The U.S. Federal Communications Commission (FCC) today proposed fines of more than $200 million against the nation’s four largest wireless carriers for selling access to their customers’ location information without taking adequate precautions to prevent unauthorized access to that data. While the fines would be among the largest the FCC has ever levied, critics say the penalties don’t go far enough to deter wireless carriers from continuing to sell customer location data.

The FCC proposed fining T-Mobile $91 million; AT&T faces more than $57 million in fines; Verizon is looking at more than $48 million in penalties; and the FCC said Sprint should pay more than $12 million.

An FCC statement (PDF) said “the size of the proposed fines for the four wireless carriers differs based on the length of time each carrier apparently continued to sell access to its customer location information without reasonable safeguards and the number of entities to which each carrier continued to sell such access.”

The fines are only “proposed” at this point because the carriers still have an opportunity to respond to the commission and contest the figures. The Wall Street Journal first reported earlier this week that the FCC was considering the fines.

The commission said it took action in response to a May 2018 story broken by The New York Times, which exposed how a company called Securus Technologies had been selling location data on customers of virtually any major mobile provider to law enforcement officials.

That same month, KrebsOnSecurity broke the news that LocationSmart — a data aggregation firm working with the major wireless carriers — had a free, unsecured demo of its service online that anyone could abuse to find the near-exact location of virtually any mobile phone in North America.

In response, the carriers promised to “wind down” location data sharing agreements with third-party companies. But in 2019, Joseph Cox at Vice.com showed that little had changed, detailing how he was able to locate a test phone after paying $300 to a bounty hunter who simply bought the data through a little-known third-party service.

Gigi Sohn is a fellow at the Georgetown Law Institute for Technology Law and Policy and a former senior adviser to former FCC Chair Tom Wheeler in 2015. Sohn said this debacle underscores the importance of having strong consumer privacy protections.

“The importance of having rules that protect consumers before they are harmed cannot be overstated,” Sohn said. “In 2016, the Wheeler FCC adopted rules that would have prevented most mobile phone users from suffering this gross violation of privacy and security. But [FCC] Chairman Pai and his friends in Congress eliminated those rules, because allegedly the burden on mobile wireless providers and their fixed broadband brethren would be too great. Clearly, they did not think for one minute about the harm that could befall consumers in the absence of strong privacy protections.”

Sen. Ron Wyden (D-Ore.), a longtime critic of the FCC’s inaction on wireless location data sharing, likewise called for more string consumer privacy laws, calling the proposed punishment “comically inadequate fines that won’t stop phone companies from abusing Americans’ privacy the next time they can make a quick buck.”

“Time and again, from Facebook to Equifax, massive companies take reckless disregard for Americans’ personal information, knowing they can write off comparatively tiny fines as the cost of doing business,” Wyden said in a written statement. “The only way to truly protect Americans’ personal information is to pass strong privacy legislation like my Mind Your Own Business Act [PDF] to put teeth into privacy laws and hold CEOs personally responsible for lying about protecting Americans’ privacy.”

On Monday, networking hardware maker Zyxel released security updates to plug a critical security hole in its network attached storage (NAS) devices that is being actively exploited by crooks who specialize in deploying ransomware. Today, Zyxel acknowledged the same flaw is present in many of its firewall products.

This week’s story on the Zyxel patch was prompted by the discovery that exploit code for attacking the flaw was being sold in the cybercrime underground for $20,000. Alex Holden, the security expert who first spotted the code for sale, said at the time the vulnerability was so “stupid” and easy to exploit that he wouldn’t be surprised to find other Zyxel products were similarly affected.

Now it appears Holden’s hunch was dead-on.

“We’ve now completed the investigation of all Zyxel products and found that firewall products running specific firmware versions are also vulnerable,” Zyxel wrote in an email to KrebsOnSecurity. “Hotfixes have been released immediately, and the standard firmware patches will be released in March.”

The updated security advisory from Zyxel states the exploit works against its UTM, ATP, and VPN firewalls running firmware version ZLD V4.35 Patch 0 through ZLD V4.35 Patch 2, and that those with firmware versions before ZLD V4.35 Patch 0 are not affected.

Zyxel’s new advisory suggests that some affected firewall product won’t be getting hotfixes or patches for this flaw, noting that the affected products listed in the advisory are only those which are “within their warranty support period.”

