Category Archives: Gemini Advisory

Alexander Kovalev, Artem Bystrykh, Denis Pachevsky, Department K, Ferum Shop, Flashpoint, Gemini Advisory, Get-Net LLC, Infraud, Ne'er-Do-Well News, Saratovfilm Film Company LLC, Sky-Fraud, Stas Alforov, TASS, Transtekhkom LLC, Trump's-Dumps, Unicc, Vladislav Gilev, Web Fraud 2.0, Yaroslav Solovyov

Russian Govt. Continues Carding Shop Crackdown

Russian authorities have arrested six men accused of operating some of the most active online bazaars for selling stolen payment card data. The crackdown — the second closure of major card fraud shops by Russian authorities in as many weeks — comes closely behind Russia’s arrest of 14 alleged affiliates of the REvil ransomware gang, and has many in the cybercrime underground asking who might be next.

Dept. K’s message for Trump’s Dumps users.

On Feb. 7 and 8, the domains for the carding shops Trump’s Dumps, Ferum Shop, Sky-Fraud and UAS were seized by Department K, a division of the Ministry of Internal Affairs of the Russian Federation that focuses on computer crimes. The websites for the carding stores were retrofitted with a message from Dept. K asking, “Which one of you is next?”

According to cyber intelligence analysts at Flashpoint, that same message was included in the website for UniCC, another major and venerated carding shop that was seized by Dept. K in January.

Around the same time Trump’s Dumps and the other three shops began displaying the Dept. K message, the Russian state-owned news outlet TASS moved a story naming six Russian men who were being charged with “the illegal circulation of means of payment.”

TASS reports the six detained include Denis Pachevsky, general director of Saratovfilm Film Company LLC; Alexander Kovalev, an individual entrepreneur; Artem Bystrykh, an employee of Transtekhkom LLC; Artem Zaitsev; an employee of Get-net LLC; and two unemployed workers, Vladislav Gilev and Yaroslav Solovyov.

None of the stories about the arrests tie the men to the four carding sites. But Flashpoint found that all of the domains seized by Dept. K. were registered and hosted through Zaitsev’s company — Get-net LLC.

“All four sites frequently advertised one another, which is generally atypical for two card marketplaces competing in the same space,” Flashpoint analysts wrote.

Stas Alforov is director of research for Gemini Advisory, a New York firm that monitors underground cybercrime markets. Alforov said it is most unusual for the Russians to go after carding sites that aren’t selling data stolen from Russian citizens.

“It’s not in their business to be taking down Russian card shops,” Alforov said. “Unless those shops were somehow selling data on Russian cardholders, which they weren’t.”

A carding shop that sold stolen credit cards and invoked 45’s likeness and name was among those taken down this week by Russian authorities.

Debuting in 2011, Ferum Shop is one of the oldest observed dark web marketplaces selling “card not present” data (customer payment records stolen from hacked online merchants), according to Gemini.

“Every year for the last 5 years, the marketplace has been a top 5 source of card not present records in terms of records posted for sale,” Gemini found. “In this time period, roughly 66% of Ferum Shop’s records have been from United States financial institutions. The remaining 34% have come from over 200 countries.”

In contrast, Trump’s Dumps focuses on selling card data stolen from hacked point-of-sale devices, and it benefited greatly from the January 2021 retirement of Joker’s Stash, which for years dwarfed most other carding shops by volume. Gemini found Trump’s Dumps gained roughly 40 percent market share after Joker’s closure, and that more than 87 percent of the payment card records it sells are from U.S. financial institutions.

“In the past 5 years, Ferum Shop and Trump’s Dumps have cumulatively added over 64 million compromised payment cards,” Alforov wrote. “Based on average demand for CP and CNP records and the median price of $10, the total revenue from these sales is estimated to be over $430 million. Due to the 20 to 30% commission that shops generally receive, the administrators of Ferum Shop and Trump’s Dumps likely generated between $86 and $129 million in profits from these card sales.”

The arrests of the six men comes less than two weeks after Russian law enforcement officials detained four suspected carders — including Andrey Sergeevich Novak, the reputed owner of the extremely popular and long-running UniCC carding shop.

In 2018, the U.S. Justice Department charged Novak and three dozen other defendants thought to be key members of “Infraud,” a long-running cybercrime forum that prosecutors say cost merchants and consumers more than half a billion dollars.

Unicc shop, which sold stolen credit card data as well as Social Security numbers and other consumer information that can be used for identity theft. It was seized by Dept. K in January 2020.

Flashpoint said the recent arrests represent the first major actions against Russia-based cybercriminals since March 2020, when the FSB detained more than thirty members of an illicit carding operation, charging twenty-five of them with “illegal circulation of means of payment.”

Dumps, or card data stolen from compromised point-of-sale devices, have been declining in popularity among fraudsters for years as more financial institutions have issued more secure chip-based cards. In contrast, card-not-present data stolen from online stores continues to be in high demand, because it helps facilitate fraud at online retailers. Gemini says the supply of card-not-present data rose by 50 percent in 2021 versus 2020, fed largely by the success of Magecart e-skimmers that target vulnerabilities in e-commerce sites.

Alforov says while the carding shop closures are curiously timed, he doubts the supply of stolen card data is going to somehow shrink as a result. Rather, he said, some of the lower-tier card shops that were previously just resellers working with Trump’s Dumps and others are now suddenly ramping up inventory with their own new suppliers — very likely thanks to the same crooks who were selling cards to the six men arrested this week in Russia.

“What we’re seeing now is a lot of those reseller shops are coming to the market and saying, ‘We don’t have that order data we were getting from Ferum Shop but now have our own vendors,'” Alforov said. “Some of the lesser tier shops are starting to move up the food chain.”

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ParkMobile Breach Exposes License Plate Data, Mobile Numbers of 21M Users

Someone is selling account information for 21 million customers of ParkMobile, a mobile parking app that’s popular in North America. The stolen data includes customer email addresses, dates of birth, phone numbers, license plate numbers, hashed passwords and mailing addresses.

KrebsOnSecurity first heard about the breach from Gemini Advisory, a New York City based threat intelligence firm that keeps a close eye on the cybercrime forums. Gemini shared a new sales thread on a Russian-language crime forum that included my ParkMobile account information in the accompanying screenshot of the stolen data.

Included in the data were my email address and phone number, as well as license plate numbers for four different vehicles we have used over the past decade.

Asked about the sales thread, Atlanta-based ParkMobile said the company published a notification on Mar. 26 about “a cybersecurity incident linked to a vulnerability in a third-party software that we use.”

“In response, we immediately launched an investigation with the assistance of a leading cybersecurity firm to address the incident,” the notice reads. “Out of an abundance of caution, we have also notified the appropriate law enforcement authorities. The investigation is ongoing, and we are limited in the details we can provide at this time.”

The statement continues: “Our investigation indicates that no sensitive data or Payment Card Information, which we encrypt, was affected. Meanwhile, we have taken additional precautionary steps since learning of the incident, including eliminating the third-party vulnerability, maintaining our security, and continuing to monitor our systems.”

Asked for clarification on what the attackers did access, ParkMobile confirmed it included basic account information – license plate numbers, and if provided, email addresses and/or phone numbers, and vehicle nickname.

