some of the nation’s largest companies. Incredibly, the report did not name the affected software, and the vendor in question has apparently chosen to bury its breach disclosure. This post is an attempt to remedy that.

The RSA report detailed the threat from a malware operation the company dubbed “Kingslayer.” According to RSA, the attackers compromised the Web site of a company that sells software to help Windows system administrators better parse and understand Windows event logs. RSA said the site hosting the event log management software was only compromised for two weeks — from April 9, 2015 to April 25, 2015 — but that the intrusion was likely far more severe than the short duration of the intrusion suggests.

That’s because in addition to compromising the download page for this software package, the attackers also hacked the company’s software update server, meaning any company that already had the software installed prior to the site compromise would likely have automatically downloaded the compromised version when the software regularly checked for available updates (as it was designed to do).

Image: RSA

Image: RSA

RSA said that in April 2016 it “sinkholed” or took control over the Web site that the malware used as a control server — oraclesoft[dot]net — and from there they were able to see indicators of which organizations might still be running the backdoored software. According to RSA, the victims included five major defense contractors; four major telecommunications providers; 10+ western military organizations; more than two dozen Fortune 500 companies; 24 banks and financial institutions; and at least 45 higher educational institutions.

RSA declined to name the software vendor whose site was compromised, but said the company issued a security notification on its Web site on June 30, 2016 and updated the notice on July 17, 2016 at RSA’s request following findings from further investigation into a defense contractor’s network. RSA also noted that the victim software firm had a domain name ending in “.net,” and that the product in question was installed as a Windows installer package file (.msi).

Using that information, it wasn’t super difficult to find the product in question. An Internet search for the terms “event log security notification april 2015” turns up a breach notification from June 30, 2016 about a software package called EVlog, produced by an Altair Technologies Ltd. in Mississauga, Ontario. The timeline mentioned in the breach notification exactly matches the timeline laid out in the RSA report.

As far as breach disclosures go, this one is about the lamest I’ve ever seen given the sheer number of companies that Altair Technologies lists on its site as subscribers to eventid.net, an online service tied to EVlog. I could not locate a single link to this advisory anywhere on the company’s site, nor could I find evidence that Altair Technologies had made any effort via social media or elsewhere to call attention to the security advisory; it is simply buried in the site. A screenshot of the original, much shorter, version of that notice is here. Continue reading

February Updates from Adobe, Microsoft

February 19, 2017

A handful of readers have inquired as to the whereabouts of Microsoft‘s usual monthly patches for Windows and related software. Microsoft opted to delay releasing any updates until next month, even though there is a zero-day vulnerability in Windows going around. However, Adobe did push out updates this week as per usual to fix critical issues in its Flash Player software.

brokenwindowsIn a brief statement this week, Microsoft said it “discovered a last minute issue that could impact some customers” that was not resolved in time for Patch Tuesday, which normally falls on the second Tuesday of each month. In an update to that advisory posted on Wednesday, Microsoft said it would deliver February’s batch of patches as part of the next regularly-scheduled Patch Tuesday, which falls on March 14, 2017.

On Feb. 2, the CERT Coordination Center at Carnegie Mellon University warned that an unpatched bug in a core file-sharing component of Windows (SMB) could let attackers crash Windows 8.1, and Windows 10 systems, as well as server equivalents of those platforms. CERT warned that exploit code for the flaw was already available online. Continue reading

Men Who Sent Swat Team, Heroin to My Home Sentenced

February 17, 2017

It’s been a remarkable week for cyber justice. On Thursday, a Ukrainian man who hatched a plan in 2013 to send heroin to my home and then call the cops when the drugs arrived was sentenced to 41 months in prison for unrelated cybercrime charges. Separately, a 19-year-old American who admitted to being part of a hacker group that sent a heavily-armed police force to my home in 2013 was sentenced to three years probation.

Sergei "Fly" Vovnenko, in an undated photo. In a letter to this author following his arrest, Vovnenko said he forgave me for "doxing" him -- printing his real name and image -- on my site.

Sergei “Fly” Vovnenko, in an undated photo. In a letter to this author following his arrest, Vovnenko said he forgave me for “doxing” him — printing his real name and image — on my site.

Sergey Vovnenko, a.k.a. “Fly,” “Flycracker” and “MUXACC1,” pleaded guilty last year to aggravated identity theft and conspiracy to commit wire fraud. Prosecutors said Vovnenko operated a network of more than 13,000 hacked computers, using them to harvest credit card numbers and other sensitive information.

When I first became acquainted with Vovnenko in 2013, Fly was the administrator of the fraud forum “thecc[dot]bz,” an exclusive and closely guarded Russian language board dedicated to financial fraud and identity theft.

After I secretly gained access to his forum, I learned he’d hatched a plot to have heroin sent to my home and to have one of his forum lackeys call the police when the drugs arrived.

I explained this whole ordeal in great detail in 2015, when Vovnenko initially was extradited from Italy to face charges here in the United States. In short, the antics didn’t end when I foiled his plot to get me arrested for drug possession, and those antics likely contributed to his arrest and to this guilty plea.

