What Is Your Bank’s Security Banking On?

A large number of banks, credit unions and other financial institutions just pushed customers onto new e-banking platforms that asked them to reset their account passwords by entering a username plus some other static identifier — such as the first six digits of their Social Security number (SSN), or a mix of partial SSN, date of birth and surname. Here’s a closer look at what may be going on (spoiler: small, regional banks and credit unions have grown far too reliant on the whims of just a few major online banking platform providers).

You might think it odd that any self-respecting financial institution would seek to authenticate customers via static data like partial SSN for passwords, and you’d be completely justified for thinking that, too. Nobody has any business using these static identifiers for authentication because they for sale on most Americans quite easily and cheaply in the cybercrime underground. The Equifax breach might have “refreshed” some of those data stores for identity thieves, but most U.S. adults have had their static details (DOB/SSN/MMN, address, previous address, etc) on sale for years now.

On Feb. 16, KrebsOnSecurity reader Brent Hoeft shared a copy of an email he’d just received from his financial institution Associated Bank, which at $30+ billion in assets happens to be Wisconsin’s largest by asset size.

The notice advised:

“Please read and save this information (including the password below) to prepare for your online and mobile banking upgrade.

Our refreshed online and mobile banking experience is officially launching on Monday, February 26, 2018.

We’re excited to share it with you, and want you to be aware of some important details about the transition.


Use this temporary password the first time you sign in after the upgrade. Your temporary password is the first four letters of your last name plus the last four digits of your Social Security Number.

XXXX#### [redacted by me but included in the email]

Note: your password is all lowercase without spaces.

Once the upgrade is complete, you will need your temporary password to begin the re-enrollment process.
• Beginning Monday, February 26, you will need to sign in using your existing user ID and the temporary password included above in this email. Please note that you are only required to reenroll in online or mobile banking but can access both using the same user ID and password.
• Once you sign in, you will be prompted to create a new password and establish other security features. Your user ID will remain the same.”

Hoeft said Associated Bank seems to treat the customer username as a secret, something to be protected along with the password.

“I contacted Associated’s customer service via email and received a far less satisfying explanation that the user name is required for re-activation and, that since [the username] was not provided in the email, the process they are using is in fact secure,” Hoeft said.

After speaking with Hoeft, I tweeted about whether to name and shame the bank before it was too late, or perhaps to try and talk some sense into them privately. Most readers advised that calling attention to the problem before the transition could cause more harm than good, and that at least until after Feb. 26 contacting some of the banks privately was the best idea (which is what I did).

Associated Bank wouldn’t say who their new consumer online banking platform provider was, but they did say it was one of the big ones. I took that to mean either FIS, Fiserv or Jack Henry, which collectively control approximately 70 percent of the market for bank core processors (according to FedFIS.com, Fiserv is by far the largest).

Image: Fedfis.com

The bank’s chief information security officer Joe Smits said Associated’s new consumer online banking platform provider required that new and existing customers log in with a username and a temporary password — which was described as choice among secondary, static data elements about customers — such as the first six digits of the customer’s SSN or date of birth.

Smits added that the bank originally started emailing customers the instructions for figuring out their temporary passwords, but then decided US mail would be a safer option and sent the rest out that way. He said only about 15 percent of Associated Bank customers (~50,000) received instructions about their temporary passwords through email.

I followed up with Hoeft to find out how his online banking upgrade went at Associated Bank. He told me that upon visiting the site, it asked for his username and the temporary password (the first four letters of his last name and the last four digits of his SSN).

“After entering that I was told to re-enter my temporary password and then create a new password,” Hoeft said. “I then was asked to select 5 security questions and provide answers. Next I was asked for a verification phone number. Upon entering that I received a text message with a 4 digit verification code. After entering the code it asked me to finish my profile information including name, email and daytime phone. After that it took me right into my online banking account.”

Hoeft said it seems like the “verification” step that was supposed to create an extra security check didn’t really add any security at all.

“If someone were able to get in with the temporary password, they would be able to create a new password, fill out all the security code information, and then provide their phone number to receive the verification code,” Hoeft said. “Armed with the verification code they then would be able to get right into my online banking account.”


A simple search online revealed Associated Bank wasn’t alone: Multiple institutions were moving to a new online banking platform all on the same day: Feb. 26, 2018.

My Credit Union also moved to a new online banking service in February, posting a notice stating that all customers will need to log in with their current username and the last four of their SSN as a temporary password.