“In a small percentage of cases, there may be mailing addresses,” spokesman Jeff Perkins said.

ParkMobile doesn’t store user passwords, but rather it stores the output of a fairly robust one-way password hashing algorithm called bcrypt, which is far more resource-intensive and expensive to crack than common alternatives like MD5. The database stolen from ParkMobile and put up for sale includes each user’s bcrypt hash.

“You are correct that bcrypt hashed and salted passwords were obtained,” Perkins said when asked about the screenshot in the database sales thread.

“Note, we do not keep the salt values in our system,” he said. “Additionally, the compromised data does not include parking history, location history, or any other sensitive information. We do not collect social security numbers or driver’s license numbers from our users.”

ParkMobile says it is finalizing an update to its support site confirming the conclusion of its investigation. But I wonder how many of its users were even aware of this security incident. The Mar. 26 security notice does not appear to be linked to other portions of the ParkMobile site, and it is absent from the company’s list of recent press releases.

It’s also curious that ParkMobile hasn’t asked or forced its users to change their passwords as a precautionary measure. I used the ParkMobile app to reset my password, but there was no messaging in the app that suggested this was a timely thing to do.

So if you’re a ParkMobile user, changing your account password might be a pro move. If it’s any consolation, whoever is selling this data is doing so for an insanely high starting price ($125,000) that is unlikely to be paid by any cybercriminal to a new user with no reputation on the forum.

More importantly, if you used your ParkMobile password at any other site tied to the same email address, it’s time to change those credentials as well (and stop re-using passwords).

The breach comes at a tricky time for ParkMobile. On March 9, the European parking group EasyPark announced its plans to acquire the company, which operates in more than 450 cities in North America.

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‘ValidCC,’ a Major Payment Card Bazaar and Looter of E-Commerce Sites, Shuttered

ValidCC, a dark web bazaar run by a cybercrime group that for more than six years hacked online merchants and sold stolen payment card data, abruptly closed up shop last week. The proprietors of the popular store said their servers were seized as part of a coordinated law enforcement operation designed to disconnect and confiscate its infrastructure.

ValidCC, circa 2017.

There are dozens of online shops that sell so-called “card not present” (CNP) payment card data stolen from e-commerce stores, but most source the data from other criminals. In contrast, researchers say ValidCC was actively involved in hacking and pillaging hundreds of online merchants — seeding the sites with hidden card-skimming code that siphoned personal and financial information as customers went through the checkout process.

Russian cybersecurity firm Group-IB published a report last year detailing the activities of ValidCC, noting the gang behind the crime shop was responsible for plundering nearly 700 e-commerce sites. Group-IB dubbed the gang “UltraRank,” which it said had additionally compromised at least 13 third-party suppliers whose software components are used by countless online stores across Europe, Asia, North and Latin America.

Group-IB believes UltraRank is responsible for a slew of hacks that other security firms previously attributed to at least three distinct cybercrime groups.

“Over five years….UltraRank changed its infrastructure and malicious code on numerous occasions, as a result of which cybersecurity experts would wrongly attribute its attacks to other threat actors,” Group-IB wrote. “UltraRank combined attacks on single targets with supply chain attacks.”

ValidCC’s front man on multiple forums — a cybercriminal who uses the hacker handle “SPR” — told customers on Jan. 28 that the shop would close for good following what appeared to be a law enforcement takedown of its operations. SPR claims his site lost access to a significant inventory — more than 600,000 unsold stolen payment card accounts.

“As a result, we lost the proxy and destination backup servers,” SPR explained. “Besides, now it’s impossible to open and decrypt the backend. The database is in the hands of the police, but it’s encrypted.”

ValidCC had thousands of users, some of whom held significant balances of bitcoin stored in the shop when it ceased operations. SPR claims the site took in approximately $100,000 worth of virtual currency deposits each day from customers.

Many of those customers took to the various crime forums where the shop has a presence to voice suspicions that the proprietors had simply decided to walk away with their money at a time when Bitcoin was near record-high price levels.

SPR countered that ValidCC couldn’t return balances because it no longer had access to its own ledgers.

“We don’t know anything!,” SPR pleaded. “We don’t know users’ balances, or your account logins or passwords, or the [credit cards] you purchased, or anything else! You are free to think what you want, but our team has never conned or let anyone down since the beginning of our operations! Nobody would abandon a dairy cow and let it die in the field! We did not take this decision lightly!”

Group-IB said ValidCC was one of many cybercrime shops that stored some or all of its operational components at Media Land LLC, a major “bulletproof hosting” provider that supports a vast array of phishing sites, cybercrime forums and malware download servers.

Assuming SPR’s claims are truthful, it could be that law enforcement agencies targeted portions of Media Land’s digital infrastructure in some sort of coordinated action. However, so far there are no signs of any major uproar in the cybercrime underground directed at Yalishanda, the nickname used by the longtime proprietor of Media Land.

ValidCC’s demise comes close on the heels of the shuttering of Joker’s Stash, by some accounts the largest underground shop for selling stolen credit card and identity data. On Dec. 16, 2020, several of Joker’s long-held domains began displaying notices that the sites had been seized by the U.S. Department of Justice and Interpol. Less than a month later, Joker announced he was closing the shop permanently.

And last week, authorities across Europe seized control over dozens of servers used to operate Emotet, a prolific malware strain and cybercrime-as-service operation. While there are no indications that action targeted any criminal groups apart from the Emotet gang, it is often the case that multiple cybercrime groups will share the same dodgy digital infrastructure providers, knowingly or unwittingly.

Gemini Advisory, a New York-based firm that closely monitors cybercriminal stores, said ValidCC’s administrators recently began recruiting stolen card data resellers who previously had sold their wares to Joker’s Stash.

Stas Alforov, Gemini’s director of research and development, said other card shops will quickly move in to capture the customers and suppliers who frequented ValidCC.

“There are still a bunch of other shops out there,” Alforov said. “There’s enough tier one shops out there that sell card-not-present data that haven’t dropped a beat and have even picked up volumes.”

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Joker’s Stash Carding Market to Call it Quits

Joker’s Stash, by some accounts the largest underground shop for selling stolen credit card and identity data, says it’s closing up shop effective mid-February 2021. The announcement came on the heels of a turbulent year for the major cybercrime store, and just weeks after U.S. and European authorities seized a number of its servers.

A farewell message posted by Joker’s Stash admin on Jan. 15, 2021.

The Russian and English language carding store first opened in October 2014, and quickly became a major source of “dumps” — information stolen from compromised payment cards that thieves can buy and use to create physical counterfeit copies of the cards.

But 2020 turned out to be a tough year for Joker’s Stash. As cyber intelligence firm Intel 471 notes, the curator of the store announced in October that he’d contracted COVID-19, spending a week in the hospital. Around that time, Intel 471 says many of Joker’s loyal customers started complaining that the shop’s payment card data quality was increasingly poor.

“The condition impacted the site’s forums, inventory replenishments and other operations,” Intel 471 said.

