ZeuS Bank Malware Returns, Targets SMBs and Surges on Facebook

By Kevin Casey

Even criminals need to periodically retool their operations for current market conditions.
The ZeuS/ZBot malware has resurfaced “with a vengeance,” according to security researchers. The “new” ZeuS is ultimately a matter of economics, according to Security Response director Kevin Haley. The data-stealing malware hadn’t been eradicated, per se — it was just getting a profit-minded makeover.

“Like legitimate software, malware goes through revisions and new releases,” Haley said in an email to InformationWeek. “These new releases include improvements or new features that make them popular and increase their prevalence. ZeuS is no different.”

ZeuS’s second verse is much the same as the first; though technically a new threat, the fundamentals here should all sound familiar. The malware is good at stealing data off of infected machines. Banking credentials are the favorite target. And while ZeuS doesn’t discriminate, smaller companies are especially vulnerable to its fallout.

“Small businesses have a bulls-eye on their back,” Haley said. The reasoning is the stuff of sound — albeit illegal — market research: Small and midsize businesses (SMBs) have more money than the average individual, but often have less security protection than large enterprises. Bank accounts typically top the list of security risks inside SMBs, and Haley doesn’t expect that to change any time soon

Like phishing and other “old” scams, ZeuS is back because it works — very well, in some cases. In 2009, for example, hackers lifted $588,000 from a Maine construction company’s bank account before the theft was detected. A ZeuS variant was later found on an employee’s computer, according to court documents. The company, Patco, sued its bank for the $345,000 it couldn’t recover, a watershed case for determining financial responsibility in such instances of online fraud. (Business accounts don’t come with the same regulatory protections as consumer accounts.) Patco lost, but a federal appeals court later overturned the verdict. (Read below **)

The advice for defending against the ZeuS reboot and similar threats should also sound familiar. (If not, you’ve got work to do.) Use strong security technologies. Educate, train and test employees on security policies and risks; don’t assume common sense rules the day, nor that “everyone” knows a phishing email or malicious Facebook link when they see one. Everyone does not, and even those that do make mistakes. In a case similar to Patco’s, the controller at a midsize business clicked on a link in an email that appeared to be from Comerica, the company’s bank. After entering the corporate username and password, crooks initiated offshore wire transfers totaling more than $1.9 million — and ultimately made off with more than $560,000 after the bank’s fraud protocols kicked into gear.

Haley recommends spending extra training time with finance pros and any other employees with access to corporate financial accounts or other high-risk credentials. Such access should be granted judiciously, too. Every employee with access is a data breach-in-waiting, especially with ubiquitous social media usage and growing social engineering threats.

“Limit the number of people who have login and password access to bank accounts,” Haley said. “And seriously consider dedicating machines to only banking. Email and Web browsing are popular infection vectors for Zeus, so avoiding those activities will significantly lower the risk of a machine used for online banking from getting infected.”

The extra security effort is worth it, lest you log in one morning to find the corporate coffers have been cleaned out. “An infection like ZeuS can be devastating to a small business,” Haley said

By Mathew J. Schwartz

Score one for common-sense rulings: A three-person federal appeals court Tuesday slammed a bank for failing to spot fraudulent transactions, despite the bank’s security systems having flagged six related transactions as “high risk” and very likely fraudulent.

The court’s decision reverses a lower-court ruling that found that Ocean Bank wasn’t responsible for the fraudulent transactions initiated by attackers, who withdrew $589,000 from the account of Patco Construction, a family-owned construction firm in southern Maine. While the bank recovered almost half of those funds, the previous ruling had meant that Patco wouldn’t recover the rest.

But in the new federal appeals court ruling, the judges decided to “leave open the question of what, if any, obligations or responsibilities” Maine’s Uniform Commercial Code (UCC) imposed on Ocean Bank, which has since been acquired by People’s United Bank, and said they were allowing the suit to proceed. But in their ruling, the judges pointedly asked whether both parties might not “be wiser to invest their resources in resolving this matter by agreement.”

Here’s how the attack unfolded: Over seven days in May 2009, attackers used the construction firm’s banking details and security-challenge questions–captured using Zeus malware–to authorize the money transfers. “The perpetrators supplied the proper credentials of one of Patco’s employees, including her ID, password, and answers to her challenge questions,” court documents read. “The payment on this withdrawal was directed to go to the accounts of numerous individuals, none of whom had previously been sent money by Patco. The perpetrators logged in from a device unrecognized by Ocean Bank’s system and from an IP address that Patco had never before used.”

While the bank recovered about $243,400 of Patco’s missing money, the construction firm was left with $345,440 out of pocket. Accordingly, in 2010, Patco sued the bank to recover the rest, alleging per Maine’s UCC that the bank hadn’t used a “commercially reasonable” security system.

But last year, U.S. District Court magistrate D. Brock Hornby in Maine disagreed after finding that the bank had complied with Federal Financial Institutions Examinations Council (FFIEC) security guidelines. Those rules, set in 2005, required banks to use a second factor to secure online transactions. Hornby recommended that the case be dismissed.

His ruling drew widespread criticism, however, for putting the bank account information security onus on small and midsize businesses rather than on banks. According to many security experts, since the rise of financial malware and more advanced attacks, the minimum security safeguards required by the FFIEC no longer offer a reasonable level of protection. Furthermore, while banks have been beefing up security for consumer customers, many have left small and midsize business customers more exposed, according to security experts. Accordingly, criminals have been harvesting business account credentials and targeting them with increasing prevalence.

The three-judge federal appeals court seemed to agree, noting in their ruling Tuesday that as far back as 2005, security firm RSA was warning that challenge questions were “quicker and simpler to adopt but were less secure,” and should be used only “in the short term, as the first phase of a full project,” and then triggered only in response to suspicious activity.

But beginning in 2008, Ocean Bank began using challenge questions for any transaction over $1. Furthermore, the judges said that the problem of keyloggers targeting financial accounts was widely known then, and that a “common-sense” security response from the bank would have addressed that fact since there was no way a bank customer would have been able to spot when an attacker had obtained and used their security-challenge questions. In fact, the bank spotted the fraudulent transactions only after some transfers were rejected by the receiving banks because the transfers referenced invalid account numbers.

Ocean Bank already had software in place to detect fraudulent transactions, which it ignored. Notably, the bank’s risk-scoring engine generated a score of 790 for the first fraudulent transfer from the Patco account. That score was a significant departure from Patco’s usual risk scores, which ranged from 10 to 214. “Despite this high risk score, Patco was not notified. Moreover, it appears no one at the bank monitored these high-risk transactions,” read the ruling. Some of the subsequent fraudulent transactions, which involved sums that were orders of magnitude larger than any transfers Patco had ever made to third parties, scored 720, 563, and 785.

“Although the bank’s security system flagged each of these transactions as unusually high-risk because they were inconsistent with the timing, value, and geographic location of Patco’s regular payment orders, the bank’s security system did not notify its commercial customers of this information and allowed the payments to go through,” said the ruling.

“Because it had the capacity to do all of those things yet failed to do so, we cannot conclude that its security system was commercially reasonable,” wrote the judges. “We emphasize that it was these collective failures taken as a whole, rather than any single failure, which rendered Ocean Bank’s security system commercially unreasonable.”

But the ruling noted that in the wake of the Patco attack, the bank did implement several improvements. “Since then, the bank has instituted a policy of calling the customer in the case of uncharacteristic transactions to inquire if the customer did indeed initiate the transaction,” the judges wrote

Brought to you by MspPortal.net security news team

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