Customers Bank, a $10 billion bank with nearly two dozen branches between Boston and Philadelphia, also told customers that starting Feb. 26 they would need to use a temporary password — the last six digits of their Social Security number — to re-enroll in online banking. Here’s part of their advice, which was published in a PDF on the bank’s site:

• You may notice a new co-branded logo for Customers Bank and BankMobile (Division Customers Bank).
• Your existing user name for Online Banking will remain the same within the new system; however, it must be entered as all lowercase letters.
• The first time you log into the new Online Banking system, your temporary password is the last 6-digits of your social security number. Your temporary
password will expire on Friday, April 20, 2018. Please be sure to log in prior to that date.
• Online Banking includes multi-factor authentication which will need to be reestablished as part of the initial sign in to the system.
• Your username and password credentials for Online Banking will be the same for Mobile Banking. Note: Before accessing the new Mobile Banking services,
you must first login to our enhanced Online Banking system to change your password.
• You will also need to enroll your mobile device, either through Online Banking by visiting the Mobile Banking Center option, or directly on the device through the
app. Both options will require additional authentication.

Columbia Bank, which has 140 branches in Washington, Oregon and Idaho, also switched gears on Feb. 26, but used a more sensible approach: Sending customers a new user ID, organization ID and temporary password in two separate mailings.


My tweet about whether to name Associated Bank attracted the attention of at least two banking industry security regulators, each of whom spoke with KrebsOnSecurity on condition of not being identified by name or regulatory agency.

Both said their agencies would be using the above examples in briefings with member institutions as instructional on how not to do online banking securely. Both also said small to mid-sized banks are massively beholden to their platform providers, and many banks simply accept the defaults instead of pushing for stronger alternatives.

“I have a lot of communications directly with the chief information security officers, chief security officers, and chief information officers in many institutions,” one regulator said. “Many of them have massively dumbed down their password requirements. A lot of smaller institutions often don’t understand the risk involved in online banking, which is why they try to outsource the whole thing to someone else. But they can’t outsource accountability.”

One of the regulators I spoke with suggested that all of the banks they’d seen transitioning to a new online banking platform on Feb. 26 were customers of Fiserv — the nation’s largest online banking platform provider.

Fiserv did not respond to specific questions for this story, saying only in a written statement that: “Fiserv regularly partners with financial institutions to provide capabilities that help mitigate and manage risk, enhance the customer experience, and allow banks to remain competitive. A variety of methodologies are used by institutions to enroll and authenticate new users onto online banking platforms, and password authentication is one of multiple layers of security used to protect customers.”

Both banking industry regulators I spoke with said a basic problem is that many smaller institutions unfortunately still treat usernames as secret codes. I have railed against this practice for years, but far too many banks treat customer usernames as part of their security, even though most customers pick something very close to the first part of their email address (before the “@” sign). I’ve even skewered some of the airline industry giants for doing the same (United does this with its super-secret frequent flyer account number).

“I think this will be an opportunity for us to coach them on that,” one banking regulator said. “This process has to involve random password generation and that needs to be standard operating procedure. If you can shortcut security just by supplying static data like SSN, it’s all screwed. Some of these organizations have had such poor control structure for so long they don’t even understand how bad it is.”

The other regulator said another challenge is how long banks should wait before disabling accounts if consumers don’t log in to the new online banking system.

“What they’re going to do is set up all these users on this brand new system and give them default passwords,” the regulator said. “Some individuals will log into their bank account every day, others once a month and sometimes quite randomly. So, how are they going to control that window of opportunity? At some point, maybe after a couple of weeks, they need to just disable those other accounts and have people start from scratch.”

The first regulator said it appears many banks (and their platform providers) are singularly focused on making these transitions as seamless and painless as possible for the financial institution and its customers.

“I think they’re looking at making it easier for their customers and lessening the fallout as they get fewer angry and frustrated calls,” the regulator said. “That’s their incentive more than anything else.”


While it may appear that banks are more afraid of calls from their customers than of fallout from identity thieves and hackers, remember that you the consumer can shop with your wallet, and should move your funds to another bank if you’re unhappy with the security practices of your current institution.

Also, don’t re-use passwords. In fact, wherever possible don’t use passwords at all. Instead, choose passphrases over passwords (remember, length is key). Unfortunately, passphrases may not be possible because some banks have chosen to truncate passwords after a certain number of characters, and to disallow special symbols.

If you’re the kind of person who likes to use the same password across multiple sites, then a password manager is definitely for you. That’s because password managers pick strong, long and secure passwords for you and the only thing you have to remember is a single master password.