Image: Gemini Advisory

That COVID diagnosis may have affected the shop owner’s ability to maintain fresh and valid inventory on his site. Gemini Advisory, a New York City-based company that monitors underground carding shops, tracked a “severe decline” in the volume of compromised payment card accounts for sale on Joker’s Stash over the past six months.

“Joker’s Stash has received numerous user complaints alleging that card data validity is low, which even prompted the administrator to upload proof of validity through a card-testing service,” Gemini wrote in a blog post about the planned shutdown.

Image: Gemini Advisory

Then on Dec. 16, 2020, several of Joker’s long-held domains began displaying notices that the sites had been seized by the U.S. Department of Justice and Interpol. The crime shop quickly recovered, moving to new infrastructure and assuring the underground community that it would continue to operate normally.

Gemini estimates that Joker’s Stash generated more than a billion dollars in revenue over the past several years. Much of that revenue came from high-profile breaches, including tens of millions of payment card records stolen from major merchants including Saks Fifth Avenue, Lord and Taylor, Bebe Stores, Hilton Hotels, Jason’s Deli, Whole Foods, Chipotle, Wawa, Sonic Drive-In, the Hy-Vee supermarket chain, Buca Di Beppo, and Dickey’s BBQ.

Joker’s Stash routinely teased big breaches days or weeks in advance of selling payment card records stolen from those companies, and periodically linked to this site and other media outlets as proof of his shop’s prowess and authenticity.

Like many other top cybercrime bazaars, Joker’s Stash was a frequent target of phishers looking to rip off unwary or unsophisticated thieves. In 2018, KrebsOnSecurity detailed a vast network of fake Joker’s Stash sites set up to steal login credentials and bitcoin. The phony sites all traced back to the owners of a Pakistani web site design firm. Many of those fake sites are still active (e.g. jokersstash[.]su).

As noted here in 2016, Joker’s Stash attracted an impressive number of customers who kept five and six-digit balances at the shop, and who were granted early access to new breaches as well as steep discounts for bulk buys. Those “partner” customers will be given the opportunity to cash out their accounts. But the majority of Stash customers do not enjoy this status, and will have to spend their balances by Feb. 15 or forfeit those funds.

The dashboard for a Joker’s Stash customer who’s spent over $10,000 buying stolen credit cards from the site.

Gemini said another event that may have contributed to this threat actor shutting down their marketplace is the recent spike in the value of Bitcoin. A year ago, one bitcoin was worth about $9,000. Today a single bitcoin is valued at more than $35,000.

“JokerStash was an early advocate of Bitcoin and claims to keep all proceeds in this cryptocurrency,” Gemini observed in a blog post. “This actor was already likely to be among the wealthiest cybercriminals, and the spike may have multiplied their fortune, earning them enough money to retire. However, the true reason behind this shutdown remains unclear.”

If the bitcoin price theory holds, that would be fairly rich considering the parting lines in the closure notice posted to Joker’s Stash.

“We are also want to wish all young and mature ones cyber-gangsters not to lose themselves in the pursuit of easy money,” the site administrator(s) advised. “Remember, that even all the money in the world will never make you happy and that all the most truly valuable things in this life are free.”

Regardless, the impending shutdown is unlikely to have much of an impact on the overall underground carding industry, Gemini notes.

“Given Joker’s Stash’s high profile, it relied on a robust network of criminal vendors who offered their stolen records on this marketplace, among others,” the company wrote. “Gemini assesses with a high level of confidence that these vendors are very likely to fully transition to other large, top-tier dark web marketplaces.”

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Breach at Dickey’s BBQ Smokes 3M Cards

One of the digital underground’s most popular stores for peddling stolen credit card information began selling a batch of more than three million new card records this week. KrebsOnSecurity has learned the data was stolen in a lengthy data breach at more than 100 Dickey’s Barbeque Restaurant locations around the country.

An ad on the popular carding site Joker’s Stash for “BlazingSun,” which fraud experts have traced back to a card breach at Dickey’s BBQ.

On Monday, the carding bazaar Joker’s Stash debuted “BlazingSun,” a new batch of more than three million stolen card records, advertising “valid rates” of between 90-100 percent. This is typically an indicator that the breached merchant is either unaware of the compromise or has only just begun responding to it.

Multiple companies that track the sale in stolen payment card data say they have confirmed with card-issuing financial institutions that the accounts for sale in the BlazingSun batch have one common theme: All were used at various Dickey’s BBQ locations over the past 13-15 months.

KrebsOnSecurity first contacted Dallas-based Dickey’s on Oct. 13. Today, the company shared a statement saying it was aware of a possible payment card security incident at some of its eateries:

“We received a report indicating that a payment card security incident may have occurred. We are taking this incident very seriously and immediately initiated our response protocol and an investigation is underway. We are currently focused on determining the locations affected and time frames involved. We are utilizing the experience of third parties who have helped other restaurants address similar issues and also working with the FBI and payment card networks. We understand that payment card network rules generally provide that individuals who timely report unauthorized charges to the bank that issued their card are not responsible for those charges.”

The confirmations came from Miami-based Q6 Cyber and Gemini Advisory in New York City.

Q6Cyber CEO Eli Dominitz said the breach appears to extend from May 2019 through September 2020.

“The financial institutions we’ve been working with have already seen a significant amount of fraud related to these cards,” Dominitz said.

Gemini says its data indicated some 156 Dickey’s locations across 30 states likely had payment systems compromised by card-stealing malware, with the highest exposure in California and Arizona. Gemini puts the exposure window between July 2019 and August 2020.

“Low-and-slow” aptly describes the card breach at Dickie’s, which persisted for at least 13 months.

With the threat from ransomware attacks grabbing all the headlines, it may be tempting to assume plain old credit card thieves have moved on to more lucrative endeavors. Alas, cybercrime bazaars like Joker’s Stash have continued plying their trade, undeterred by a push from the credit card associations to encourage more merchants to install credit card readers that require more secure chip-based payment cards.

That’s because there are countless restaurant locations — usually franchise locations of an established eatery chain — that are left to decide for themselves whether and how quickly they should make the upgrades necessary to dip the chip versus swipe the stripe.

“Dickey’s operates on a franchise model, which often allows each location to dictate the type of point-of-sale (POS) device and processors that they utilize,” Gemini wrote in a blog post about the incident. “However, given the widespread nature of the breach, the exposure may be linked to a breach of the single central processor, which was leveraged by over a quarter of all Dickey’s locations.”

While there have been sporadic reports about criminals compromising chip-based payment systems used by merchants in the U.S., the vast majority of the payment card data for sale in the cybercrime underground is stolen from merchants who are still swiping chip-based cards.

This isn’t conjecture; relatively recent data from the stolen card shops themselves bear this out. In July, KrebsOnSecurity wrote about an analysis by researchers at New York University, which looked at patterns surrounding more than 19 million stolen payment cards that were exposed after the hacking of BriansClub, a top competitor to the Joker’s Stash carding shop.

The NYU researchers found BriansClub earned close to $104 million in gross revenue from 2015 to early 2019, and listed over 19 million unique card numbers for sale. Around 97% of the inventory was stolen magnetic stripe data, commonly used to produce counterfeit cards for in-person payments.