Vovnenko contested his extradition from Italy, and in so doing spent roughly 15 months in arguably Italy’s worst prison. During that time, he seemed to have turned his life around, sending me postcards at Christmas time and even an apparently heartfelt apology letter.

Seasons greetings from my pen pal, Flycracker.

Seasons greetings from my pen pal, Flycracker.

On Thursday, a judge in New Jersey sentenced Vovnenko to 41 months in prison, three years of supervised released and ordered him to pay restitution of $83,368. Continue reading

Who Ran Leakedsource.com?

February 15, 2017

Late last month, multiple news outlets reported that unspecified law enforcement officials had seized the servers for Leakedsource.com, perhaps the largest online collection of usernames and passwords leaked or stolen in some of the worst data breaches — including billions of credentials for accounts at top sites like LinkedIn and Myspace.

In a development that could turn out to be deeply ironic, it seems that the real-life identity of LeakedSource’s principal owner may have been exposed by many of the same stolen databases he’s been peddling.

The now-defunct Leakedsource service.

The now-defunct LeakedSource service.

LeakedSource in October 2015 began selling access to passwords stolen in high-profile breaches. Enter any email address on the site’s search page and it would tell you if it had a password corresponding to that address. However, users had to select a payment plan before viewing any passwords.

LeakedSource was a curiosity to many, and for some journalists a potential source of news about new breaches. But unlike services such as BreachAlarm and HaveIBeenPwned.com — which force users to verify that they can access a given account or inbox before the site displays whether it has found a password associated with the account in question — LeakedSource did nothing to validate users. This fact, critics charged, showed that the proprietors of LeakedSource were purely interested in making money and helping others pillage accounts.

I also was curious about LeakedSource, but for a different reason. I wanted to chase down something I’d heard from multiple sources: That one of the administrators of LeakedSource also was the admin of abusewith[dot]us, a site unabashedly dedicated to helping people hack email and online gaming accounts.

Abusewith[dot]us began in September 2013 as a forum for learning and teaching how to hack accounts at Runescape, a massively multiplayer online role-playing game (MMORPG) set in a medieval fantasy realm where players battle for kingdoms and riches.
runescape

The currency with which Runescape players buy and sell weapons, potions and other in-game items are virtual gold coins, and many of Abusewith[dot]us’s early members traded in a handful of commodities: Phishing kits and exploits that could be used to steal Runescape usernames and passwords from fellow players; virtual gold plundered from hacked accounts; and databases from hacked forums and Web sites related to Runescape and other online games.

The administrator of Abusewith[dot]us is a hacker who uses the nickname “Xerx3s.” The avatar attached to Xerx3s’s account suggests the name is taken from Xerxes the Great, a Persian king who lived during the fifth century BC.

Xerx3s the hacker appears to be especially good at breaking into discussion forums and accounts dedicated to Runescape and online gaming. Xerx3s also is a major seller of Runescape gold — often sold to other players at steep discounts and presumably harvested from hacked accounts.

Xerx3s's administrator account profile at Abusewith.us.

Xerx3s’s administrator account profile at Abusewith.us.

I didn’t start looking into who might be responsible for LeakedSource until July 2016, when I sought an interview by reaching out to the email listed on the site (leakedsourceonline@gmail.com). Soon after, I received a Jabber chat invite from the address “leakedsource@chatme.im.”

The entirety of that brief interview is archived here. I wanted to know whether the proprietors of the service believed they were doing anything wrong (we’ll explore more about the legal aspects of LeakedSource’s offerings later in this piece).  Also, I wanted to learn whether the rumors of LeakedSource arising out of Abusewith[us] were true.

“After many of the big breaches of 2015, we noticed a common public trend…’Where can I search it to see if I was affected?’,” wrote the anonymous person hiding behind the leakedsource@chatme.im account. “And thus, the idea was born to fill that need, not rising out of anything. We are however going to terminate the interview as it does seem to be more of a witch hunt instead of journalism. Thank you for your time.”

Nearly two weeks after that chat with the LeakedSource administrator, I got a note from a source who keeps fairly close tabs on the major players in the English-speaking cybercrime underground. My source told me he’d recently chatted with Xerx3s using the Jabber address Xerx3s has long used prior to the creation of LeakedSource — xerx3s@chatme.im.

Xerx3s told my source in great detail about my conversation with the Leakedsource administrator, suggesting that either Xerx3s was the same person I spoke with in my brief interview with LeakedSource, or that the LeakedSource admin had shared a transcript of our chat with Xerx3s.

Although his username on Abusewith[dot]us was Xerx3s, many of Xerx3s’s closest associates on the forum referred to him as “Wade” in their forum postings. This is in reference to a pseudonym Xerx3s frequently used, “Jeremy Wade.”

An associate of Xerx3s tells another abusewith[dot]us user that Xerx3s is the owner of LeakedSource. That comment was later deleted from the discussion thread pictured here.

An associate of Xerx3s tells another abusewith[dot]us user that Xerx3s is the owner of LeakedSource. That comment was later deleted from the discussion thread pictured here.

