Crooks have stolen tens of millions of dollars and other valuable commodities from thousands of consumers via “SIM swapping,” a particularly invasive form of fraud that involves tricking a target’s mobile carrier into transferring someone’s wireless service to a device they control. But the U.S. Federal Communications Commission (FCC), the entity responsible for overseeing wireless industry practices, has so far remained largely silent on the matter. Now, a cadre of lawmakers is demanding to know what, if anything, the agency might be doing to track and combat SIM swapping.

On Thursday, a half-dozen Democrats in the House and Senate sent a letter to FCC Chairman Ajit Pai, asking the agency to require the carriers to offer more protections for consumers against unauthorized SIM swaps.

“Consumers have no choice but to rely on phone companies to protect them against SIM swaps — and they need to be able to count on the FCC to hold mobile carriers accountable when they fail to sure their systems and thus harm consumers,” reads the letter, signed by Sens. Ron Wyden (OR), Sherrod Brown (OH) and Edward Markey (MA), and Reps. Ted Lieu (CA), Anna Eshoo (CA) and Yvette Clarke (NY).

SIM swapping is an insidious form of mobile phone fraud that is often used to steal large amounts of cryptocurrencies and other items of value from victims. All too frequently, the scam involves bribing or tricking employees at mobile phone stores into seizing control of the target’s phone number and diverting all texts and phone calls to the attacker’s mobile device.

Once in control of the stolen phone number, the attacker can then reset the password for any online account that allows password resets and/or two-factor verification requests via text messages or automated phone calls (i.e. most online services, including many of the mobile carrier Web sites).

From there, the scammers can pivot in a variety of directions, including: Plundering the victim’s financial accounts; hacking their identities on social media platforms;  viewing the victim’s email and call history; and abusing that access to harass and scam their friends and family.

The lawmakers asked the FCC to divulge whether it tracks consumer complaints about fraudulent SIM swapping and number “port-outs,” which involve moving the victim’s phone number to another carrier. The legislators demanded to know whether the commission offers any guidance for consumers or carriers on this important issue, and if the FCC has initiated any investigations or taken enforcement actions against carriers that failed to secure customer accounts.

The letter also requires the FCC to respond as to whether there is anything in federal regulations that prevents mobile carriers from sharing with banks information about the most recent SIM swap date of a customer as a way to flag potentially suspicious login attempts — a method already used by financial institutions in other countries, including Australia, the United Kingdom and several nations in Africa.

“Some carriers, both in the U.S. and abroad, have adopted policies that better protect consumers from SIM swaps, such as allowing customers to add optional security protections to their account that prevent SIM swaps unless the customer visits a store and shows ID,” the letter continues. “Unfortunately, implementation of these additional security measures by wireless carriers in the U.S. is still spotty and consumers are not likely to find out about the availability of these obscure, optional security features until it is too late.”

The FCC did not immediately respond to requests for comment.

SIM SWAP (CRIM)INNOVATIONS

Legitimate SIM swaps are a common request for all carriers, and they usually happen when a customer has lost their mobile phone or when they need to upgrade to a newer model that requires a different-sized SIM card (the small, removable smart chip that ties the customer’s device to their phone number).

But unauthorized SIM swaps enable even low-skilled thieves to quickly turn a victim’s life upside down and wrest control over a great deal of their online identities and finances. What’s more, the security options available to wireless customers concerned about SIM swapping — such as personal identification number (PIN) codes — are largely ineffective against crooked or clueless mobile phone store employees.

A successful SIM swap may allow tormentors to access a victim’s email inbox even after the target has changed his or her password. For example, some email services allow customers to reset their passwords just by providing a piece of information that would likely only be known to the legitimate account holder, such as the month and year the account was created, or the name of a custom folder or label in the account previously created by the user.

One technique used by SIM swappers to regain access to hacked inboxes is to jot down this information once a SIM swap affords them the ability to reset the account’s password. Alternatively, SIM swappers have been known to create their own folders or labels in the hacked account to facilitate backdoor access later on.

A number of young men have recently been criminally charged with using SIM swapping to steal accounts and cryptocurrencies like Bitcoin from victims. This week, a court in New York unsealed a grand jury indictment against 22-year-old alleged serial SIM swapper Nicholas Truglia, who stands accused of using the technique to siphon $24 million worth of cryptocurrencies from blockchain investor Michael Terpin.

But experts say the few arrests that have been made in conjunction with SIM swapping attacks have pushed many involved in this crime to enlist help from co-conspirators who are minors and thus largely outside the reach of federal prosecutors.