Visa and MasterCard instituted new rules in October 2015 that put retailers on the hook for all of the losses associated with counterfeit card fraud tied to breaches if they haven’t implemented chip-based card readers and enforced the dipping of the chip when a customer presents a chip-based card.

Dominitz said he never imagined back in 2015 when he founded Q6Cyber that we would still be seeing so many merchants dealing with magstripe-based data breaches.

“Five years ago I did not expect we would be in this position today with card fraud,” he said. “You’d think the industry in general would have made a bigger dent in this underground economy a while ago.”

Tired of having your credit card re-issued and updating your payment records at countless e-commerce sites every time some restaurant you frequent has a breach? Here’s a radical idea: Next time you visit an eatery (okay, if that ever happens again post-COVID, etc), ask them if they use chip-based card readers. If not, consider taking your business elsewhere.

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Is Your Chip Card Secure? Much Depends on Where You Bank

Chip-based credit and debit cards are designed to make it infeasible for skimming devices or malware to clone your card when you pay for something by dipping the chip instead of swiping the stripe. But a recent series of malware attacks on U.S.-based merchants suggest thieves are exploiting weaknesses in how certain financial institutions have implemented the technology to sidestep key chip card security features and effectively create usable, counterfeit cards.

A chip-based credit card. Image: Wikipedia.

Traditional payment cards encode cardholder account data in plain text on a magnetic stripe, which can be read and recorded by skimming devices or malicious software surreptitiously installed in payment terminals. That data can then be encoded onto anything else with a magnetic stripe and used to place fraudulent transactions.

Newer, chip-based cards employ a technology known as EMV that encrypts the account data stored in the chip. The technology causes a unique encryption key — referred to as a token or “cryptogram” — to be generated each time the chip card interacts with a chip-capable payment terminal.

Virtually all chip-based cards still have much of the same data that’s stored in the chip encoded on a magnetic stripe on the back of the card. This is largely for reasons of backward compatibility since many merchants — particularly those in the United States — still have not fully implemented chip card readers. This dual functionality also allows cardholders to swipe the stripe if for some reason the card’s chip or a merchant’s EMV-enabled terminal has malfunctioned.

But there are important differences between the cardholder data stored on EMV chips versus magnetic stripes. One of those is a component in the chip known as an integrated circuit card verification value or “iCVV” for short — also known as a “dynamic CVV.”

The iCVV differs from the card verification value (CVV) stored on the physical magnetic stripe, and protects against the copying of magnetic-stripe data from the chip and the use of that data to create counterfeit magnetic stripe cards. Both the iCVV and CVV values are unrelated to the three-digit security code that is visibly printed on the back of a card, which is used mainly for e-commerce transactions or for card verification over the phone.

The appeal of the EMV approach is that even if a skimmer or malware manages to intercept the transaction information when a chip card is dipped, the data is only valid for that one transaction and should not allow thieves to conduct fraudulent payments with it going forward.

However, for EMV’s security protections to work, the back-end systems deployed by card-issuing financial institutions are supposed to check that when a chip card is dipped into a chip reader, only the iCVV is presented; and conversely, that only the CVV is presented when the card is swiped. If somehow these do not align for a given transaction type, the financial institution is supposed to decline the transaction.

The trouble is that not all financial institutions have properly set up their systems this way. Unsurprisingly, thieves have known about this weakness for years. In 2017, I wrote about the increasing prevalence of “shimmers,” high-tech card skimming devices made to intercept data from chip card transactions.

A close-up of a shimmer found on a Canadian ATM. Source: RCMP.

More recently, researchers at Cyber R&D Labs published a paper detailing how they tested 11 chip card implementations from 10 different banks in Europe and the U.S. The researchers found they could harvest data from four of them and create cloned magnetic stripe cards that were successfully used to place transactions.

There are now strong indications the same method detailed by Cyber R&D Labs is being used by point-of-sale (POS) malware to capture EMV transaction data that can then be resold and used to fabricate magnetic stripe copies of chip-based cards.

Earlier this month, the world’s largest payment card network Visa released a security alert regarding a recent merchant compromise in which known POS malware families were apparently modified to target EMV chip-enabled POS terminals.

“The implementation of secure acceptance technology, such as EMV® Chip, significantly reduced the usability of the payment account data by threat actors as the available data only included personal account number (PAN), integrated circuit card verification value (iCVV) and expiration date,” Visa wrote. “Thus, provided iCVV is validated properly, the risk of counterfeit fraud was minimal. Additionally, many of the merchant locations employed point-to-point encryption (P2PE) which encrypted the PAN data and further reduced the risk to the payment accounts processed as EMV® Chip.”

Visa did not name the merchant in question, but something similar seems to have happened at Key Food Stores Co-Operative Inc., a supermarket chain in the northeastern United States. Key Food initially disclosed a card breach in March 2020, but two weeks ago updated its advisory to clarify that EMV transaction data also was intercepted.

“The POS devices at the store locations involved were EMV enabled,” Key Foods explained. “For EMV transactions at these locations, we believe only the card number and expiration date would have been found by the malware (but not the cardholder name or internal verification code).”

While Key Food’s statement may be technically accurate, it glosses over the reality that the stolen EMV data could still be used by fraudsters to create magnetic stripe versions of EMV cards presented at the compromised store registers in cases where the card-issuing bank hadn’t implemented EMV correctly.

Earlier today, fraud intelligence firm Gemini Advisory released a blog post with more information on recent merchant compromises — including Key Food — in which EMV transaction data was stolen and ended up for sale in underground shops that cater to card thieves.

“The payment cards stolen during this breach were offered for sale in the dark web,” Gemini explained. “Shortly after discovering this breach, several financial institutions confirmed that the cards compromised in this breach were all processed as EMV and did not rely on the magstripe as a fallback.”

Gemini says it has verified that another recent breach — at a liquor store in Georgia — also resulted in compromised EMV transaction data showing up for sale at dark web stores that sell stolen card data. As both Gemini and Visa have noted, in both cases proper iCVV verification from banks should render this intercepted EMV data useless to crooks.

Gemini determined that due to the sheer number of stores affected, it’s extremely unlikely the thieves involved in these breaches intercepted the EMV data using physically installed EMV card shimmers.

“Given the extreme impracticality of this tactic, they likely used a different technique to remotely breach POS systems to collect enough EMV data to perform EMV-Bypass Cloning,” the company wrote.

Stas Alforov, Gemini’s director of research and development, said financial institutions that aren’t performing these checks risk losing the ability to notice when those cards are used for fraud.

That’s because many banks that have issued chip-based cards may assume that as long as those cards are used for chip transactions, there is virtually no risk that the cards will be cloned and sold in the underground. Hence, when these institutions are looking for patterns in fraudulent transactions to determine which merchants might be compromised by POS malware, they may completely discount any chip-based payments and focus only on those merchants at which a customer has swiped their card.

“The card networks are catching on to the fact that there’s a lot more EMV-based breaches happening right now,” Alforov said. “The larger card issuers like Chase or Bank of America are indeed checking [for a mismatch between the iCVV and CVV], and will kick back transactions that don’t match. But that is clearly not the case with some smaller institutions.”

