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Fraudsters Resorting to 'Synthetic Identity Fraud to Commit Financial Crimes

 

Identity theft is still a common tactic for hackers to damage the credit score. To steal even more and avoid discovery, an increasing number of fraudsters are turning to "synthetic identity fraud," which includes constructing spoof personalities to deceive financial institutions.

Michael Timoney, VP of Secure Payments at the Federal Reserve Bank of Boston stated, “This is growing. It’s got big numbers tied to $20 billion(Opens in a new window) plus (in losses), and we’re not really seeing a drop in it. Due to the pandemic, the numbers have gotten even higher."

Timoney described how the threat exploits a critical vulnerability in the US banking system at the RSA conference in San Francisco: when a customer applies for a credit card or a loan, many businesses do not always verify their identification. Timoney defined synthetic identity fraud as the use of multiple pieces of personally identifiable information to create a totally new person. 

He added, “It’s different from traditional identity theft because if someone stole my identity they would be acting in my name. I would go into my bank account and see my money is gone or I’d try to log into my account but I’d be locked out.” 

“Because of data breaches, there is so much information out there for sale. In other cases, the crooks will alter or make up the Social Security number and address data entirely, hoping the companies won't catch on. Once you apply for credit with your brand new identity, there is no credit file out there for you, but one gets created immediately. So right off the bat, you now have a credit file associated with this synthetic. So it sort of validates the identity. Now you got an identity and it has a credit record."  

The hacker will then strive to improve the credit rating of the spoof identity in order to secure larger loans or credit card limits before bailing without ever paying the lending agency. He added that the fraudster will settle their charges and request further credit. 

According to Timoney, the scammers have also been using the fraudulent personas to seek for unemployment benefits and obtain loans from the Paycheck Protection Program, which began during the pandemic to assist businesses in paying their employees. 

How to stop synthetic identity fraud?

To combat synthetic identity fraud, the United States is developing (Opens in a new window) the Electronic Consent Based Social Security Number Verification Service, which can determine whether a Social Security number matches one of these on record. However, Timoney stated that the system will only be offered to financial institutions and will not be open to other industries that provide credit to clients. 

In response, Timoney emphasized that it is critical for businesses to be on the lookout for warning indicators linked with synthetic identity fraud. This might include inconsistencies in the applicant's background. For example, consider a person who is 60 years old but has never had a credit history while having lived in the United States their whole life or an 18-year-old with a credit score of at least 800. 

Another method for detecting synthetic identity theft is to see if a loan application has any confirmed family members. One should be looking at a lot more than just the name, address, and Social Security number.

New Spear Phishing Campaign Targets Russian Dissidents

 

In Russia, a new spear-phishing campaign targeting dissenters with alternative views to those presented by the state and national media over the war in Ukraine is underway. The campaign distributes emails to government personnel and public servants, alerting them about software and online platforms that are illegal in the country. 

The mails contain a malicious attachment or link that sends a Cobalt Strike beacon to the recipient's computer, allowing remote operators to execute eavesdropping on the victim. The campaign was discovered and reported on by Malwarebytes Labs threat analysts, who were able to sample some of the bait emails. 

Various phishing methods

To persuade recipients to open the attachment, the phishing emails pretend to be from a Russian state organisation, ministry, or federal service. The main two spoofed organizations are the "Russian Federation Ministry of Information Technologies and Communications" and the "Russian Federation Ministry of Digital Development, Communications, and Mass Communications." 

To attack their targets with Cobalt Strike, the threat actors use three different file types: RTF (rich text format) files, archive attachments of malicious documents, and download links inserted in the email body. Since it involves the exploitation of CVE-2021-40444, a remote code execution flaw in the rendering engine used by Microsoft Office documents, the case of RTFs is the most interesting. 

All of the phishing emails are written in Russian, as expected, and they appear to have been created by native speakers rather than machine translated, implying that the campaign is being spearheaded by a Russian-speaking individual. Malwarebytes discovered simultaneous attempts to spread a deeply obfuscated PowerShell-based remote access trojan (RAT) with next-stage payload fetching capabilities in addition to Cobalt Strike. 

The campaign's targets are mostly employed by the Russian government and public sector, including the following organisations: 
  • Portal of authorities of the Chuvash Republic Official Internet portal
  • Russian Ministry of Internal Affairs
  • ministry of education and science of the Republic of Altai
  • Ministry of Education of the Stavropol Territory
  • Minister of Education and Science of the Republic of North Ossetia-Alania
  • Government of Astrakhan region
  • Ministry of Education of the Irkutsk region
  • Portal of the state and municipal service Moscow region
  • Ministry of science and higher education of the Russian Federation
As per the aforementioned organisations, phishing actors target persons in crucial positions who could cause problems for the central government by stirring anti-war movements.

IP Spoofing Flaw Leaves Django REST Applications Vulnerable to DDoS Attacks

 

Attackers used an IP spoofing flaw in Django REST to bypass the framework's throttling function, which is designed to protect apps from mass requests. 