Please consider any two-step or two-factor authentication options your financial institution may offer, and be sure to take full advantage of that when it’s available. Also, ask your bank to require a unique verbal password before discussing any of your account details over the phone; this prevents someone from calling in to your bank and convincing a customer service rep that he’s you just because he can regurgitate your static personal details.

Finally, take steps to prevent your security from being backdoored by your mobile provider: Check out last week’s tips on blocking mobile number port-out scams, which thieves sometimes use in cashing out hacked bank accounts.

From https://krebsonsecurity.com/2018/03/what-is-your-banks-security-banking-on/


Powerful New DDoS Method Adds Extortion

Attackers have seized on a relatively new method for executing distributed denial-of-service (DDoS) attacks of unprecedented disruptive power, using it to launch record-breaking DDoS assaults over the past week. Now evidence suggests this novel attack method is fueling digital shakedowns in which victims are asked to pay a ransom to call off crippling cyberattacks.

On March 1, DDoS mitigation firm Akamai revealed that one of its clients was hit with a DDoS attack that clocked in at 1.3 Gbps, which would make it the largest publicly recorded DDoS attack ever.

The type of DDoS method used in this record-breaking attack abuses a legitimate and relatively common service called “memcached” (pronounced “mem-cash-dee”) to massively amp up the power of their DDoS attacks.

Installed by default on many Linux operating system versions, memcached is designed to cache data and ease the strain on heavier data stores, like disk or databases. It is typically found in cloud server environments and it is meant to be used on systems that are not directly exposed to the Internet.

Memcached communicates using the User Datagram Protocol or UDP, which allows communications without any authentication — pretty much anyone or anything can talk to it and request data from it.

Because memcached doesn’t support authentication, an attacker can “spoof” or fake the Internet address of the machine making that request so that the memcached servers responding to the request all respond to the spoofed address — the intended target of the DDoS attack.

Worse yet, memcached has a unique ability to take a small amount of attack traffic and amplify it into a much bigger threat. Most popular DDoS tactics that abuse UDP connections can amplify the attack traffic 10 or 20 times — allowing, for example a 1 mb file request to generate a response that includes between 10mb and 20mb of traffic.

But with memcached, an attacker can force the response to be thousands of times the size of the request. All of the responses get sent to the target specified in the spoofed request, and it requires only a small number of open memcached servers to create huge attacks using very few resources.

Akamai believes there are currently more than 50,000 known memcached systems exposed to the Internet that can be leveraged at a moment’s notice to aid in massive DDoS attacks.

Both Akamai and Qrator — a Russian DDoS mitigation company — published blog posts on Feb. 28 warning of the increased threat from memcached attacks.

“This attack was the largest attack seen to date by Akamai, more than twice the size of the September, 2016 attacks that announced the Mirai botnet and possibly the largest DDoS attack publicly disclosed,” Akamai said [link added]. “Because of memcached reflection capabilities, it is highly likely that this record attack will not be the biggest for long.”

According to Qrator, this specific possibility of enabling high-value DDoS attacks was disclosed in 2017 by a Chinese group of researchers from the cybersecurity 0Kee Team. The larger concept was first introduced in a 2014 Black Hat U.S. security conference talk titled “Memcached injections.”


On Thursday, KrebsOnSecurity heard from several experts from Cybereason, a Boston-based security company that’s been closely tracking these memcached attacks. Cybereason said its analysis reveals the attackers are embedding a short ransom note and payment address into the junk traffic they’re sending to memcached services.

Cybereason said it has seen memcached attack payloads that consist of little more than a simple ransom note requesting payment of 50 XMR (Monero virtual currency) to be sent to a specific Monero account. In these attacks, Cybereason found, the payment request gets repeated until the file reaches approximately one megabyte in size.

The ransom demand (50 Monero) found in the memcached attacks by Cybereason on Thursday.

Memcached can accept files and host files in temporary memory for download by others. So the attackers will place the 1 mb file full of ransom requests onto a server with memcached, and request that file thousands of times — all the while telling the service that the replies should all go to the same Internet address — the address of the attack’s target.

“The payload is the ransom demand itself, over and over again for about a megabyte of data,” said Matt Ploessel, principal security intelligence researcher at Cybereason. “We then request the memcached ransom payload over and over, and from multiple memcached servers to produce an extremely high volume DDoS with a simple script and any normal home office Internet connection. We’re observing people putting up those ransom payloads and DDoSsing people with them.”

Because it only takes a handful of memcached servers to launch a large DDoS, security researchers working to lessen these DDoS attacks have been focusing their efforts on getting Internet service providers (ISPs) and Web hosting providers to block traffic destined for the UDP port used by memcached (port 11211).