For better or worse, we don’t know which financial institutions have failed to properly implement the EMV standard. That’s why it always pays to keep a close eye on your monthly statements, and report any unauthorized transactions immediately. If your institution lets you receive transaction alerts via text message, this can be a near real-time way to keep an eye out for such activity.

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COVID-19 ‘Breach Bubble’ Waiting to Pop?

The COVID-19 pandemic has made it harder for banks to trace the source of payment card data stolen from smaller, hacked online merchants. On the plus side, months of quarantine have massively decreased demand for account information that thieves buy and use to create physical counterfeit credit cards. But fraud experts say recent developments suggest both trends are about to change — and likely for the worse.

The economic laws of supply and demand hold just as true in the business world as they do in the cybercrime space. Global lockdowns from COVID-19 have resulted in far fewer fraudsters willing or able to visit retail stores to use their counterfeit cards, and the decreased demand has severely depressed prices in the underground for purloined card data.

An ad for a site selling stolen payment card data, circa March 2020.

That’s according to Gemini Advisory, a New York-based cyber intelligence firm that closely tracks the inventories of dark web stores trafficking in stolen payment card data.

Stas Alforov, Gemini’s director of research and development, said that since the beginning of 2020 the company has seen a steep drop in demand for compromised “card present” data — digits stolen from hacked brick-and-mortar merchants with the help of malicious software surreptitiously installed on point-of-sale (POS) devices.

Alforov said the median price for card-present data has dropped precipitously over the past few months.

“Gemini Advisory has seen over 50 percent decrease in demand for compromised card present data since the mandated COVID-19 quarantines in the United States as well as the majority of the world,” he told KrebsOnSecurity.

Meanwhile, the supply of card-present data has remained relatively steady. Gemini’s latest find — a 10-month-long card breach at dozens of Chicken Express locations throughout Texas and other southern states that the company first publicly acknowledged today after being contacted by this author — saw an estimated 165,000 cards stolen from the fast-food chain recently go on sale at one of the dark web’s largest cybercrime bazaars.

“Card present data supply hasn’t wavered much during the COVID-19 period,” Alforov said. “This is likely due to the fact that most of the sold data is still coming from breaches that occurred in 2019 and early 2020.”

A lack of demand for and steady supply of stolen card-present data in the underground has severely depressed prices since the beginning of the COVID-19 pandemic. Image: Gemini Advisory

Naturally, crooks who ply their trade in credit card thievery also have been working from home more throughout the COVID-19 pandemic. That means demand for stolen “card-not-present” data — customer payment information extracted from hacked online merchants and typically used to defraud other e-commerce vendors — remains high. And so have prices for card-not-present data: Gemini found prices for this commodity actually increased slightly over the past few months.

Andrew Barratt is an investigator with Coalfire, the cyber forensics firm hired by Chicken Express to remediate the breach and help the company improve security going forward. Barratt said there’s another curious COVID-19 dynamic going on with e-commerce fraud recently that is making it more difficult for banks and card issuers to trace patterns in stolen card-not-present data back to hacked web merchants — particularly smaller e-commerce shops.

“One of the concerns that has been expressed to me is that we’re getting [fewer] overlapping hotspots,” Barratt said. “For a lot of the smaller, more frequently compromised merchants there has been a large drop off in transactions. Whilst big e-commerce has generally done okay during the COVID-19 pandemic, a number of more modest sized or specialty online retailers have not had the same access to their supply chain and so have had to close or drastically reduce the lines they’re selling.”

Banks routinely take groups of customer cards that have experienced fraudulent activity and try to see if some or all of them were used at the same merchant during a similar timeframe, a basic anti-fraud process known as “common point of purchase” or CPP analysis. But ironically, this analysis can become more challenging when there are fewer overall transactions going through a compromised merchant’s site, Barratt said.

“With a smaller transactional footprint means less Common Point of Purchase alerts and less data to work on to trigger a forensic investigation or fraud alert,” Barratt said. “It does also mean less fraud right now – which is a positive. But one of the big concerns that has been raised to us as investigators — literally asking if we have capacity for what’s coming — has been that merchants are getting compromised by ‘lie in wait’ type intruders.”

Barratt says there’s a suspicion that hackers may have established beachheads [breachheads?] in a number of these smaller online merchants and are simply biding their time. If and when transaction volumes for these merchants do pick up, the concern is then hackers may be in a better position to mix the sale of cards stolen from many hacked merchants and further confound CPP analysis efforts.

“These intruders may have a beachhead in a number of small and/or middle market e-commerce entities and they’re just waiting for the transaction volumes to go back up again and they’ve suddenly got the capability to have skimmers capturing lots of card data in the event of a sudden uptick in consumer spending,” he said. “They’d also have a diverse portfolio of compromise so could possibly even evade common point of purchase detection for a while too. Couple all of that with major shopping cart platforms going out of support (like Magento 1 this month) and furloughed IT and security staff, and there’s a potentially large COVID-19 breach bubble waiting to pop.”

With a majority of payment cards issued in the United States now equipped with a chip that makes the cards difficult and expensive for thieves to clone, cybercriminals have continued to focus on hacking smaller merchants that have not yet installed chip card readers and are still swiping the cards’ magnetic stripe at the register.

Barratt said his company has tied the source of the breach to malware known as “PwnPOS,” an ancient strain of point-of-sale malware that first surfaced more than seven years ago, if not earlier.

Chicken Express CEO Ricky Stuart told KrebsOnSecurity that apart from “a handful” of locations his family owns directly, most of his 250 stores are franchisees that decide on their own how to secure their payment operations. Nevertheless, the company is now forced to examine each store’s POS systems to remediate the breach.

Stuart blamed the major point-of-sale vendors for taking their time in supporting and validating chip-capable payment systems. But when asked how many of the company’s 250 stores had chip-capable readers installed, Stuart said he didn’t know. Ditto for the handful of stores he owns directly.

“I don’t know how many,” he said. “I would think it would be a majority. If not, I know they’re coming.”

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How Cybercriminals are Weathering COVID-19

In many ways, the COVID-19 pandemic has been a boon to cybercriminals: With unprecedented numbers of people working from home and anxious for news about the virus outbreak, it’s hard to imagine a more target-rich environment for phishers, scammers and malware purveyors. In addition, many crooks are finding the outbreak has helped them better market their cybercriminal wares and services. But it’s not all good news: The Coronavirus also has driven up costs and disrupted key supply lines for many cybercriminals. Here’s a look at how they’re adjusting to these new realities.

FUELED BY MULES

One of the more common and perennial cybercriminal schemes is “reshipping fraud,” wherein crooks buy pricey consumer goods online using stolen credit card data and then enlist others to help them collect or resell the merchandise.

Most online retailers years ago stopped shipping to regions of the world most frequently associated with credit card fraud, including Eastern Europe, North Africa, and Russia. These restrictions have created a burgeoning underground market for reshipping scams, which rely on willing or unwitting residents in the United States and Europe — derisively referred to as “reshipping mules” — to receive and relay high-dollar stolen goods to crooks living in the embargoed areas.

A screen shot from a user account at “Snowden,” a long-running reshipping mule service.