Mozilla, Red Hat, and Heroku, among others, use Django REST as a toolkit for constructing web APIs. It includes a throttling function that limits the number of API queries a client may make. Bot activity, denial-of-service attacks, and malicious actions such as brute-force attempts on login sites, one-time passwords, and password reset pages are all protected by this feature. 

IP addresses are used by Django REST to recognize clients and implement throttling request restrictions. Clients can, however, deceive the server and hide their IP address, according to security researcher Hosein Vita. 

He told The Daily Swig, “Django use WSGI (web server gateway interface) to communicate with web application and X-Forwarded-For HTTP header and REMOTE_ADDR WSGI variable are used to uniquely identify client IP addresses for throttling.” 

As a result, if the X-Forwarded-For header is included in a web request, the server will interpret it as the client's IP address. Vita was able to submit an endless number of requests with the same client by changing the X-Forwarded-For value. The approach only works for unauthenticated queries, according to Vita's bug report. 

APIs that require user authentication take both the user’s ID and the IP address into account when throttling, so IP spoofing is not enough to circumvent the request limits. According to Vita, the attack requires no specific server access, and an attacker who "can just see the website can abuse this method. 

Its immediate impact could be DDoS attacks caused by fraudulent requests flooding Django servers. However, it can also be used for other objectives, such as bypassing login page defences against brute-force attacks. Vita apparently identified the flaw while pen-testing an app with a one-time password login page. 

He stated, “You could log in [to the application] with OTP but I got blocked after many attempts. After my research, I used X-Forwarded-For header, and again I could send requests but after some attempts, again I got blocked.” 

The researcher added: “From my previous background in Django, I guessed it could get bypassed by changing the value of X-Forwarded-For header, and you could send 30 requests with each IP. Then I checked that in my Django API and it was correct.” 

The Django REST team was contacted by The Daily Swig for comment on the vulnerability. Meanwhile, Vita suggests using complementary strategies to protect applications from brute-force attacks. 

He added, “Always use other aspects of security measures as secondary methods. Use Captcha or other related methods to reduce attacks like this in important endpoints. For OTPs, use a token for each generated OTPs.”

FBI: Fake Government Websites Used to Steal Private & Financial Data

 

The FBI has alerted the public in the United States that threat actors are proactively capturing sensitive financial and personal information from innocent victims via phoney and fraudulent unemployment benefit websites. 

Websites used in these assaults are built to seem just like official government platforms in order to deceive victims into giving over their information, infecting them with malware, and claiming unemployment benefits on their behalf. 

The federal law enforcement agency stated in a public service announcement published on Internet Crime Complaint Center's site, "These spoofed websites imitate the appearance of and can be easily mistaken for legitimate websites offering unemployment benefits. The fake websites prompt victims to enter sensitive personal and financial information. Cyber actors use this information to redirect unemployment benefits, harvest user credentials, collect personally identifiable information, and infect victim's devices with malware.” 

"In addition to a loss of benefits, victims of this activity can suffer a range of additional consequences, including ransomware infection and identity theft." 

As per the FBI, 385 domains were detected, with eight of them spoofing government sites related to official unemployment benefits platforms. Domain and status are listed below:
  • employ-nv[.]xyz:  Active 
  • employ-wiscon[.]xyz: Inactive 
  • gov2go[.]xyz : Active 
  • illiform-gov[.]xyz : Active 
  • mary-landgov[.]xyz : Active 
  • Marylandgov[.]xyz: Inactive 
  • newstate-nm[.]xyz:  Active 
  • Newstatenm[.]xyz: Inactive 
There is also a possibility that the data obtained through these fake sites will end up in the hands of identity fraudsters, who would use it in different benefit fraud schemes. The US Federal Trade Commission (FTC) reported in February 2021 that the overall number of identity theft reports doubled in 2020 compared to 2019, with 1.4 million reports in a single year. 

The FTC stated, "2020’s biggest surge in identity theft reports to the FTC related to the nationwide dip in employment. After the government expanded unemployment benefits to people left jobless by the pandemic, cybercriminals filed unemployment claims using other people’s personal information." 

For example, the FTC received 394,280 reports of government benefits fraud attempts last year, the majority of which were connected to unemployment benefit identity theft fraud, compared to 12,900 reported in 2019. 

The Internal Revenue Service (IRS) also issued taxpayer guidelines in January on recognizing theft activities involving unemployment payments. The US federal revenue service stated, "The Internal Revenue Service today urged taxpayers who receive Forms 1099-G for unemployment benefits they did not actually get because of identity theft to contact their appropriate state agency for a corrected form." 

"Additionally, if taxpayers are concerned that their personal information has been stolen and they want to protect their identity when filing their federal tax return, they can request an Identity Protection Pin (IP PIN) from the IRS." 

The FBI also offered some advice on how to safeguard yourself against identity theft in the release and a few are listed below: 
  • To identify limitations, the spelling of web addresses should be verified. 
  • Check that the website you're visiting has an SSL certificate. 
  • Software upgrades are required; 
  • It is recommended that two-factor authentication be utilized. 
  • Avoid phishing emails at all costs.