Ofer Gayer, senior product manager at security firm Imperva, said many hosting providers have decided to filter port 11211 traffic to help blunt these memcached attacks.

“The big packets here are very easy to mitigate because this is junk traffic and anything coming from that port (11211) can be easily mitigated,” Gayer said.

Several different organizations are mapping the geographical distribution of memcached servers that can be abused in these attacks. Here’s the world at-a-glance, from our friends at Shadowserver.org:

The geographic distribution of memcached servers exposed to the Internet. Image: Shadowserver.org

Here are the Top 20 networks that are hosting the most number of publicly accessible memcached servers at this moment, according to data collected by Cybereason:

The global ISPs with the most number of publicly available memcached servers.

DDoS monitoring site ddosmon.net publishes a live, running list of the latest targets getting pelted with traffic in these memcached attacks.

What do the stats at ddosmon.net tell us? According to netlab@360, memcached attacks were not super popular as an attack method until very recently.

“But things have greatly changed since February 24th, 2018,” netlab wrote in a Mar. 1 blog post, noting that in just a few days memcached-based DDoS went from less than 50 events per day, up to 300-400 per day. “Today’s number has already reached 1484, with an hour to go.”

Hopefully, the global ISP and hosting community can come together to block these memcached DDoS attacks. I am encouraged by what I have heard and seen so far, and hope that can continue in earnest before these attacks start becoming more widespread and destructive.

Here’s the Cybereason video from which that image above with the XMR ransom demand was taken:

From https://krebsonsecurity.com/2018/03/powerful-new-ddos-method-adds-extortion/

Financial Cyber Threat Sharing Group Phished

The Financial Services Information Sharing and Analysis Center (FS-ISAC), an industry forum for sharing data about critical cybersecurity threats facing the banking and finance industries, said today that a successful phishing attack on one of its employees was used to launch additional phishing attacks against FS-ISAC members.

The fallout from the back-to-back phishing attacks appears to have been limited and contained, as many FS-ISAC members who received the phishing attack quickly detected and reported it as suspicious. But the incident is a good reminder to be on your guard, remember that anyone can get phished, and that most phishing attacks succeed by abusing the sense of trust already established between the sender and recipient.

The confidential alert FS-ISAC sent to members about a successful phishing attack that spawned phishing emails coming from the FS-ISAC.

Notice of the phishing incident came in an alert FS-ISAC shared with its members today and obtained by KrebsOnSecurity. It describes an incident on Feb. 28 in which an FS-ISAC employee “clicked on a phishing email, compromising that employee’s login credentials. Using the credentials, a threat actor created an email with a PDF that had a link to a credential harvesting site and was then sent from the employee’s email account to select members, affiliates and employees.”

The alert said while FS-ISAC was already planning and implementing a multi-factor authentication (MFA) solution across all of its email platforms, “unfortunately, this incident happened to an employee that was not yet set up for MFA. We are accelerating our MFA solution across all FS-ISAC assets.”

The FS-ISAC also said it upgraded its Office 365 email version to provide “additional visibility and security.”

In an interview with KrebsOnSecurity, FS-ISAC President and CEO Bill Nelson said his organization has grown significantly in new staff over the past few years to more than 75 people now, including Greg Temm, the FS-ISAC’s chief information risk officer.

“To say I’m disappointed this got through is an understatement,” Nelson said. “We need to accelerate MFA extremely quickly for all of our assets.”

Nelson observed that “The positive messaging out of this I guess is anyone can become victimized by this.” But according to both Nelson and Temm, the phishing attack that tricked the FS-ISAC employee into giving away email credentials does not appear to have been targeted — nor was it particularly sophisticated.

“I would classify this as a typical, routine, non-targeted account harvesting and phishing,” Temm said. “It did not affect our member portal, or where our data is. That’s 100 percent multifactor. In this case it happened to be an asset that did not have multifactor.”

In this incident, it didn’t take a sophisticated actor to gain privileged access to an FS-ISAC employee’s inbox. But attacks like these raise the question: How successful might such a phishing attack be if it were only slightly more professional and/or organized?

Nelson said his staff members all participate in regular security awareness training and testing, but that there is always room to fill security gaps and move the needle on how many people click when they shouldn’t with email.

“The data our members share with us is fully protected,” he said. “We have a plan working with our board of directors to make sure we have added security going forward,” Nelson said. “But clearly, recognizing where some of these softer targets are is something every company needs to take a look at.”

