Getting Smart with Mobile App GeoLocation to Fight Fraud

If your mobile application includes purchases with credit cards, and a pickup of the merchandise, then you should pay attention to this.

Recently, in our testing lab and during an intelligence engagement, we identified a fraud mechanism where stolen credit cards were being used via the mobile app in question, to fraudulently purchase goods. In fact, the attackers were selling the purchase of the goods as a service on auction and market sites on the dark web.

The scam works like this. The bad guys have stolen credit cards (track data, likely from dumps), which they use to make a purchase for their client remotely. The bad guys use their stolen track data as a card not present transaction, which is standard for mobile apps. The bad guys have access to huge numbers of stolen cards, so they can burn them at a substantial rate without impacting their inventory to a large extent. The bad guy’s customer spends $25 in bitcoins to get up to $100 in merchandise. The bad guy takes the order from the dark net, uses the mobile app to place the order, and then delivers the receipt and/or pickup information to the bad guys customer. The customer then walks into the retailer and shows the receipt for their mobile order, picking up the merchandise and leaving.

The bad guy gets paid via the bitcoins. For them, this is an extremely low risk way to convert stolen credit card info to cash. It is significantly less risky for them than doing physical card replication, ATM use or other conversion methods that have a requirement for physical interaction.

The bad guy’s customer gets paid by picking up the merchandise. They get up to $100 value for a cost of $25. They take on some risk, but if performed properly, the scam is low risk to them, or so they believe. In the odd event, they simply leave the store after making their demands for satisfaction. There is little risk of arrest or prosecution, it would seem, especially at the low rate of $100 – or at least that was how the bad guy was pitching it to their prospective customers…

The credit card issuer or the merchant gets stuck. They are out the merchandise and/or the money, depending on their location in the world, and the merchant agreement/charge back/PCI compliance issues they face.

Understanding the fraud and motivations of the bad guys is critical for securing the systems in play. Organizations could up their validation techniques and vigilance for mobile orders. They could add additional fraudulent transaction heuristics to their capability. They could also implement geo-location on the mobile apps as a control – i.e.. If the order is being physically placed on a device in Ukraine, and pick up is in New York, there is a higher level of risk associated with that transaction. Identifying ways  to leverage the sensors and data points from a mobile device, and rolling it into fraud detection heuristics and machine learning analytics is the next wave of security for some of these applications. We are pleased to be helping clients get there…

To hear more about modern fraud techniques, application security testing or targeted threat intelligence like what we discussed above, drop us a line (info at microsolved dot com) or via Twitter (@lbhuston). We look forward to discussing it with your team.

State Of Security Podcast Episode 3 is Now Available

Episode 3 of the podcast is now available!

In this edition, I sit down with Bill @Sempf to discuss application security, working with development teams and how to get security and dev folks on the same page. Bill goes so far as to recommend a simple 2 step process that you simply have to hear!

Check it out:

And give us feedback on Twitter (@lbhuston) about this and all other episodes or ideas you have about what you would like us to cover. Thanks for listening!  

Quick PHP Malware vs AV Update

It’s been a while since I checked on the status of PHP malware versus anti-virus. So, here is a quick catch up post. (I’ve been talking about this for a while now. Here is an old example.)

I took a randomly selected piece of PHP malware from the HITME and checked it out this afternoon. Much to my surprise, the malware detection via AV has gotten better.

The malware I grabbed for the test turned out to be a multi-stage PHP backdoor. The scanner thought it was exploiting a vulnerable WordPress installation. 

I unpacked the malware parts into plain text and presented both the original packed version from the log and the unpacked version to VirusTotal for detection testing. As you know, in the past, detection of malware PHP was sub single digits in many cases. That, at least to some extent has changed. For those interested, here are the links to see what was tripped.

Decoded to plain text vs Encoded, as received

As you can see, decoded to plain text scored a detection of 44% (19/43), which is significantly improved from a year or so ago. Additionally, excitingly, undecoded, the attack in raw form triggered a detection rate of 30% (13/44)! The undecoded result is HUGE, given that the same test a year or so ago often yielded 0-2% detection rates. So, it’s getting better, just SLOWLY.

Sadly though, even with the improvements, we are still well below half (50%) detection rates and many of the AV solutions that fail to catch the PHP malware are big name vendors with commercial products that organizations running PHP in commercial environments would likely be depending on. Is your AV in the missing zone? If so, you might want to consider other forms of more nuanced detection

Now, obviously, organizations aren’t just depending on AV alone for detection of web malware. But, many may be. In fact, a quick search for the dropped backdoor file on Google showed 58,800 systems with the dropped page name (a semi-unique indicator of compromise). With that many targets already victim to this single variant of PHP backdoors, it might be worth checking into if you are a corporate PHP user.

