Brian Krebs About the Author Blog Advertising A Little Sunshine / Web Fraud 2.0 — 3 comments 23 Jun 14 Card Wash: Card Breaches at Car Washes Ooh, you might not ever get rich But let me tell ya, it’s better than diggin’ a ditch “Car Wash” by Rose Royce An investigation into a string of credit card breaches at dozens of car wash locations across the United States illustrates the challenges facing local law enforcement as they seek to connect the dots between cybercrime and local gang activity that increasingly cross multiple domestic and international borders. Car WashEarlier this month, police in Everett, Massachusetts arrested a local man named Jean Pierre for possessing nine stolen credit cards. The cards themselves weren’t stolen: They were gift cards that had been re-encoded with data from cards that were stolen from a variety of data breaches at merchants, including a Splash Car Wash in Connecticut. How authorities in Massachusetts connected Pierre to a cybercrime at a Connecticut car wash is a mix of odd luck and old-fashioned police work. In May, the Everett police department received a complaint from a sheriff’s department in South Carolina about a resident who’d had his credit card account used repeatedly for fraudulent transactions at a Dollar Store in Everett. Everett PD Detective Michael Lavey obtained security camera footage from the local Dollar Store in question. When Lavey asked the store clerk if he knew the individuals pictured at the date and time of the fraudulent transactions, the clerk said the suspects had been coming in for months — several times each week — always purchasing gift cards. “The clerk told me they would come into the store in pairs, using multiple credit cards until one of them was finally approved, at which point they’d buy $500 each in prepaid gift cards,” Lavey said. “We have two Family Dollar stores in Everett and a bunch in the surrounding area, and these guys would come in three to four times a week at each location, laundering money from stolen cards.” Not long after Lavey posted snapshots from the video footage on a state-wide police network, he heard from an officer in Boston who said a suspect resembling one of the men in the photos was recently questioned at a city hospital after being stabbed in the legs and buttocks in an unrelated robbery. The assailant in that attack was arrested, but his victim — Jean Pierre — refused to answer questions about the incident. The police seized Jean Pierre’s pants as evidence in the assault case, and discovered numerous prepaid cards the pockets of the trousers. Lavey said he subpoenaed the credit card records, and working with investigators at American Express and Citibank was able to determine that at least one of the cards had been stolen from the Splash Car Wash in Connecticut. In effect, thieves were buying stolen cards to finance the purchase of gift cards, some of which would later serve as hosts for new stolen card data once their balance was exhausted. The cops call it money laundering, but in this case it might as well be called card washing. WILL THAT BE A SUPER OR DELUXE WASH? Soon enough, Lavey had linked up with Michael Chaves, a detective with the police department in Monroe, Conn. who’d been investigating card breaches at 14 separate car washes in his state, including the Splash case. Working with the Connecticut Financial Crimes Task Force, a broad law enforcement group that includes the U.S. Secret Service and state police, they determined that the local company was but one of at least 40 car washes in across the county that had been hacked and relieved of countless customer credit and debit cards since at least February 2014. A list of car washes allegedly compromised by card thieves this year. A list of car washes identified by various banks as compromised by card thieves this year. Chaves said he interviewed several of the car wash owners, and discovered that they were all using the same point-of-sale systems developed by Randolph, N.J.-based Micrologic Associates. Chaves said the store owners told him the devices had remote access via Symantec’s pcAnywhere enabled, access that was granted to anyone knew the same set of default credentials. “The pcAnywhere credentials were created by Micrologic, but unchanged for years,” Chaves said. That was the same conclusion independently reached by Detective Steven LaMears with the police department in Keene, N.H. Earlier this month, a police captain at the Keene Police Dept. saw fraudulent charges show up on his credit card shortly after using it at the town’s Key Road Car Wash, an establishment which used Micrologic’s point-of-sale system. LaMears also heard from a company in New York which reported that two its executives each had their cards compromised multiple times after visiting the Key Road Car Wash in Keene. “We confronted them, and working with the U.S. Secret Service got them back up and running,” LaMears said of the local compromised car wash. “The Secret Service told us they were running an old version of Micrologic that had the same, one login for everything, and were using an old version of Windows XP.” Continue reading → Data Breaches / Target: Small Businesses — 51 comments 20 Jun 14 Oil Co. Wins $350,000 Cyberheist Settlement A California oil company that sued its bank after being robbed of $350,000 in a 2011 cyberheist has won a settlement that effectively reimbursed the firm for the stolen funds. oilmoneysmallTRC Operating