From https://krebsonsecurity.com/2018/03/financial-cyber-threat-sharing-group-phished/

How to Fight Mobile Number Port-out Scams

T-Mobile, AT&T and other mobile carriers are reminding customers to take advantage of free services that can block identity thieves from easily “porting” your mobile number out to another provider, which allows crooks to intercept your calls and messages while your phone goes dark. Tips for minimizing the risk of number porting fraud are available below for customers of all four major mobile providers, including Sprint and Verizon.

Unauthorized mobile phone number porting is not a new problem, but T-Mobile said it began alerting customers about it earlier this month because the company has seen a recent uptick in fraudulent requests to have customer phone numbers ported over to another mobile provider’s network.

“We have been alerting customers via SMS that our industry is experiencing a phone number port out scam that could impact them,” T-Mobile said in a written statement. “We have been encouraging them to add a port validation feature, if they’ve not already done so.”

Crooks typically use phony number porting requests when they have already stolen the password for a customer account (either for the mobile provider’s network or for another site), and wish to intercept the one-time password that many companies send to the mobile device to perform two-factor authentication.

Porting a number to a new provider shuts off the phone of the original user, and forwards all calls to the new device. Once in control of the mobile number, thieves can request any second factor that is sent to the newly activated device, such as a one-time code sent via text message or or an automated call that reads the one-time code aloud.

In these cases, the fraudsters can call a customer service specialist at a mobile provider and pose as the target, providing the mark’s static identifiers like name, date of birth, social security number and other information. Often this is enough to have a target’s calls temporarily forwarded to another number, or ported to a different provider’s network.

Port out fraud has been an industry problem for a long time, but recently we’ve seen an uptick in this illegal activity,” T-Mobile said.  “We’re not providing specific metrics, but it’s been enough that we felt it was important to encourage customers to add extra security features to their accounts.”

In a blog post published Tuesday, AT&T said bad guys sometimes use illegal porting to steal your phone number, transfer the number to a device they control and intercept text authentication messages from your bank, credit card issuer or other companies.

“You may not know this has happened until you notice your mobile device has lost service,” reads a post by Brian Rexroad, VP of security relations at AT&T. “Then, you may notice loss of access to important accounts as the attacker changes passwords, steals your money, and gains access to other pieces of your personal information.”

Rexroad says in some cases the thieves just walk into an AT&T store and present a fake ID and your personal information, requesting to switch carriers. Porting allows customers to take their phone number with them when they change phone carriers.

The law requires carriers to provide this number porting feature, but there are ways to reduce the risk of this happening to you.

T-Mobile suggests adding its port validation feature to all accounts. To do this, call 611 from your T-Mobile phone or dial 1-800-937-8997 from any phone. The T-Mobile customer care representative will ask you to create a 6-to-15-digit passcode that will be added to your account.

“We’ve included alerts in the T-Mobile customer app and on MyT-Mobile.com, but we don’t want customers to wait to get an alert to take action,” the company said in its statement. “Any customer can call 611 at any time from their mobile phone and have port validation added to their accounts.”

Verizon requires a match on a password or a PIN associated with the account for a port to go through. Subscribers can set their PIN via their Verizon Wireless website account or by visiting a local shop.

Sprint told me that in order for a customer to port their number to a different carrier, they must provide the correct Sprint account number and PIN number for the port to be approved. Sprint requires all customers to create a PIN during their initial account setup.

AT&T calls its two-factor authentication “extra security,” which involves creating a unique passcode on your AT&T account that requires you to provide that code before any changes can be made — including ports initiated through another carrier. Follow this link for more information. And don’t use something easily guessable like your SSN (the last four of your SSN is the default PIN, so make sure you change it quickly to something you can remember but that’s non-obvious).

Bigger picture, these porting attacks are a good reminder to use something other than a text message or a one-time code that gets read to you in an automated phone call. Whenever you have the option, choose the app-based alternative: Many companies now support third-party authentication apps like Google Authenticator and Authy, which can act as powerful two-factor authentication alternatives that are not nearly as easy for thieves to intercept.

Several of the mobile companies referred me to the work of a Mobile Authentication task force created by the carriers last fall. They say the issue of unauthorized ports to commit fraud is being addressed by this initiative.

For more on tightening your mobile security stance, see last year’s story, “Is Your Mobile Carrier Your Weakest Link?