Indeed, while the exploit also works against more than a dozen of Zyxel’s NAS product lines, the company only released updates for NAS products that were newer than 2016. Its advice for those still using those unsupported NAS devices? “Do not leave the product directly exposed to the internet. If possible, connect it to a security router or firewall for additional protection.”

Hopefully, your vulnerable, unsupported Zyxel NAS isn’t being protected by a vulnerable, unsupported Zyxel firewall product.

CERT’s advisory on the flaw rate this vulnerability at a “10” — its most severe. My advice? If you can’t patch it, pitch it. The zero-day sales thread first flagged by Holden also hinted at the presence of post-authentication exploits in many Zyxel products, but the company did not address those claims in its security advisories.

Recent activity suggests that attackers known for deploying ransomware have been actively working to test the zero-day for use against targets. Holden said the exploit is now being used by a group of bad guys who are seeking to fold the exploit into Emotet, a powerful malware tool typically disseminated via spam that is frequently used to seed a target with malcode which holds the victim’s files for ransom.

“To me, a 0day exploit in Zyxel is not as scary as who bought it,” he said. “The Emotet guys have been historically targeting PCs, laptops and servers, but their venture now into IoT devices is very disturbing.”

Patch comes amid active exploitation by ransomware gangs

Networking hardware vendor Zyxel today released an update to fix a critical flaw in many of its network attached storage (NAS) devices that can be used to remotely commandeer them. The patch comes 12 days after KrebsOnSecurity alerted the company that precise instructions for exploiting the vulnerability were being sold for $20,000 in the cybercrime underground.

Based in Taiwan, Zyxel Communications Corp. (a.k.a “ZyXEL”) is a maker of networking devices, including Wi-Fi routers, NAS products and hardware firewalls. The company has roughly 1,500 employees and boasts some 100 million devices deployed worldwide. While in many respects the class of vulnerability addressed in this story is depressingly common among Internet of Things (IoT) devices, the flaw is notable because it has attracted the interest of groups specializing in deploying ransomware at scale.

KrebsOnSecurity first learned about the flaw on Feb. 12 from Alex Holden, founder of Milwaukee-based security firm Hold Security. Holden had obtained a copy of the exploit code, which allows an attacker to remotely compromise more than a dozen types of Zyxel NAS products remotely without any help from users.

Holden said the seller of the exploit code — a ne’er-do-well who goes by the nickname “500mhz” –is known for being reliable and thorough in his sales of 0day exploits (a.k.a. “zero-days,” these are vulnerabilities in hardware or software products that vendors first learn about when exploit code and/or active exploitation shows up online).

For example, this and previous zero-days for sale by 500mhz came with exhaustive documentation detailing virtually everything about the flaw, including any preconditions needed to exploit it, step-by-step configuration instructions, tips on how to remove traces of exploitation, and example search links that could be used to readily locate thousands of vulnerable devices.

500mhz’s profile on one cybercrime forum states that he is constantly buying, selling and trading various 0day vulnerabilities.

“In some cases, it is possible to exchange your 0day with my existing 0day, or sell mine,” his Russian-language profile reads.

PARTIAL PATCH

KrebsOnSecurity first contacted Zyxel on Feb. 12, sharing a copy of the exploit code and description of the vulnerability. When four days elapsed without any response from the vendor to notifications sent via multiple methods, this author shared the same information with vulnerability analysts at the U.S. Department of Homeland Security (DHS) and with the CERT Coordination Center (CERT/CC), a partnership between DHS and Carnegie Mellon University.

Less than 24 hours after contacting DHS and CERT/CC, KrebsOnSecurity heard back from Zyxel, which thanked KrebsOnSecurity for the alert without acknowledging its failure to respond until they were sent the same information by others.

“Thanks for flagging,” Zyxel’s team wrote on Feb. 17. “We’ve just received an alert of the same vulnerabilities from US-CERT over the weekend, and we’re now in the process of investigating. Still, we heartily appreciate you bringing it to our attention.”

Earlier today, Zyxel sent a message saying it had published a security advisory and patch for the zero-day exploit in some of its affected products. The vulnerable devices include NAS542, NAS540, NAS520, NAS326, NSA325 v2, NSA325, NSA320S, NSA320, NSA310S, NSA310, NSA221, NSA220+, NSA220, and NSA210. The flaw is designated as CVE-2020-9054.