But apparently a number of criminal reshipping services are reporting difficulties due to the increased wait time when calling FedEx or UPS (to divert carded goods that merchants end up shipping to the cardholder’s address instead of to the mule’s). In response, these operations are raising their prices and warning of longer shipping times, which in turn could hamper the activities of other actors who depend on those services.

That’s according to Intel 471, a cyber intelligence company that closely monitors hundreds of online crime forums. In a report published today, the company said since late March 2020 it has observed several crooks complaining about COVID-19 interfering with the daily activities of their various money mules (people hired to help launder the proceeds of cybercrime).

“One Russian-speaking actor running a fraud network complained about their subordinates (“money mules”) in Italy, Spain and other countries being unable to withdraw funds, since they currently were afraid to leave their homes,” Intel 471 observed. “Also some actors have reported that banks’ customer-support lines are being overloaded, making it difficult for fraudsters to call them for social-engineering activities (such as changing account ownership, raising withdrawal limits, etc).”

Still, every dark cloud has a silver lining: Intel 471 noted many cybercriminals appear optimistic that the impending global economic recession (and resultant unemployment) “will make it easier to recruit low-level accomplices such as money mules.”

Alex Holden, founder and CTO of Hold Security, agreed. He said while the Coronavirus has forced reshipping operators to make painful shifts in several parts of their business, the overall market for available mules has never looked brighter.

“Reshipping is way up right now, but there are some complications,” he said.

For example, reshipping scams have over the years become easier for both reshipping mule operators and the mules themselves. Many reshipping mules are understandably concerned about receiving stolen goods at their home and risking a visit from the local police. But increasingly, mules have been instructed to retrieve carded items from third-party locations.

“The mules don’t have to receive stolen goods directly at home anymore,” Holden said. “They can pick them up at Walgreens, Hotel lobbies, etc. There are a ton of reshipment tricks out there.”

But many of those tricks got broken with the emergence of COVID-19 and social distancing norms. In response, more mule recruiters are asking their hires to do things like reselling goods shipped to their homes on platforms like eBay and Amazon.

“Reshipping definitely has become more complicated,” Holden said. “Not every mule will run 10 times a day to the post office, and some will let the goods sit by the mailbox for days. But on the whole, mules are more compliant these days.”

GIVE AND TAKE

KrebsOnSecurity recently came to a similar conclusion: Last month’s story, “Coronavirus Widens the Money Mule Pool,” looked at one money mule operation that had ensnared dozens of mules with phony job offers in a very short period of time. Incidentally, the fake charity behind that scheme — which promised to raise money for Coronavirus victims — has since closed up shop and apparently re-branded itself as the Tessaris Foundation.

Charitable cybercriminal endeavors were the subject of a report released this week by cyber intel firm Digital Shadows, which looked at various ways computer crooks are promoting themselves and their hacking services using COVID-19 themed discounts and giveaways.

Like many commercials on television these days, such offers obliquely or directly reference the economic hardships wrought by the virus outbreak as a way of connecting on an emotional level with potential customers.

“The illusion of philanthropy recedes further when you consider the benefits to the threat actors giving away goods and services,” the report notes. “These donors receive a massive boost to their reputation on the forum. In the future, they may be perceived as individuals willing to contribute to forum life, and the giveaways help establish a track record of credibility.”

Brian’s Club — one of the underground’s largest bazaars for selling stolen credit card data and one that has misappropriated this author’s likeness and name in its advertising — recently began offering “pandemic support” in the form of discounts for its most loyal customers.

It stands to reason that the virus outbreak might depress cybercriminal demand for “dumps,” or stolen account data that can be used to create physical counterfeit credit cards. After all, dumps are mainly used to buy high-priced items from electronics stores and other outlets that may not even be open now thanks to the widespread closures from the pandemic.

If that were the case, we’d also expect to see dumps prices fall significantly across the cybercrime economy. But so far, those price changes simply haven’t materialized, says Gemini Advisory, a New York based company that monitors the sale of stolen credit card data across dozens of stores in the cybercrime underground.

Stas Alforov, Gemini’s director of research and development, said there’s been no notable dramatic changes in pricing for both dumps and card data stolen from online merchants (a.k.a. “CVVs”) — even though many cybercrime groups appear to be massively shifting their operations toward targeting online merchants and their customers.

“Usually, the huge spikes upward or downward during a short period is reflected by a large addition of cheap records that drive the median price change,” Alforov said, referring to the small and temporary price deviations depicted in the graph above.

Intel 471 said it came to a similar conclusion.

“You might have thought carding activity, to include support aspects such as checker services, would decrease due to both the global lockdown and threat actors being infected with COVID-19,” the company said. “We’ve even seen some actors suggest as much across some shops, but the reality is there have been no observations of major changes.”

CONSCIENCE VS. COMMERCE

Interestingly, the Coronavirus appears to have prompted discussion on a topic that seldom comes up in cybercrime communities — i.e., the moral and ethical ramifications of their work. Specifically, there seems to be much talk these days about the potential karmic consequences of cashing in on the misery wrought by a global pandemic.

For example, Digital Shadows said some have started to question the morality of targeting healthcare providers, or collecting funds in the name of Coronavirus causes and then pocketing the money.

“One post on the gated Russian-language cybercriminal forum Korovka laid bare the question of threat actors’ moral obligation,” the company wrote. “A user initiated a thread to canvass opinion on the feasibility of faking a charitable cause and collecting donations. They added that while they recognized that such a plan was ‘cruel,’ they found themselves in an ‘extremely difficult financial situation.’ Responses to the proposal were mixed, with one forum user calling the plan ‘amoral,’ and another pointing out that cybercrime is inherently an immoral affair.”

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Would You Have Fallen for This Phone Scam?

You may have heard that today’s phone fraudsters like to use use caller ID spoofing services to make their scam calls seem more believable. But you probably didn’t know that these fraudsters also can use caller ID spoofing to trick your bank into giving up information about recent transactions on your account — data that can then be abused to make their phone scams more believable and expose you to additional forms of identity theft.

Last week, KrebsOnSecurity told the harrowing tale of a reader (a security expert, no less) who tried to turn the tables on his telephonic tormentors and failed spectacularly. In that episode, the people impersonating his bank not only spoofed the bank’s real phone number, but they were also pretending to be him in a separate call at the same time with his bank.

This foiled his efforts to make sure it was really his bank that called him, because he called his bank with another phone and the bank confirmed they currently were in a separate call with him discussing fraud on his account (however, the other call was the fraudster pretending to be him).

Shortly after that story ran, I heard from another reader — we’ll call him “Jim” since he didn’t want his real name used for this story — whose wife was the target of a similar scam, albeit with an important twist: The scammers were armed with information about a number of her recent financial transactions, which he claims they got from the bank’s own automated phone system just by spoofing her phone number.

“When they originally called my wife, there were no fraudulent transactions on her account, but they were able to specify the last three transactions she had made, which combined with the caller-ID had mistakenly earned her trust,” Jim explained. “After we figured out what was going on, we were left asking ourselves how the crooks had obtained her last three transactions without breaking into her account online. As it turned out, calling the phone number on the back of the credit card from the phone number linked with the card provided the most recent transactions without providing any form of authentication.”