From https://krebsonsecurity.com/2018/02/how-to-fight-mobile-number-port-out-scams/

Bot Roundup: Avalanche, Kronos, NanoCore

It’s been a busy few weeks in cybercrime news, justifying updates to a couple of cases we’ve been following closely at KrebsOnSecurity. In Ukraine, the alleged ringleader of the Avalanche malware spam botnet was arrested after eluding authorities in the wake of a global cybercrime crackdown there in 2016. Separately, a case that was hailed as a test of whether programmers can be held accountable for how customers use their product turned out poorly for 27-year-old programmer Taylor Huddleston, who was sentenced to almost three years in prison for making and marketing a complex spyware program.

First, the Ukrainian case. On Nov. 30, 2016, authorities across Europe coordinated the arrest of five individuals thought to be tied to the Avalanche crime gang, in an operation that the FBI and its partners abroad described as an unprecedented global law enforcement response to cybercrime. Hundreds of malicious web servers and hundreds of thousands of domains were blocked in the coordinated action.

The global distribution of servers used in the Avalanche crime machine. Source: Shadowserver.org

The alleged leader of the Avalanche gang — 33-year-old Russian Gennady Kapkanov — did not go quietly at the time. Kapkanov allegedly shot at officers with a Kalashnikov assault rifle through the front door as they prepared to raid his home, and then attempted to escape off of his 4th floor apartment balcony. He was later released, after police allegedly failed to file proper arrest records for him.

But on Monday Agence France-Presse (AFP) reported that Ukrainian authorities had once again collared Kapkanov, who was allegedly living under a phony passport in Poltav, a city in central Ukraine. No word yet on whether Kapkanov has been charged, which was supposed to happen Monday.

Kapkanov’s drivers license. Source: npu.gov.ua.


Lawyers for Taylor Huddleston, a 27-year-old programmer from Hot Springs, Ark., originally asked a federal court to believe that the software he sold on the sprawling hacker marketplace Hackforums — a “remote administration tool” or “RAT” designed to let someone remotely administer one or many computers remotely — was just a benign tool.

The bad things done with Mr. Huddleston’s tools, the defendant argued, were not Mr. Huddleston’s doing. Furthermore, no one had accused Mr. Huddleston of even using his own software.

The Daily Beast first wrote about Huddleston’s case in 2017, and at the time suggested his prosecution raised questions of whether a programmer could be held criminally responsible for the actions of his users. My response to that piece was “Dual-Use Software Criminal Case Not So Novel.

Photo illustration by Lyne Lucien/The Daily Beast

The court was swayed by evidence that yes, Mr. Huddleston could be held criminally responsible for those actions. It sentenced him to 33 months in prison after the defendant acknowledged that he knew his RAT — a Remote Access Trojan dubbed “NanoCore RAT” — was being used to spy on webcams and steal passwords from systems running the software.

Of course Huddleston knew: He didn’t market his wares on some Craigslist software marketplace ad, or via video promos on his local cable channel: He marketed the NanoCore RAT and another software licensing program called Net Seal exclusively on Hackforums[dot]net.

This sprawling, English language forum has a deep bench of technical forum discussions about using RATs and other tools to surreptitiously record passwords and videos of “slaves,” the derisive term for systems secretly infected with these RATs.

Huddleston knew what many of his customers were doing because many NanoCore users also used Huddleston’s Net Seal program to keep their own RATs and other custom hacking tools from being disassembled or “cracked” and posted online for free. In short: He knew what programs his customers were using Net Seal on, and he knew what those customers had done or intended to do with tools like NanoCore.

The sentencing suggests that where you choose to sell something online says a lot about what you think of your own product and who’s likely buying it.

Daily Beast author Kevin Poulsen noted in a July 2017 story that Huddleston changed his tune and pleaded guilty. The story pointed to an accompanying plea in which Huddleston stipulated that he “knowingly and intentionally aided and abetted thousands of unlawful computer intrusions” in selling the program to hackers and that he “acted with the purpose of furthering these unauthorized computer intrusions and causing them to occur.”


Bleeping Computer’s Catalin Cimpanu observes that Huddleston’s case is similar to another being pursued by U.S. prosecutors against Marcus “MalwareTech” Hutchins, the security researcher who helped stop the spread of the global WannaCry ransomware outbreak in May 2017. Prosecutors allege Hutchins was the author and proprietor of “Kronos,” a strain of malware designed to steal online banking credentials.

Marcus Hutchins, just after he was revealed as the security expert who stopped the WannaCry worm. Image: twitter.com/malwaretechblog

On Sept. 5, 2017, KrebsOnSecurity published “Who is Marcus Hutchins?“, a breadcrumbs research piece on the public user profiles known to have been wielded by Hutchins. The data did not implicate him in the Kronos trojan, but it chronicles the evolution of a young man who appears to have sold and published online quite a few unique and powerful malware samples — including several RATs and custom exploit packs (as well as access to hacked PCs).