However, many of these devices are no longer supported by Zyxel and will not be patched. Zyxel’s advice for those users is simply “do not leave the product directly exposed to the internet.”

“If possible, connect it to a security router or firewall for additional protection,” the advisory reads.

Holden said given the simplicity of the exploit — which allows an attacker to seize remote control over an affected device by injecting just two characters to the username field of the login panel for Zyxel NAS devices — it’s likely other Zyxel products may have related vulnerabilities.

“Considering how stupid this exploit is, I’m guessing this is not the only one of its class in their products,” he said.

CERT’s advisory on the flaw rates it at a “10” — its most severe. The advisory includes additional mitigation instructions, including a proof-of-concept exploit that has the ability to power down affected Zyxel devices.

EMOTET GOES IOT?

Holden said recent activity suggests that attackers known for deploying ransomware have been actively working to test the zero-day for use against targets. Specifically, Holden said the exploit is now being used by a group of bad guys who are seeking to fold the exploit into Emotet, a powerful malware tool typically disseminated via spam that is frequently used to seed a target with malcode which holds the victim’s files for ransom.

Holden said 500mhz was offering the Zyxel exploit for $20,000 on cybercrime forums, although it’s not clear whether the Emotet gang paid anywhere near that amount for access to the code. Still, he said, ransomware gangs could easily earn back their investment by successfully compromising a single target with this simple but highly reliable exploit.

“From the attacker’s standpoint simple is better,” he said. “The commercial value of this exploit was set at $20,000, but that’s not much when you consider a ransomware gang could easily make that money back and then some in a short period of time.”

Emotet’s nascent forays into IoT come amid other disturbing developments for the prolific exploitation platform. Earlier this month, security researchers noted that Emotet now has the capability to spread in a worm-like fashion via Wi-Fi networks.

“To me, a 0day exploit in Zyxel is not as scary as who bought it,” he said. “The Emotet guys have been historically targeting PCs, laptops and servers, but their venture now into IoT devices is very disturbing.”

DISCLOSURE DEBATE

This experience was a good reminder that vulnerability reporting and remediation often can be a frustrating process. Twelve days turnaround is fairly quick as these things go, although probably not quick enough for customers using products affected by zero-day vulnerabilities.

It can be tempting when one is not getting any response from a vendor to simply publish an alert detailing one’s findings, and the pressure to do so certainly increases when there is a zero-day flaw involved. KrebsOnSecurity ultimately opted not to do that for three reasons.

Firstly, at the time there was no evidence that the flaws were being actively exploited, and because the vendor had assured DHS and CERT-CC that it would soon have a patch available.

Perhaps most importantly, public disclosure of an unpatched flaw could well have made a bad situation worse, without offering affected users much in the way of information about how to protect their systems.

Many hardware and software vendors include a link from their home pages to /security.txt, which is a proposed standard for allowing security researchers to quickly identify the points of contact at vendors when seeking to report security vulnerabilities. But even vendors who haven’t yet adopted this standard (Zyxel has not) usually will respond to reports at security@[vendordomainhere]; indeed, Zyxel encourages researchers to forward any such reports to security@zyxel.com.tw.

On the subject of full disclosure, I should note that while this author is listed by Hold Security’s site as an advisor, KrebsOnSecurity has never sought nor received remuneration of any kind in connection with this role.

Networking software giant Citrix Systems says malicious hackers were inside its networks for five months between 2018 and 2019, making off with personal and financial data on company employees, contractors, interns, job candidates and their dependents. The disclosure comes almost a year after Citrix acknowledged that digital intruders had broken in by probing its employee accounts for weak passwords.

Citrix provides software used by hundreds of thousands of clients worldwide, including most of the Fortune 100 companies. It is perhaps best known for selling virtual private networking (VPN) software that lets users remotely access networks and computers over an encrypted connection.

In March 2019, the Federal Bureau of Investigation (FBI) alerted Citrix they had reason to believe cybercriminals had gained access to the company’s internal network. The FBI told Citrix the hackers likely got in using a technique called “password spraying,” a relatively crude but remarkably effective attack that attempts to access a large number of employee accounts (usernames/email addresses) using just a handful of common passwords.