Co. Inc., an oil production firm based in Taft, Calif., had its online accounts hijacked after an account takeover that started late in the day on Friday, November 10, 2011. In the ensuing five days, the thieves would send a dozen fraudulent wires out of the company’s operating accounts, siphoning nearly $3.5 million to accounts in Ukraine. The oil firm’s financial institution, Fresno-based United Security Bank, successfully blocked or recalled all but one of the wires – for $299,000. Nevertheless, TRC later sued its bank to recover the remaining wire amount, arguing that USB failed to offer a commercially reasonable security procedure because the bank offered little more than a user name and password to help secure the account. “For all intents and purposes, they got a user name and password, but were never offered any other security,” said Julie Rogers, an attorney for the Dincel Law Group, the San Jose firm that represented TRC in the dispute (as well as another California cyberheist victim that successfully sued its bank for $400,000 in 2012). “TRC had a cash management liaison assigned to them by the bank who assured them that this was all safe and reliable.” Last week, just days before the case was set to go to trial, the insurance company for the bank settled the lawsuit, agreeing to cut a check for $350,000 to the oil company and with neither side admitting fault in the incident. Under California law, the most that any business can recover from a cyber fraud lawsuit is the amount stolen from its accounts — plus interest. Continue reading → Data Breaches — 74 comments 18 Jun 14 P.F. Chang’s Breach Likely Began in Sept. 2013 The recently-announced credit card breach at P.F. Chang’s Chinese Bistro appears to have gone on for at least nine months: New information indicates that the breach at the nationwide restaurant chain began on or around Sept. 18, 2013, and didn’t end until June 11, one day after KrebsOnSecurity.com broke the news about the break-in. PFCbustWhenever there is a data breach that jeopardizes credit card accounts, Visa, MasterCard and the other card associations typically issue private Compromised Account Management System (CAMS) alerts to banks that issue their cards. The purpose of those CAMS alerts is to notify those institutions of specific cards thought to have been affected in a breach, so that institutions can re-issue the cards or otherwise take additional steps to manage the fraud exposure on those accounts. On June 17, Visa issued a new CAMS alert to one of the banks that I worked with in reporting out the P.F. Chang’s story, letting them know that they had many hundrds of cards exposed in a recent breach that dated back to Sept. 18, 2013. That bank had purchased more than a dozen cards sold from an underground store that’s been exclusively selling cards stolen in the P.F. Chang’s break-in, and every one of those cards was listed on the June 17 CAMS alert from Visa. Continue reading → Security Tools — 85 comments 18 Jun 14 Gear to Block ‘Juice Jacking’ on Your Mobile Ever since I learned about the threat of “juice-jacking” — the possibility that plugging your mobile device into a random power charging station using a USB cord could jeopardize the data on that device — I’ve been more mindful about bringing a proper power-outlet charging adapter on my travels. But in the few cases when I forgot or misplaced the adapter, I’ve found myself falling back on one of two devices I’ll review today that are both designed to block USB charging cords from transmitting data. The USB Condom, in action at 35k feet. The USB Condom, in action at 35k feet. Juice-jacking as a threat probably first crept into the collective paranoia of gadget geeks in the summer of 2011, after I wrote a story about two researchers at the DefCon hacker convention in Vegas who’d set up a mobile charging station designed to educate the unwary to the fact that many mobile devices (particularly Apple devices) are set up to connect to a computer and immediately sync data. Their proof-of-concept was a reminder that in the (admittedly unlikely) event that a clever attacker managed to hide a small computer inside of a USB charging kiosk, he might be able to slurp up your device’s data. Since that story, several products have sprung up to help minimize such threats. These small USB pass-through devices are designed to allow charging yet block any data transfer capability. The two products I’ve been using over the past few months include the “USB Condom” and a device called the “Juice-Jack Defender.” Both prophylactics (cue the crude jokes) function the same way — with male and female USB adapters at either end — but the two have a slightly different form factor and feel. True to its name, the USB Condom is a rectangular black circuit board wrapped in a clear plastic sheath, measuring approximately 54 millimeters/2 inches long and 20 mm/.75 inches wide. The Juice-Jack Defender is slightly smaller — about 45 mm long and roughly 16 mm wide — and is wrapped in rubberized black plastic, although the device picture on the Web site of the vendor, chargedefense.com, shows a product coated in blue plastic. Continue reading → A Little Sunshine — 63 comments 17 Jun 14 If It Sounds Too Good To Be True… The old adage “If it sounds too good to be true, it probably is” no doubt is doubly so when it comes to steeply discounted brand-name stuff for sale on random Web sites, especially sports jerseys, designer shoes