MalwareTech declined to be interviewed by this publication in light of his ongoing prosecution. But Hutchins has claimed he never had any customers because he didn’t write the Kronos trojan.

Hutchins has pleaded not guilty to all four counts against him, including conspiracy to distribute malicious software with the intent to cause damage to 10 or more affected computers without authorization, and conspiracy to distribute malware designed to intercept protected electronic communications.

Hutchins said through his @MalwareTechBlog account on Twitter Feb. 26 that he wanted to publicly dispute my Sept. 2017 story. But he didn’t specify why other than saying he was “not allowed to.”

MWT wrote: “mrw [my reaction when] I’m not allowed to debunk the Krebs article so still have to listen to morons telling me why I’m guilty based on information that isn’t even remotely correct.”

Hutchins’ tweet on Feb. 26, 2018.

According to a story at BankInfoSecurity, the evidence submitted by prosecutors for the government includes:

  • Statements made by Hutchins after he was arrested.
  • A CD containing two audio recordings from a county jail in Nevada where he was detained by the FBI.
  • 150 pages of Jabber chats between the defendant and an individual.
  • Business records from Apple, Google and Yahoo.
  • Statements (350 pages) by the defendant from another internet forum, which were seized by the government in another district.
  • Three to four samples of malware.
  • A search warrant executed on a third party, which may contain some privileged information.

The case against Hutchins continues apace in Wisconsin. A scheduling order for pretrial motions filed Feb. 22 suggests the court wishes to have a speedy trial that concludes before the end of April 2018.

From https://krebsonsecurity.com/2018/02/bot-roundup-avalanche-kronos-nanocore/

USPS Finally Starts Notifying You by Mail If Someone is Scanning Your Snail Mail Online

In October 2017, KrebsOnSecurity warned that ne’er-do-wells could take advantage of a relatively new service offered by the U.S. Postal Service that provides scanned images of all incoming mail before it is slated to arrive at its destination address. We advised that stalkers or scammers could abuse this service by signing up as anyone in the household, because the USPS wasn’t at that point set up to use its own unique communication system — the U.S. mail — to alert residents when someone had signed up to receive these scanned images.

Image: USPS

The USPS recently told this publication that beginning Feb. 16 it started alerting all households by mail whenever anyone signs up to receive these scanned notifications of mail delivered to that address. The notification program, dubbed “Informed Delivery,” includes a scan of the front and back of each envelope or package destined for a specific address each day.

The Postal Service says consumer feedback on its Informed Delivery service has been overwhelmingly positive, particularly among residents who travel regularly and wish to keep close tabs on any bills or other mail being delivered while they’re on the road. It has been available to select addresses in several states since 2014 under a targeted USPS pilot program, but it has since expanded to include many ZIP codes nationwide. U.S. residents can find out if their address is eligible by visiting informeddelivery.usps.com.

According to the USPS, some 8.1 million accounts have been created via the service so far (Oct. 7, 2017, the last time I wrote about Informed Delivery, there were 6.3 million subscribers, so the program has grown more than 28 percent in five months).

Roy Betts, a spokesperson for the USPS’s communications team, says post offices handled 50,000 Informed Delivery notifications the week of Feb. 16, and are delivering an additional 100,000 letters to existing Informed Delivery addresses this coming week.

Currently, the USPS allows address changes via the USPS Web site or in-person at any one of more than 35,000 USPS retail locations nationwide. When a request is processed, the USPS sends a confirmation letter to both the old address and the new address.

If someone already signed up for Informed Delivery later posts a change of address request, the USPS does not automatically transfer the Informed Delivery service to the new address: Rather, it sends a mailer with a special code tied to the new address and to the username that requested the change. To resume Informed Delivery at the new address, that code needs to be entered online using the account that requested the address change.

A review of the methods used by the USPS to validate new account signups last fall suggested the service was wide open to abuse by a range of parties, mainly because of weak authentication and because it is not easy to opt out of the service.

Signing up requires an eligible resident to create a free user account at USPS.com, which asks for the resident’s name, address and an email address. The final step in validating residents involves answering four so-called “knowledge-based authentication” or KBA questions.

The USPS told me it uses two ID proofing vendors: Lexis Nexisand, naturally, recently breached big three credit bureau Equifax — to ask the magic KBA questions, rotating between them randomly.