For his part, Terpin sent an open letter to FCC commissioners in October 2019, urging them to mandate that wireless carriers provide a way for customers to truly lock down their accounts against SIM swapping, even if that means requiring an in-person visit to a store or conversation with the carrier’s fraud department.

In an interview with KrebsOnSecurity, Terpin said the FCC has so far abdicated its responsibility over the carriers on this matter.

“It took them a long time to get around to taking robocalls seriously, but those scams rarely cost people millions of dollars,” Terpin said. “Imagine going into a bank and you don’t remember your PIN and the teller says, ‘Oh, that’s okay I can look it up for you.’ The fact that a $9-an-hour mobile store employee can see your high security password or PIN is shocking.”

“The carriers should also have to inform every single current and future customer that there is this high security option available,” Terpin continued. “That would stop a lot of this fraud and would take away the ability of these ne’er-do-well 19-year-old store employees who get bribed into helping out with the scam.”

Want to read more about SIM swapping? Check out Busting SIM Swappers and SIM Swap Myths, or view the entire catalog of stories on the topic here.

Late last year saw the re-emergence of a nasty phishing tactic that allows the attacker to gain full access to a user’s data stored in the cloud without actually stealing the account password. The phishing lure starts with a link that leads to the real login page for a cloud email and/or file storage service. Anyone who takes the bait will inadvertently forward a digital token to the attackers that gives them indefinite access to the victim’s email, files and contacts — even after the victim has changed their password.

Before delving into the details, it’s important to note two things. First, while the most recent versions of this stealthy phish targeted corporate users of Microsoft’s Office 365 service, the same approach could be leveraged to ensnare users of many other cloud providers. Second, this attack is not exactly new: In 2017, for instance, phishers used a similar technique to plunder accounts at Google’s Gmail service.

Still, this phishing tactic is worth highlighting because recent examples of it received relatively little press coverage. Also, the resulting compromise is quite persistent and sidesteps two-factor authentication, and thus it seems likely we will see this approach exploited more frequently in the future.

In early December, security experts at Phishlabs detailed a sophisticated phishing scheme targeting Office 365 users that used a malicious link which took people who clicked to an official Office 365 login page — login.microsoftonline.com. Anyone suspicious about the link would have seen nothing immediately amiss in their browser’s address bar, and could quite easily verify that the link indeed took them to Microsoft’s real login page:

Only by copying and pasting the link or by scrolling far to the right in the URL bar can we detect that something isn’t quite right:

As we can see from the URL in the image directly above, the link tells Microsoft to forward the authorization token produced by a successful login to the domain officesuited[.]com. From there, the user will be presented with a prompt that says an app is requesting permissions to read your email, contacts, OneNote notebooks, access your files, read/write to your mailbox settings, sign you in, read your profile, and maintain access to that data.

According to Phishlabs, the app that generates this request was created using information apparently stolen from a legitimate organization. The domain hosting the malicious app pictured above — officemtr[.]com — is different from the one I saw in late December, but it was hosted at the same Internet address as officesuited[.]com and likely signed using the same legitimate company’s credentials.

Phishlabs says the attackers are exploiting a feature of Outlook known as “add-ins,” which are applications built by third-party developers that can be installed either from a file or URL from the Office store.

“By default, any user can apply add-ins to their outlook application,” wrote Phishlabs’ Michael Tyler. “Additionally, Microsoft allows Office 365 add-ins and apps to be installed via side loading without going through the Office Store, and thereby avoiding any review process.”

In an interview with KrebsOnSecurity, Tyler said he views this attack method more like malware than traditional phishing, which tries to trick someone into giving their password to the scammers.

“The difference here is instead of handing off credentials to someone, they are allowing an outside application to start interacting with their Office 365 environment directly,” he said.

Many readers at this point may be thinking that they would hesitate before approving such powerful permissions as those requested by this malicious application. But Tyler said this assumes the user somehow understands that there is a malicious third-party involved in the transaction.

“We can look at the reason phishing is still around, and it’s because people are making decisions they shouldn’t be making or shouldn’t be able to make,” he said. “Even employees who are trained on security are trained to make sure it’s a legitimate site before entering their credentials. Well, in this attack the site is legitimate, and at that point their guard is down. I look at this and think, would I be more likely to type my password into a box or more likely to click a button that says ‘okay’?”