and handbags. A great many stores selling these goods appear to be tied to an elaborate network of phony storefronts and credit card processing sites based out of China that will happily charge your card but deliver nothing (or at best flimsy knockoffs). Screenshot 2014-06-08 02.16.03Earlier this month I heard from a reader whose wife had purchased ladies clothing from bearcrs.co.uk, a site that until very recently billed itself as an official seller of Victoria Secrets goods. Most of the items for sale were roughly 60-70 percent off the retail price advertised anywhere else. The checkout process brought her to payment site called unimybill.com, which took her credit card information and said she’d been successfully charged for her purchases. The goods never arrived. “They charged her card about $100,” said the reader, who asked to remain anonymous. “I tried to contact them, they never replied back. I started to discover similar websites by entering phrases from bearcrs.co.uk into Google. All websites have the same php engine, same phrases, registered in China, same checkout process, all they sell brand clothes for 30% of real price.” Bearcrs.co.uk is one of hundreds of bogus storefronts that list products of well-known brands like Nike, Ray Ban, Michael Kors and others, hoping to lure bargain-hunting shoppers. Among the many fraudulent sites is michaelkorshandbags.co.uk, a site that claims to be a merchant in the United Kingdom but whose infrastructure is all Chinese. The same network is tied to michaelkorshandbags.co.uk and hundreds of other similarly structured sites, all of which have left a trail of complaints online from customers who were charged for goods that never arrived. Order anything from this shop and you are taken to a checkout page at sslcreditpay.com, which tries to assure shoppers that the page is legitimate by posting a number of logos and trust seals from a variety of security and payment security providers such as Verisign, Symantec, Trustwave and the PCI Security Standards Council. Trouble is, none of these organizations actually authorized this payment gateway to use their seals, which are supposed to be clickable icons that provide information to help support that claim. sslcreditpay.com uses a variety of security seals to make you feel more at ease submitting your credit card for goods you'll never get. sslcreditpay.com uses a variety of security seals to make you feel more at ease submitting your credit card for goods you’ll never get. A check with Trustwave showed that the seal was bogus. John Randall, senior product manager for the company, said Trustwave only issues the Trustwave seal for customers that purchase its domain validation or extended validation (EV) certificates, and that the site in question hadn’t done either. Likewise, the PCI Security Standards Council said it doesn’t authorize the use of its logo for payment processing sites. “As a standards setting organization we do not validate compliance with PCI Standards – this is managed separately by each payment card brand,” said Ella Nevill, vice president of stakeholder engagement at the PCI Counil. “As such, we don’t provide any sort of compliance ‘seal’ or use of our company logo. What we do provide is use of a PCI Participating Organization logo for our member organizations that pay to be PCI Participating Organizations and be involved in standards development process.” Sslcreditpay.com is one of many apparently bogus online payment processing sites tied to this fraud network. Other phony payment portals include payitrust.com and paymentsol.com. You can’t reach the payment pages for these processors directly unless you actually check out from an associated online store. At that point, you’ll be directed to a subdomain like https://payment.payitrust.com and https://payment.paymentsol.com. Continue reading → Target: Small Businesses — 45 comments 16 Jun 14 Ruling Raises Stakes for Cyberheist Victims A Missouri firm that unsuccessfully sued its bank to recover $440,000 stolen in a 2010 cyberheist may now be on the hook to cover the financial institution’s legal fees, an appeals court has ruled. Legal experts say the decision is likely to discourage future victims from pursuing such cases. Choice Escrow and Land Title LLC sued Tupelo, Miss. based BancorpSouth Inc., after hackers who had stolen the firm’s online banking ID and password used the information to make a single unauthorized wire transfer for $440,000 to a corporate bank account in Cyprus. BancorpSouth’s most secure option for Internet-based authentication at the time was “dual control,” which required the customer to have one user ID and password to approve a wire transfer and another user ID and password to release the same wire transfer. The other option — if the customer chose not to use choose dual control — required one user ID and password to both approve and release a wire transfer. Choice Escrow’s lawyers argued that because BancorpSouth allowed wire or funds transfers using two options which were both password-based, its commercial online banking security procedures fell short of 2005 guidance from the Federal Financial Institutions Examination Council (FFIEC), which warned that single-factor authentication as the only control mechanism is inadequate for high-risk transactions involving the movement of funds to other parties. A trial court was unconvinced, and last week The 8th Circuit Court of Appeals found essentially