One email address this Jeremy Wade identity used pseudonymously was imjeremywade@gmail.com. According to a “reverse WHOIS” record search ordered through Domaintools.com, that email address is tied to two domain names registered in 2015: abusing[dot]rs, and cyberpay[dot]info. The original registration records for each site included the name “Secure Gaming LLC.” [Full disclosure: Domaintools is an advertiser on this blog].

The “Jeremy Wade” pseudonym shows up in a number of hacked forum databases that were posted to both Abusewith[dot]us and LeakedSource, including several other sites related to hacking and password abuse.

For example, the user database stolen and leaked from the DDoS-for-hire service “panic-stresser[dot]xyz” shows that a PayPal account tied to the email address eadeh_andrew@yahoo.com paid $5 to cover a subscription for a user named “jeremywade;” The leaked Panicstresser database shows the Jeremywade account was tied to the email address xdavros@gmail.com, and that the account was created in July 2012.

The leaked Panicstresser database also showed that the first login for that Jeremywade account came from the Internet address 68.41.238.208, which is a dynamic Internet address assigned to residential customers of Comcast Communications in Michigan.

According to a large number of forum postings, it appears that whoever used the xdavros@gmail.com address also created several variations on that address, including alexdavros@gmail.com, davrosalex3@yahoo.com, davrosalex4@yahoo.com, as well as themarketsales@gmail.com.

The Gmail account xdavros@gmail.com was used to register at least four domain names almost six years ago in 2011. Two of those domains — daily-streaming.com and tiny-chats.com — were originally registered to a “Nick Davros” at 3757 Dunes Parkway, Muskegon, Mich. The other two were registered to a Nick or Alex Davros at 868 W. Hile Rd., Muskegon, Mich. All four domain registration records included the phone number +12313430295.

I took that 68.41.238.208 Internet address that the leaked Panicstresser database said was tied to the account xdavros@gmail.com and ran an Internet search on it. The address turned up in yet another compromised hacker forum database — this time in the leaked user database for sinister[dot]ly, ironically another site where users frequently post databases plundered from other sites and forums.

The leaked sinister[dot]ly forum database shows that a user by the name of “Jwade” who registered under the email address trpkisaiah@gmailcom first logged into the forum from the same Comcast Internet address tied to the xdavros@gmail.com account at Panicstresser. Continue reading

Fast Food Chain Arby’s Acknowledges Breach

February 9, 2017

Sources at nearly a half-dozen banks and credit unions independently reached out over the past 48 hours to inquire if I’d heard anything about a data breach at Arby’s fast-food restaurants. Asked about the rumors, Arby’s told KrebsOnSecurity that it recently remediated a breach involving malicious software installed on payment card systems at hundreds of its restaurant locations nationwide.

arbys2A spokesperson for Atlanta, Ga.-based Arby’s said the company was first notified by industry partners in mid-January about a breach at some stores, but that it had not gone public about the incident at the request of the FBI.

“Arby’s Restaurant Group, Inc. (ARG) was recently provided with information that prompted it to launch an investigation of its payment card systems,” the company said in a written statement provided to KrebsOnSecurity.

“Upon learning of the incident, ARG immediately notified law enforcement and enlisted the expertise of leading security experts, including Mandiant,” their statement continued. “While the investigation is ongoing, ARG quickly took measures to contain this incident and eradicate the malware from systems at restaurants that were impacted.”

Arby’s said the breach involved malware placed on payment systems inside Arby’s corporate stores, and that Arby’s franchised restaurant locations were not impacted.

Arby’s has more than 3,330 stores in the United States, and roughly one-third of those are corporate-owned. The remaining stores are franchises. However, this distinction is likely to be lost on Arby’s customers until the company releases more information about individual restaurant locations affected by the breach.

“Although there are over 1,000 corporate Arby’s restaurants, not all of the corporate restaurants were affected,” said Christopher Fuller, Arby’s senior vice president of communications. “But this is the most important point: That we have fully contained and eradicated the malware that was on our point-of-sale systems.” Continue reading

‘Top 10 Spammer’ Indicted for Wire Fraud

February 8, 2017

Michael A. Persaud, a California man profiled in a Nov. 2014 KrebsOnSecurity story about a junk email purveyor tagged as one of the World’s Top 10 Worst Spammers, was indicted this week on federal wire fraud charges tied to an alleged spamming operation.

According to an indictment returned in federal court in Chicago, Persaud used multiple Internet addresses and domains – a technique known as “snowshoe spamming” – to transmit spam emails over at least nine networks.

persaud-fb

The Justice Department says Persaud sent well over a million spam emails to recipients in the United States and abroad. Prosecutors charge that Persaud often used false names to register the domains, and he created fraudulent “From:” address fields to conceal that he was the true sender of the emails. The government also accuses Persaud of “illegally transferring and selling millions of email addresses for the purpose of transmitting spam.”

Persaud is currently listed as #8 on the World’s 10 Worst Spammers list maintained by Spamhaus, an anti-spam organization. In 1998, Persaud was sued by AOL, which charged that he committed fraud by using various names to send millions of get-rich-quick spam messages to America Online customers. Persaud did not contest the charges and was ordered to pay more than a half-million dollars in restitution and damages. Continue reading