Jim said he was so aghast at this realization that he called the same number from his phone and tried accessing his account, which is also at Citi but wholly separate from his spouse’s. Sure enough, he said, as long as he was calling from the number on file for his account, the automated system let him review recent transactions without any further authentication.

“I confirmed on my separate Citi card that they often (but not quite always) were providing the transaction details,” Jim said. “I was appalled that Citi would do that. So, it seemed the crooks would spoof caller ID when calling Citibank, as well as when calling the target/victim.”

The incident Jim described happened in late January 2020, and Citi may have changed its procedures since then. The company has not yet responded to requests for comment.

But in a phone interview with KrebsOnSecurity earlier this week, Jim made a call to Citi’s automated system from his mobile phone on file with the bank, and I could hear Citi’s systems asking him to enter the last four digits of his credit card number before he could review recent transactions.

The request for the last four of the customer’s credit card number was consistent with my own testing, which relied upon on a caller ID spoofing service advertised in the cybercrime underground and aimed at a Citi account controlled by this author.

In one test, the spoofed call let KrebsOnSecurity hear recent transaction data — where and when the transaction was made, and how much was spent — after providing the automated system the last four digits of the account’s credit card number. In another test, the automated system asked for the account holder’s full Social Security number.

PREGNANT PAUSES AND BULGING EMAIL BOMBS

Jim said the fraudster who called his wife clearly already knew her mailing and email addresses, her mobile number and the fact that her card was an American Airlines-branded Citi card. The caller said there had been a series of suspicious transactions, and proceeded to read back details of several recent transactions to verify if those were purchases she’d authorized.

A list of services offered by one of several underground stores that sell caller ID spoofing and email bombing services.

Jim’s wife quickly logged on to her Citi account and saw that the amounts, dates and places of the transactions referenced by the caller indeed corresponded to recent legitimate transactions. But she didn’t see any signs of unauthorized charges.

After verifying the recent legitimate transactions with the caller, the person on the phone asked for her security word. When she provided it, there was a long hold before the caller came back and said she’d provided the wrong answer.

When she corrected herself and provided a different security word, there was another long pause before the caller said the second answer she provided was correct. At that point, the caller said Citi would be sending her a new card and that it had prevented several phony charges from even posting to her account.

She didn’t understand until later that the pauses were points at which the fraudsters had to put her on hold to relay her answers in their own call posing as her to Citi’s customer service department.

Not long after Jim’s spouse hung up with the caller, her inbox quickly began filling up with hundreds of automated messages from various websites trying to confirm an email newsletter subscription she’d supposedly requested.

As the recipient of several of these “email bombing” attacks, I can verify that crooks often will use services offered in the cybercrime underground to flood a target’s inbox with these junk newsletter subscriptions shortly after committing fraud in the target’s name when they wish to bury an email notification from a target’s bank.

‘OVERPAYMENT REIMBURSEMENT’

In the case of Jim’s wife, the inbox flood backfired, and only made her more suspicious about the true nature of the recent phone call. So she called the number on the back of her Citi card and was told that she had indeed just called Citi and requested what’s known as an “overpayment reimbursement.” The couple have long had their credit cards on auto-payment, and the most recent payment was especially high — nearly $4,000 — thanks to a flurry of Christmas present purchases for friends and family.

In an overpayment reimbursement, a customer can request that the bank refund any amount paid toward a previous bill that exceeds the minimum required monthly payment. Doing so causes any back-due interest on that unpaid amount to accrue to the account as well.

In this case, the caller posing as Jim’s wife requested an overpayment reimbursement to the tune of just under $4,000. It’s not clear how or where the fraudsters intended this payment to be sent, but for whatever reason Citi ended up saying they would cut a physical check and mail it to the address on file. Probably not what the fraudsters wanted, although since then Jim and his wife say they have been on alert for anyone suspicious lurking near their mailbox.

“The person we spoke with at Citi’s fraud department kept insisting that yes, it was my wife that called because the call came from her mobile number,” Jim said. “The Citi employee was alarmed because she didn’t understand the whole notion of caller ID spoofing. And we both found it kind of disturbing that someone in fraud at such a major bank didn’t even understand that such a thing was possible.”

SHOPPING FOR ‘CVVs’

Fraud experts say the scammers behind the types of calls that targeted Jim’s family are most likely fueled by the rampant sale of credit card records stolen from hacked online merchants. This data, known as “CVVs” in the cybercrime underground, is sold in packages for about $15 per record, and very often includes the customer’s name, address, phone number, email address and full credit or debit card number, expiration date, and card verification value (CVV) printed on the back of the card.

A screen shot from an underground store selling CVV records. Note that all of these records come with the cardholder’s address, email, phone number and zip code. Click to enlarge. Image: Gemini Advisory.

Dozens of cybercrime shops traffic in this stolen data, which is more traditionally used to defraud online merchants. But such records are ideally suited for criminals engaged in the type of phone scams that are the subject of this article.

That’s according to Andrei Barysevich, CEO and co-founder of Gemini Advisory, a New York-based company that monitors dozens of underground shops selling stolen card data.

“If the fraudsters already have the target’s cell phone number, in many cases they already have the target’s credit card information as well,” Barysevich said.

Gemini estimates there are currently some 13 million CVV records for sale across the dark web, and that more than 40 percent of these records put up for sale over the past year included the cardholder’s phone number.

Data from recent financial transactions can not only help fraudsters better impersonate your bank, it can also be useful in linking a customer’s account to another account the fraudsters control. That’s because PayPal and a number of other pure-play online financial institutions allow customers to link accounts by verifying the value of microdeposits.

For example, if you wish to be able to transfer funds between PayPal and a bank account, the company will first send a couple of tiny deposits — a few cents, usually — to the account you wish to link. Only after verifying those exact amounts will the account-linking request be granted.

JUST HANG UP

Both this and last week’s story illustrate why the only sane response to a call purporting to be from your bank is to hang up, look up your bank’s customer service number from their Web site or from the back of your card, and call them back yourself.

Meanwhile, fraudsters who hack peoples’ finances with nothing more than a telephone have been significantly upping the volume of attacks in recent months, new research suggests. Fraud prevention company Next Caller said this week it has tracked “massive increases in call volumes and high-risk calls across Fortune 500 companies as a result of COVID-19.”

Image: Next Caller.

“After a brief reprieve in Week 4 (April 6-12), Week 5 (April 13-19) saw call volume across Next Caller’s clients in the telecom and financial services sectors spike 40% above previous highs,” the company found. “Particularly worrisome is the activity taking place in the financial services sector, where call traffic topped previous highs by 800%.”

Next Caller said it’s likely some of that increase was due to numerous online and mobile app outages for many major financial institutions at a time when more than 80 million Americans were simultaneously trying to track the status of their stimulus deposits. But it said that surge also brought with it an influx of fraudsters looking to capitalize on all the chaos.