KrebsOnSecurity has assailed KBA as an unreliable authentication method because so many answers to the multiple-guess questions are available on sites like Spokeo and Zillow, or via social networking profiles.

It’s also nice when Equifax gives away a metric truckload of information about where you’ve worked, how much you made at each job, and what addresses you frequented when. See: How to Opt Out of Equifax Revealing Your Salary History for how much leaks from this lucrative division of Equifax.

All of the data points in an employee history profile from Equifax will come in handy for answering the KBA questions, or at least whittling away those that don’t match salary ranges or dates and locations of the target identity’s previous addresses.

Once signed up, a resident can view scanned images of the front of each piece of incoming mail in advance of its arrival. Unfortunately, anyone able to defeat those automated KBA questions from Equifax and Lexis Nexis — be they stalkers, jilted ex-partners or private investigators — can see who you’re communicating with via the Postal mail.

Maybe this is much ado about nothing: Maybe it’s just a reminder that people in the United States shouldn’t expect more than a post card’s privacy guarantee (which in can leak the “who” and “when” of any correspondence, and sometimes the “what” and “why” of the communication). We’d certainly all be better off if more people kept that guarantee in mind for email in addition to snail mail. At least now the USPS will deliver your address a piece of paper letting you know when someone signs up to look at those W’s in your snail mail online.

From https://krebsonsecurity.com/2018/02/usps-finally-starts-notifying-you-by-mail-if-someone-is-scanning-your-snail-mail-online/

Chase ‘Glitch’ Exposed Customer Accounts

Multiple Chase.com customers have reported logging in to their bank accounts, only to be presented with another customer’s bank account details. Chase has acknowledged the incident, saying it was caused by an internal “glitch” Wednesday evening that did not involve any kind of hacking attempt or cyber attack.

Trish Weller, director of communications for the retail side of JP Morgan Chase, said the incident happened Wednesday evening, for “a pretty limited number of customers” between 6:30 pm  and 9 pm ET who “sporadically during that time while logged in to chase.com could see someone else’s account details.”

“We know for sure the glitch was on our end, not from a malicious actor,” Weller said, noting that Chase is still trying to determine how many customers may have been affected. “We’re going through Tweets from customers and making sure that if anyone is calling us with issues we’re working one on one with customers. If you see suspicious activity you should give us a call.”

Weller urged customers to “practice good security hygiene” by regularly reviewing their account statements, and promptly reporting any discrepancies. She said Chase is still working to determine the precise cause of the mix-up, and that there have been no reports of JPMC commercial customers seeing the account information of other customers.

“This was all on our side,” Well said. “I don’t know what did happen yet but I know what didn’t happen. What happened last night was 100 percent not the result of anything malicious.”

The account mix-up was documented on Wednesday by Fly & Dine, an online publication that chronicles the airline food industry. Fly & Dine included screenshots of one of their writer’s spouses logged into the account of a fellow Chase customer with an Amazon and Chase card and a balance of more than $16,000.

Kenneth White, a security researcher and director of the Open Crypto Audit Project, said the reports he’s seen on Twitter and elsewhere suggested the screwup was somehow related to the bank’s mobile apps. He also said the Chase retail banking app offered an update first thing Thursday morning.

Chase says the oddity occurred for both chase.com and users of the Chase mobile app. 

“We don’t have any evidence it was related to any update,” Weller said.

“There’s only so many kind of logic errors where Ken logs in and sees Brian’s account,” White said.  “It can be a devil to track down because every single time someone logs in it’s a roll of the dice — maybe they get something in the warmed up cache or they get a new hit. It’s tricky to debug, but this is like as bad as it gets in terms of screwup of the app.”

White said the incident is reminiscent of a similar glitch at online game giant Steam, which caused many customers to see account information for other Steam users for a few hours. He said he suspects the problem was a configuration error someplace within Chase.com “caching servers,” which are designed to ease the load on a Web application by periodically storing some common graphical elements on the page — such as images, videos and GIFs.

“The images, the site banner, all that’s fine to be cached, but you never want to cache active content or raw data coming back,” White said. “If you’re CNN, you’re probably caching all the content on the homepage. But for a banking app that has access to live data, you never want that to be cached.”

“It’s fairly easy to fix once you identify the problem,” he added. “I can imagine just getting the basics of the core issue [for Chase] would be kind of tricky and might mean a lot of non techies calling your Tier 1 support people.”

Update, 8:10 p.m. ET: Added comment from Chase about the incident affecting both mobile device and Web browser users.

From https://krebsonsecurity.com/2018/02/chase-glitch-exposed-customer-accounts/