the same thing, while leaning even more toward the defendants. “It’s a good opinion for banks [and] it’s definitely more pro-bank than pro-consumer,” said Dan Mitchell, a lawyer who chairs the data security practice at Bernstein Shur in Portland, Maine. “The appellate court found the same thing as the basic court. The customer was offered dual controls — that two people should be required to sign off on all transactions — and they were informed that it was important for them to take advantage of this. So, when [Choice Escrow] made an informed decision in writing not to use dual controls, the bank was careful to document that.” Perhaps most significantly, Mitchell said, the decision could be a blow to companies trying to recover cyberheist losses from their banks. Bancorp South had asserted at the trial court level that its contract with Choice Escrow indemnified it against paying legal fees in such a dispute. The trial court dismissed that claim, but the appeals court said in its decision that the bank could recover the costs from the escrow firm. Continue reading → A Little Sunshine / Data Breaches — 95 comments 12 Jun 14 P.F. Chang’s Confirms Credit Card Breach Nationwide restaurant chain P.F. Chang’s Chinese Bistro on Thursday confirmed news first reported on this blog: That customer credit and debit card data had been stolen in a cybercrime attack on its stores. The company had few additional details to share about the breach, other than to say that it would temporarily be switching to a manual credit card imprinting system for all P.F. Chang’s restaurants in the United States. In statement released to this reporter this evening, P.F. Chang’s said it first learned of the breach on June 10, the same day this publication pointed to evidence that the eatery chain may have been compromised. Their complete statement is as follows: Continue reading → A Little Sunshine / Data Breaches — 136 comments 10 Jun 14 Banks: Credit Card Breach at P.F. Chang’s Nationwide chain P.F. Chang’s China Bistro said today that it is investigating claims of a data breach involving credit and debit card data reportedly stolen from restaurant locations nationwide. pfchangsOn June 9, thousands of newly-stolen credit and debit cards went up for sale on rescator[dot]so, an underground store best known for selling tens of millions of cards stolen in the Target breach. Several banks contacted by KrebsOnSecurity said they acquired from this new batch multiple cards that were previously issued to customers, and found that all had been used at P.F. Chang’s locations between the beginning of March 2014 and May 19, 2014. Contacted about the banks’ claims, the Scottsdale, Arizona-based restaurant chain said it has not yet been able to confirm a card breach, but that the company “has been in communications with law enforcement authorities and banks to investigate the source.” “P.F. Chang’s takes these matters very seriously and is currently investigating the situation, working with the authorities to learn more,” the company said in an emailed statement. “We will provide an update as soon as we have additional information.” A spokesperson for the U.S. Secret Service, which typically investigates breaches involving counterfeit credit and debit cards, declined to comment. It is unclear how many P.F. Chang’s locations may have been impacted. According to the company’s Wikipedia entry, as of January 2012 there were approximately 204 P.F. Chang’s restaurants in the United States, Puerto Rico, Mexico, Canada, Argentina, Chile and the Middle East. Banks contacted for this story reported cards apparently stolen from PFC locations in Florida, Maryland, New Jersey, Pennsylvania, Nevada and North Carolina. The new batch of stolen cards, dubbed “Ronald Reagan” by the card shop’s owner, is the first major glut of cards released for sale on the fraud shop since March 2014, when curators of the crime store advertised the sale of some 282,000 cards stolen from nationwide beauty store chain Sally Beauty. The items for sale are not cards, per se, but instead data copied from the magnetic stripe on the backs of credit cards. Armed with this information, thieves can re-encode the data onto new plastic and then use the counterfeit cards to buy high-priced items at big box stores, goods that can be quickly resold for cash (think iPads and gift cards, for example). The most common way that thieves steal this type of card data is by hacking into cash registers at retail locations and planting malicious software that surreptitiously records mag stripe data when cards are swiped through the machines. The breaches at Target, Neiman Marcus, Michaels and Sally Beauty all were powered by malware that thieves planted on point-of-sale systems. Unlike with the Target and Sally Beauty batches, however, the advertisement on Rescator’s shop for cards sold under the Ronald Reagan batch does not list the total number of cards that are for sale currently. Instead, it appears to list just the first 100 pages of results, at approximately 50 cards per page. The cards range in price from $18 to $140 per card. Many factors can influence the price of an individual card, such as whether the card is a Visa or American Express card; similarly, Platinum and Business cards tend to fetch far higher prices than Classic and Standard cards. A new ad that debuted on June 10 for a fresh batch of cards apparently stolen from PF Chang's China Bistro locations. A new ad that