Until next time, take a look around for PHP in your organization. It is a commonly missed item in the patch and update cycles. It also has a pretty wide security posture with a long list of known attack tools and common vulnerabilities in the coding patterns used by many popular products. Give any PHP servers you have a deeper inspection and consider adding more detection capability around them. As always, thanks for reading and stay safe out there! 

Which Application Testing is Right for Your Organization?

Millions of people worldwide bank, shop, buy airline tickets, and perform research using the World Wide Web. Each transaction usually includes sharing private information such as names, addresses, phone numbers, credit card numbers, and passwords. They’re routinely transferred and stored in a variety of locations. Billions of dollars and millions of personal identities are at stake every day. In the past, security professionals thought firewalls, Secure Sockets Layer (SSL), patching, and privacy policies were enough to protect websites from hackers. Today, we know better.

Whatever your industry — you should have a consistent testing schedule completed by a security team. Scalable technology allows them to quickly and effectively identify your critical vulnerabilities and their root causes in nearly any type of system, application, device or implementation.

At MSI, our reporting presents clear, concise, action-oriented mitigation strategies that allows your organization to address the identified risks at the technical, management and executive levels.

There are several ways to strengthen your security posture. These strategies can help: application scanning, application security assessments, application penetration testing, and risk assessments.

Application scanning can provide an excellent and affordable way for organizations to meet the requirements of due diligence; especially for secondary, internal, well-controlled or non-critical applications.

Application security assessments can identify security problems, catalog their exposures, measure risk, and develop mitigation strategies that strengthen your applications for your customers. This is a more complete solution than a scan since it goes deeper into the architecture.

Application penetration testing uses tools and scripts to mine your systems for data and examine underlying session management and cryptography. Risk assessments include all policies and processes associated with the specific application, and will be reviewed depending on the complexity of your organization.

In order to protect your organization against security breaches (which are only increasing in frequency), consider conducting an application scan, application  assessment, application penetration test, or risk assessment on a regular basis. If you need help deciding which choice is best for you, let us know. We’re here to help!

Smartphones and Banking Applications

Mobile banking users are predicted to reach 400 million by 2013, according to a study by Juniper Research.

The report author, Howard Wilcox, says that transactional or “push” mobile banking is being offered increasingly by banks via downloadable applications or the mobile web, complementing existing SMS messaging services for balance and simple information enquiries.

“For the user it’s about three things: convenience, convenience and convenience,” Mr. Wilcox said. “The mobile device is almost always with you, and if you organize your life with your mobile, then why not your finances too?

“For example, people can receive account alerts and reminders straight away and take action immediately if necessary – say to top up an account or pay a bill,” he said. “With apps, the whole process is made so much simpler too.”

We know consumers want to make their lives easier — and using applications on their mobile phones seems to promise that, but how can you secure those applications?
Here are some of the steps you can take to start making your mobile applications secure:

  • Security controls: One of the main issues with smartphone applications is access control. These apps are usually used in the most vulnerable locations: public settings such as airports, restaurants, and lobbies. All mobile devices must have a protective mechanism that allows it to be accessed by authorized persons only. A few ways to monitor control would be: install anti-virus software, file encryption, session encryption, device registration, and password complexity rules.
  • User authentication: Access privileges are limited to those who use the smartphone device. Personal identification numbers are generally an acceptable means of authentication because they reside on the device only and are never transmitted.
  • Data Encryption: A powerful defense tool, encryption prevents anyone but the most savvy attacker to access important information. Ensure that the process is automatic and transparent to the user and protects all stored data. Systems that require user involvement to encrypt specific files in specific places cannot provide the “provable” security regime needed by organizations. Encryption is effective only if authorized people control the decryption key, so there needs to be a connection between encryption and user authentication. Access control, user authentication and encryption are the three elements that comprise virtual physical-access control.
  • Security administration: This needs to be in place for customers who have questions or need help. Policy enforcement, deployment, updates, help desk, key recovery and system logging are all vital components of an enterprise system that provides “provable” security to comply with data privacy regulations and to repel litigation.

Many phones use RSA encryption for authentication. While most of the big antivirus vendors provide security solutions for smartphones, few have the “silver bullet” for all platforms. As device manufacturers continue to add processing power and storage capacity; and platform vendors provide more applications for generating and consuming data, security will become a greater concern as attackers look upon it as their new playground.

New Tools Keep Coming

Several new and updated tools have been released recently. These are mostly aimed at application scanning, specifically getting into the backend database. While it’s no surprise that these tools keep coming, we just want to reinforce the need for better application security. We don’t anticipate an end to attacker tools anytime soon, so keep your guards up 😉