The scary part about this attack is that once a user grants the malicious app permissions to read their files and emails, the attackers can maintain access to the account even after the user changes his password. What’s more, Tyler said the malicious app they tested was not visible as an add-in at the individual user level; only system administrators responsible for managing user accounts could see that the app had been approved.

Furthermore, even if an organization requires multi-factor authentication at sign-in, recall that this phish’s login process takes place on Microsoft’s own Web site. That means having two-factor enabled for an account would do nothing to prevent a malicious app that has already been approved by the user from accessing their emails or files.

Once given permission to access the user’s email and files, the app will retain that access until one of two things happen: Microsoft discovers and disables the malicious app, or an administrator on the victim user’s domain removes the program from the user’s account.

Expecting swift action from Microsoft might not be ideal: From my testing, Microsoft appears to have disabled the malicious app being served from officesuited[.]com sometime around Dec. 19 — roughly one week after it went live.

In a statement provided to KrebsOnSecurity, Microsoft Senior Director Jeff Jones said the company continues to monitor for potential new variations of this malicious activity and will take action to disable applications as they are identified.

“The technique described relies on a sophisticated phishing campaign that invites users to permit a malicious Azure Active Directory Application,” Jones said. “We’ve notified impacted customers and worked with them to help remediate their environments.”

Microsoft’s instructions for detecting and removing illicit consent grants in Office 365 are here. Microsoft says administrators can enable a setting that blocks users from installing third-party apps into Office 365, but it calls this a “drastic step” that “isn’t strongly recommended as it severely impairs your users’ ability to be productive with third-party applications.”

Phishlabs’ Tyler said he disagrees with Microsoft here, and encourages Office 365 administrators to block users from installing apps altogether — or at the very least restrict them to apps from the official Microsoft store.

Apart from that, he said, it’s important for Office 365 administrators to periodically look for suspicious apps installed on their Office 365 environment.

“If an organization were to fall prey to this, your traditional methods of eradicating things involve activating two-factor authentication, clearing the user’s sessions, and so on, but that won’t do anything here,” he said. “It’s important that response teams know about this tactic so they can look for problems. If you can’t or don’t want to do that, at least make sure you have security logging turned on so it’s generating an alert when people are introducing new software into your infrastructure.”

Organizations in the throes of cleaning up after a ransomware outbreak typically will change passwords for all user accounts that have access to any email systems, servers and desktop workstations within their network. But all too often, ransomware victims fail to grasp that the crooks behind these attacks can and frequently do siphon every single password stored on each infected endpoint. The result of this oversight may offer attackers a way back into the affected organization, access to financial and healthcare accounts, or — worse yet — key tools for attacking the victim’s various business partners and clients.

In mid-November 2019, Wisconsin-based Virtual Care Provider Inc. (VCPI) was hit by the Ryuk ransomware strain. VCPI manages the IT systems for some 110 clients that serve approximately 2,400 nursing homes in 45 U.S. states. VCPI declined to pay the multi-million dollar ransom demanded by their extortionists, and the attack cut off many of those elder care facilities from their patient records, email and telephone service for days or weeks while VCPI rebuilt its network.

Just hours after that story was published, VCPI chief executive and owner Karen Christianson reached out to say she hoped I would write a follow-up piece about how they recovered from the incident. My reply was that I’d consider doing so if there was something in their experience that I thought others could learn from their handling of the incident.

I had no inkling at the time of how much I would learn in the days ahead.

EERIE EMAILS

On December 3, I contacted Christianson to schedule a follow-up interview for the next day. On the morning of Dec. 4 (less than two hours before my scheduled call with VCPI and more than two weeks after the start of their ransomware attack) I heard via email from someone claiming to be part of the criminal group that launched the Ryuk ransomware inside VCPI.

That email was unsettling because its timing suggested that whoever sent it somehow knew I was going to speak with VCPI later that day. This person said they wanted me to reiterate a message they’d just sent to the owner of VCPI stating that their offer of a greatly reduced price for a digital key needed to unlock servers and workstations seized by the malware would expire soon if the company continued to ignore them.

“Maybe you chat to them lets see if that works,” the email suggested.

The anonymous individual behind that communication declined to provide proof that they were part of the group that held VPCI’s network for ransom, and after an increasingly combative and personally threatening exchange of messages soon stopped responding to requests for more information.