In a statement released at the time, Citrix said it appeared hackers “may have accessed and downloaded business documents,” and that it was still working to identify what precisely was accessed or stolen.

But in a letter sent to affected individuals dated Feb. 10, 2020, Citrix disclosed additional details about the incident. According to the letter, the attackers “had intermittent access” to Citrix’s internal network between Oct. 13, 2018 and Mar. 8, 2019, and that there was no evidence that the cybercrooks still remain in the company’s systems.

Citrix said the information taken by the intruders may have included Social Security Numbers or other tax identification numbers, driver’s license numbers, passport numbers, financial account numbers, payment card numbers, and/or limited health claims information, such as health insurance participant identification number and/or claims information relating to date of service and provider name.

It is unclear how many people received this letter, but the communication suggests Citrix is contacting a broad range of individuals who work or worked for the company at some point, as well as those who applied for jobs or internships there and people who may have received health or other benefits from the company by virtue of having a family member employed by the company.

Citrix’s letter was prompted by laws in virtually all U.S. states that require companies to notify affected consumers of any incident that jeopardizes their personal and financial data. While the notification does not specify whether the attackers stole proprietary data about the company’s software and internal operations, the intruders certainly had ample opportunity to access at least some of that information as well.

Shortly after Citrix initially disclosed the intrusion in March 2019, a little-known security company Resecurity claimed it had evidence Iranian hackers were responsible, had been in Citrix’s network for years, and had offloaded terabytes of data. Resecurity also presented evidence that it notified Citrix of the breach as early as Dec. 28, 2018, a claim Citrix initially denied but later acknowledged.

Iranian hackers recently have been blamed for hacking VPN servers around the world in a bid to plant backdoors in large corporate networks. A report released this week (PDF) by security firm ClearSky details how Iran’s government-backed hacking units have been busy exploiting security holes in popular VPN products from Citrix and a number of other software firms.

ClearSky says the attackers have focused on attacking VPN tools because they provide a long-lasting foothold at the targeted organizations, and frequently open the door to breaching additional companies through supply-chain attacks. The company says such tactics have allowed the Iranian hackers to gain persistent access to the networks of companies across a broad range of sectors, including IT, security, telecommunications, oil and gas, aviation, and government.

Among the VPN flaws available to attackers is a recently-patched vulnerability (CVE-2019-19781) in Citrix VPN servers dubbed “Shitrix” by some in the security community. The derisive nickname may have been chosen because while Citrix initially warned customers about the vulnerability in mid-December 2019, it didn’t start releasing patches to plug the holes until late January 2020 — roughly two weeks after attackers started using publicly released exploit code to break into vulnerable organizations.

How would your organization hold up to a password spraying attack? As the Citrix hack shows, if you don’t know you should probably check, and then act on the results accordingly. It’s a fair bet the bad guys are going to find out even if you don’t.

Crooks are constantly dreaming up new ways to use and conceal stolen credit card data. According to the U.S. Secret Service, the latest scheme involves stolen card information embedded in barcodes affixed to phony money network rewards cards. The scammers then pay for merchandise by instructing a cashier to scan the barcode and enter the expiration date and card security code.

Earlier this month, the Secret Service documented a recent fraud incident in Texas involving a counterfeit club membership card containing a barcode, and a card expiration date and CVV printed below the barcode.

“Located underneath the barcode are instructions to the cashier on the steps necessary to complete the transaction,” reads an alert the Secret Service sent to law enforcement agencies. “They instruct the cashier to select card payment, scan the barcode, then enter the expiration date and CVV. In this instance, the barcode was encoded with a VISA credit card number.”

The instructions on the phony rewards card are designed to make the cashier think it’s a payment alternative designed for use exclusively at Sam’s Club and WalMart stores. When the transaction goes through, it’s recorded as card-not-present purchase.

“This appears to be an evolution of the traditional card-not-present fraud, and early indications are linking this type of activity to criminal organizations of Asian descent,” the Secret Service memo observed.

“As a result of this emerging trend, instead of finding a large number of re-encoded credit cards during a search, a subject may only possess stickers or cards with barcodes that contain stolen card data,” the alert continues. “Additionally, the barcodes could be stored on the subject’s cell phone. If barcodes are discovered in the field, it could be beneficial to utilize a barcode scanning app to check the barcode for credit card data.”