debuted on June 9 for a fresh batch of cards apparently stolen from PF Chang’s China Bistro locations. The ad for the Ronald Reagan batch of cards also includes guidance for potential customers who wish to fund their accounts via Western Union or MoneyGram wire transfers, advice that strongly suggests those involved in this apparent heist are once again from Russia and Eastern Europe: Continue reading → Time to Patch — 37 comments 10 Jun 14 Adobe, Microsoft Push Critical Security Fixes Adobe and Microsoft today each released updates to fix critical security vulnerabilities in their software. Adobe issued patches for Flash Player and AIR, while Microsoft’s Patch Tuesday batch includes seven update bundles to address a whopping 66 distinct security holes in Windows and related products. winiconThe vast majority of the vulnerabilities addressed by Microsoft today are in Internet Explorer, the default browser on Windows machines. A single patch for IE this month (MS14-035) shores up at least 59 separate security issues scattered across virtually every supported version of IE. Other patches fix flaws in Microsoft Word, as well as other components of the Windows operating system itself. Most of the vulnerabilities Microsoft fixed today earned its “critical” rating, meaning malware or bad guys could exploit the flaws to seize control over vulnerable systems without any help from users, save perhaps for having the Windows or IE user visit a hacked or booby-trapped Web site. For more details on the individual patches, see this roundup at the Microsoft Technet blog. Adobe’s update for Flash Player fixes at least a half-dozen bugs in the widely-used browser plugin. The Flash update brings the media player to v. 14.0.0.125 on Windows and Mac systems, and v. 11.2.202.378 for Linux users. To see which version of Flash you have installed, check this link. Continue reading → A Little Sunshine / Web Fraud 2.0 — 62 comments 09 Jun 14 Backstage with the Gameover Botnet Hijackers When you’re planning to rob the Russian cyber mob, you’d better make sure that you have the element of surprise, that you can make a clean getaway, and that you understand how your target is going to respond. Today’s column features an interview with two security experts who helped plan and execute last week’s global, collaborative effort to hijack the Gameover Zeus botnet, an extremely resilient and sophisticated crime machine that helped an elite group of thieves steal more than $100 million from banks, businesses and consumers worldwide. Gameover infections on June 4. Source: Shadowserver.org Gameover infections on June 4, 2014. Source: Shadowserver.org Neither expert I spoke with wished to be identified for this story, citing a lack of permission from their employers and a desire to remain off the radar of the crooks inconvenienced by the action. For obvious reasons, they were also reluctant to share details about the exact weaknesses that were used to hijack the botnet, focusing instead on the planning and and preparation that went into this effort. GAMEOVER ZEUS PRIMER A quick review of how Gameover works should help readers get more out of the interview. In traditional botnets, infected PCs report home to and are controlled by a central server. But this architecture leaves such botnets vulnerable to disruption or takeover if authorities or security experts can gain access to the control server. Gameover, on the other hand, is a peer-to-peer (P2P) botnet designed as a collection of small networks that are distinct but linked up in a decentralized fashion. The individual Gameover-infected PCs are known as “peers.” Above the peers are a select number of slightly more powerful and important infected systems that are assigned roles as “proxy nodes,” meaning they were selected from the peers to serve as relay points for commands coming from the Gameover botnet operators and as conduits for encrypted data stolen from the infected systems. The basic network structure of the Gameover botnet. Source: FBI The basic network structure of the Gameover botnet. Source: FBI The Gameover botnet code also includes a failsafe mechanism that can be invoked if the botnet’s P2P communications system fails, whether the failure is the result of a faulty malware update or because of a takedown effort by researchers/law enforcement. That failsafe is a domain generation algorithm (DGA) component that generates a list of 1,000 domain names each week (gibberish domains that are essentially long jumbles of letters) combined with one of six top-level domains; .com, .net, .org, .biz, .info and .ru. In the event the infected Gameover systems can’t get new instructions from their peers, the code instructs the botted systems to seek out domains from the latest list of 1,000 domains generated by the DGA until it finds a site with new instructions. HUNDREDS OF ‘WEB INJECTS’ The Gameover malware was designed specifically to defeat two-factor authentication used by many banks. It did so using a huge collection of custom-made scripts known as “Web injects” that can inject custom content into a Web browser when the victim browses to certain sites — such as a specific bank’s login page. Web injects also are used to prompt the victim to enter additional personal information when they log in to a trusted site. An example of this type of Web inject can be seen in the video below, which shows an inject designed for Citibank customers. Continue reading → ← Older Entries