“We were bitten with releasing evidence before hence we have stopped this even in our ransoms,” the anonymous person wrote. “If you want proof we have hacked T-Systems as well. You may confirm this with them. We havent [sic] seen any Media articles on this and as such you should be the first to report it, we are sure they are just keeping it under wraps.” Security news site Bleeping Computer reported on the T-Systems Ryuk ransomware attack on Dec. 3.

In our Dec. 4 interview, VCPI’s acting chief information security officer — Mark Schafer, CISO at Wisconsin-based SVA Consulting — confirmed that the company received a nearly identical message that same morning, and that the wording seemed “very similar” to the original extortion demand the company received.

However, Schafer assured me that VCPI had indeed rebuilt its email network following the intrusion and strictly used a third-party service to discuss remediation efforts and other sensitive topics.

‘LIKE A COMPANY BATTLING A COUNTRY’

Christianson said several factors stopped the painful Ryuk ransomware attack from morphing into a company-ending event. For starters, she said, an employee spotted suspicious activity on their network in the early morning hours of Saturday, Nov. 16. She said that employee then immediately alerted higher-ups within VCPI, who ordered a complete and immediate shutdown of the entire network.

“The bottom line is at 2 a.m. on a Saturday, it was still a human being who saw a bunch of lights and had enough presence of mind to say someone else might want to take a look at this,” she said. “The other guy he called said he didn’t like it either and called the [chief information officer] at 2:30 a.m., who picked up his cell phone and said shut it off from the Internet.”

Schafer said another mitigating factor was that VCPI had contracted with a third-party roughly six months prior to the attack to establish off-site data backups that were not directly connected to the company’s infrastructure.

“The authentication for that was entirely separate, so the lateral movement [of the intruders] didn’t allow them to touch that,” Schafer said.

Schafer said the move to third-party data backups coincided with a comprehensive internal review that identified multiple areas where VCPI could harden its security, but that the attack hit before the company could complete work on some of those action items.

“We did a risk assessment which was pretty much spot-on, we just needed more time to work on it before we got hit,” he said. “We were doing the right things, just not fast enough. If we’d had more time to prepare, it would have gone better. I feel like we were a company battling a country. It’s not a fair fight, and once you’re targeted it’s pretty tough to defend.”

WHOLESALE PASSWORD THEFT

Just after receiving a tip from a reader about the ongoing Ryuk infestation at VCPI, KrebsOnSecurity contacted Milwaukee-based Hold Security to see if its owner Alex Holden had any more information about the attack. Holden and his team had previously intercepted online communications between and among multiple ransomware gangs and their victims, and I was curious to know if that held true in the VCPI attack as well.

Sure enough, Holden quickly sent over several logs of data suggesting the attackers had breached VCPI’s network on multiple occasions over the previous 14 months.

“While it is clear that the initial breach occurred 14 months ago, the escalation of the compromise didn’t start until around November 15th of this year,” Holden said at the time. “When we looked at this in retrospect, during these three days the cybercriminals slowly compromised the entire network, disabling antivirus, running customized scripts, and deploying ransomware. They didn’t even succeed at first, but they kept trying.”

Holden said it appears the intruders laid the groundwork for the VPCI using Emotet, a powerful malware tool typically disseminated via spam.

“Emotet continues to be among the most costly and destructive malware,” reads a July 2018 alert on the malware from the U.S. Department of Homeland Security. “Its worm-like features result in rapidly spreading network-wide infection, which are difficult to combat.”

According to Holden, after using Emotet to prime VCPI’s servers and endpoints for the ransomware attack, the intruders deployed a module of Emotet called Trickbot, which is a banking trojan often used to download other malware and harvest passwords from infected systems.

Indeed, Holden shared records of communications from VCPI’s tormentors suggesting they’d unleashed Trickbot to steal passwords from infected VCPI endpoints that the company used to log in at more than 300 Web sites and services, including:

-Identity and password management platforms Auth0 and LastPass
-Multiple personal and business banking portals;
-Microsoft Office365 accounts
-Direct deposit and Medicaid billing portals
-Cloud-based health insurance management portals
-Numerous online payment processing services
-Cloud-based payroll management services
-Prescription management services
-Commercial phone, Internet and power services
-Medical supply services
-State and local government competitive bidding portals
-Online content distribution networks
-Shipping and postage accounts
-Amazon, Facebook, LinkedIn, Microsoft, Twitter accounts

Toward the end of my follow-up interview with Schafer and VCPI’s Christianson, I shared Holden’s list of sites for which the attackers had apparently stolen internal company credentials. At that point, Christianson abruptly ended the interview and got off the line, saying she had personal matters to attend to. Schafer thanked me for sharing the list, noting that it looked like VCPI probably now had a “few more notifications to do.”