“High-risk calls to financial services surged to 50% above pre-COVID levels, with one Fortune 100 bank suffering a high-risk increase of 60% during Week 5,” the company wrote in a recent report.

bebe stores breach, Buca di Beppo breach, Data Breaches, Gemini Advisory, Hilton Hotels breach, Joker's stash, Krystal breach, mastercard, McAlister's Deli breach, Moe's breach, Scholtzsky's breach, Sonic breach, The Coming Storm, Visa, Wawa breach

Wawa Breach May Have Compromised More Than 30 Million Payment Cards

In late December 2019, fuel and convenience store chain Wawa Inc. said a nine-month-long breach of its payment card processing systems may have led to the theft of card data from customers who visited any of its 850 locations nationwide. Now, fraud experts say the first batch of card data stolen from Wawa customers is being sold at one of the underground’s most popular crime shops, which claims to have 30 million records to peddle from a new nationwide breach.

On the evening of Monday, Jan. 27, a popular fraud bazaar known as Joker’s Stash began selling card data from “a new huge nationwide breach” that purportedly includes more than 30 million card accounts issued by thousands of financial institutions across 40+ U.S. states.

The fraud bazaar Joker’s Stash on Monday began selling some 30 million stolen payment card accounts that experts say have been tied back to a breach at Wawa in 2019.

Two sources that work closely with financial institutions nationwide tell KrebsOnSecurity the new batch of cards that went on sale Monday evening — dubbed “BIGBADABOOM-III” by Joker’s Stash — map squarely back to cardholder purchases at Wawa.

On Dec. 19, 2019, Wawa sent a notice to customers saying the company had discovered card-stealing malware installed on in-store payment processing systems and fuel dispensers at potentially all Wawa locations.

Pennsylvania-based Wawa says it discovered the intrusion on Dec. 10 and contained the breach by Dec. 12, but that the malware was thought to have been installed more than nine months earlier, around March 4. The exposed information includes debit and credit card numbers, expiration dates, and cardholder names. Wawa said the breach did not expose personal identification numbers (PINs) or CVV records (the three-digit security code printed on the back of a payment card).

A spokesperson for Wawa confirmed that the company today became aware of reports of criminal attempts to sell some customer payment card information potentially involved in the data security incident announced by Wawa on December 19, 2019.

“We have alerted our payment card processor, payment card brands, and card issuers to heighten fraud monitoring activities to help further protect any customer information,” Wawa said in a statement released to KrebsOnSecurity. “We continue to work closely with federal law enforcement in connection with their ongoing investigation to determine the scope of the disclosure of Wawa-specific customer payment card data.”

“We continue to encourage our customers to remain vigilant in reviewing charges on their payment card statements and to promptly report any unauthorized use to the bank or financial institution that issued their payment card by calling the number on the back of the card,” the statement continues. “Under federal law and card company rules, customers who notify their payment card issuer in a timely manner of fraudulent charges will not be responsible for those charges. In the unlikely event any individual customer who has promptly notified their card issuer of fraudulent charges related to this incident is not reimbursed, Wawa will work with them to reimburse them for those charges.”

Gemini Advisory, a New York-based fraud intelligence company, said the biggest concentrations of stolen cards for sale in the BIGBADABOOM-III batch map back to Wawa customer card use in Florida and Pennsylvania, the two most populous states where Wawa operates. Wawa also has locations in Delaware, Maryland, Virginia and the District of Columbia.

According to Gemini, Joker’s Stash has so far released only a small portion of the claimed 30 million. However, this is not an uncommon practice: Releasing too many stolen cards for sale at once tends to have the effect of depressing the overall price of stolen cards across the underground market.

“Based on Gemini’s analysis, the initial set of bases linked to “BIGBADABOOM-III” consisted of nearly 100,000 records,” Gemini observed. “While the majority of those records were from US banks and were linked to US-based cardholders, some records also linked to cardholders from Latin America, Europe, and several Asian countries. Non-US-based cardholders likely fell victim to this breach when traveling to the United States and utilizing Wawa gas stations during the period of exposure.”

Gemini’s director of research Stas Alforov stressed that some of the 30 million cards advertised for sale as part of this BIGBADABOOM batch may in fact be sourced from breaches at other retailers, something Joker’s Stash has been known to do in previous large batches.

Gemini monitors multiple carding sites like Joker’s Stash. The company found the median price of U.S.-issued records in the new Joker’s Stash batch is currently $17, with some of the international records priced as high as $210 per card.

“Apart from banks with a nationwide presence, only financial institutions along the East Coast had significant exposure,” Gemini concluded.

Representatives from MasterCard did not respond to requests for comment. Visa declined to comment for this story, but pointed to a series of alerts it issued in November and December 2019 about cybercrime groups increasingly targeting fuel dispenser merchants.

A number of recent high-profile nationwide card breaches at main street merchants have been linked to large numbers of cards for sale at Joker’s Stash, including breaches at supermarket chain Hy-Vee, restaurant chains Sonic, Buca di Beppo, Krystal, Moe’s, McAlister’s Deli, and Schlotzsky’s, retailers like Bebe Stores, and hospitality brands such as Hilton Hotels.

Most card breaches at restaurants and other brick-and-mortar stores occur when cybercriminals manage to remotely install malicious software on the retailer’s card-processing systems. This type of point-of-sale malware is capable of copying data stored on a credit or debit card’s magnetic stripe when those cards are swiped at compromised payment terminals, and that data can then be used to create counterfeit copies of the cards.

The United States is the last of the G20 nations to make the shift to more secure chip-based cards, which are far more expensive and difficult for criminals to counterfeit. Unfortunately, many merchants have not yet shifted to using chip-based card readers and still swipe their customers’ cards.

According to stats released in November by Visa, more than 3.7 million merchant locations are now accepting chip cards. Visa says for merchants who have completed the chip upgrade, counterfeit fraud dollars dropped 81 percent in June 2019 compared to September 2015. This may help explain why card thieves increasingly are shifting their attention to compromising e-commerce merchants, a trend seen in virtually every country that has already made the switch to chip-based cards.

Many filling stations are upgrading their pumps to include more cyber and physical security — such as end-to-end encryption of card data, custom locks and security cameras. In addition, newer pumps can accommodate more secure chip-based payment cards that are already in use and in some cases mandated by other G20 nations.

But these upgrades are disruptive and expensive, and many fuel station owners are putting them off until it is absolutely necessary. Prior to late 2016, fuel station owners in the United States had until October 1, 2017 to install chip-capable readers at their pumps. Station owners that didn’t have chip-ready readers in place by then would have been on the hook to absorb 100 percent of the costs of fraud associated with transactions in which the customer presented a chip-based card yet was not asked or able to dip the chip.

Yet in December 2016, Visa — by far the largest credit card network in the United States — delayed the requirements, saying fuel station owners would be given until October 1, 2020 to meet the liability shift deadline.

Either way, Wawa could be facing steep fines for failing to protect customer card data traversing its internal payment card networks. In addition, at least one class action lawsuit has already been filed against the company.

Finally, it’s important to note that even if all 30 million of the cards that Joker’s Stash is selling as part of this batch do in fact map back to Wawa locations, it’s highly unlikely that more than a small percentage of these cards will actually be purchased and used by fraudsters. In the 2013 megabreach at Target Corp., for example, fraudsters stole roughly 40 million cards but only ended up selling between one to three million of those cards.