Moral of the story: Companies that experience a ransomware attack — or for that matter any type of equally invasive malware infestation — should assume that all credentials stored anywhere on the local network (including those saved inside Web browsers and password managers) are compromised and need to be changed.

Out of an abundance of caution, this process should be done from a pristine (preferably non-Windows-based) system that does not reside within the network compromised by the attackers. In addition, full use should be made of the strongest method available for securing these passwords with multi-factor authentication.

Today marks the 10th anniversary of KrebsOnSecurity.com! Over the past decade, the site has featured more than 1,800 stories focusing mainly on cybercrime, computer security and user privacy concerns. And what a decade it has been.

Stories here have exposed countless scams, data breaches, cybercrooks and corporate stumbles. In the ten years since its inception, the site has attracted more than 37,000 newsletter subscribers, and nearly 100 million pageviews generated by roughly 40 million unique visitors.

Some of those 40 million visitors left more than 100,000 comments. The community that has sprung up around KrebsOnSecurity has been truly humbling and a joy to watch, and I’m eternally grateful for all your contributions.

One housekeeping note: A good chunk of the loyal readers here are understandably security- and privacy-conscious, and many block advertisements by default — including the ads displayed here.

Just a reminder that KrebsOnSecurity does not run third-party ads and has no plans to change that; all of the creatives you see on this site are hosted in-house, are purely image-based, and are vetted first by Yours Truly. Love them or hate ’em, these ads help keep the content at KrebsOnSecurity free to any and all readers. If you’re currently blocking ads here, please consider making an exception for this site.

Last but certainly not least, thank you for your readership. I couldn’t have done this without your encouragement, wisdom, tips and support. Here’s wishing you all a happy, healthy and wealthy 2020, and for another decade of stories to come.

Synoptek, a California business that provides cloud hosting and IT management services to more than a thousand customers nationwide, suffered a ransomware attack this week that has disrupted operations for many of its clients, according to sources. The company has reportedly paid a ransom demand in a bid to restore operations as quickly as possible.

Irvine, Calif.-based Synoptek is a managed service provider that maintains a variety of cloud-based services for more than 1,100 customers across a broad spectrum of industries, including state and local governments, financial services, healthcare, manufacturing, media, retail and software. The company has nearly a thousand employees and brought in more than $100 million in revenue in the past year, according to their Web site.

News of the incident first surfaced on Reddit, which lit up on Christmas Eve with posts from people working at companies affected by the outage. The only official statement about any kind of incident came late Friday evening from the company’s Twitter page, which said that on Dec. 23 it experienced a “credential compromise which has been contained,” and that Synoptek “took immediate action and have been working diligently with customers to remediate the situation.”

Synoptek has not yet responded to multiple requests for comment. But two sources who work at the company have now confirmed their employer was hit by Sodinokibi, a potent ransomware strain also known as “rEvil” that encrypts data and demands a cryptocurrency payment in return for a digital key that unlocks access to infected systems. Those sources also say the company paid their extortionists an unverified sum in exchange for decryption keys.

Sources also confirm that both the State of California and the U.S. Department of Homeland Security have been reaching out to state and local entities potentially affected by the attack. One Synoptek customer briefed on the attack who asked to remain anonymous said that once inside Synoptek’s systems, the intruders used a remote management tool to install the ransomware on client systems.

Much like other ransomware gangs operating today, the crooks behind Sodiniokibi seem to focus on targeting IT providers. And it’s not hard to see why: With each passing day of an attack, customers affected by it vent their anger and frustration on social media, which places increased pressure on the provider to simply pay up.

A Sodinokibi attack earlier this month on Colorado-based IT services firm Complete Technology Solutions resulted in ransomware being installed on computers at more than 100 dentistry practices that relied on the company. In August, Wisconsin-based IT provider PerCSoft was hit by Sodinokibi, causing outages for more than 400 clients.

To put added pressure on victims to negotiate payment, the purveyors of Sodinokibi recently stated that they plan to publish data stolen from companies infected with their malware who elect to rebuild their operations instead of paying the ransom.

In addition, the group behind the Maze Ransomware malware strain recently began following through on a similar threat, erecting a site on the public Internet that lists victims by name and includes samples of sensitive documents stolen from victims who have opted not to pay. When the site was first set up on Dec. 14, it listed just eight victims; as of today, there are more than two dozen companies named.