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Cybersecurity incidents have become increasingly common in the mortgage industry, with multiple lenders and servicers experiencing data breaches that compromised sensitive customer information. Carrington Mortgage Services is the latest player to be impacted, as a ransomware attack at its vendor Alvaria compromised the information of its customers, including partial Social Security numbers.
In this blog post, we'll take a closer look at the details of this breach, as well as other recent cybersecurity incidents in the mortgage industry.
Last week, Carrington Mortgage Services announced that a technology company it uses, Alvaria, experienced a ransomware attack in March. As a result, the personal information of some of Carrington's customers, including partial Social Security numbers, was compromised.
Although neither Carrington nor Alvaria disclosed the total number of affected clients, a letter to state attorneys general indicated that at least 4,167 residents of Massachusetts were impacted. This is the most recent hack of a mortgage player, following a series of incidents across the industry last year.
Alvaria responded to the attack by restoring its operations through backups and securing its networks. According to the Lowa letter, “the unauthorized actor obtained some data associated with the company maintained in the technical system log and temp files.” “While Alvaria performed its forensic investigation, the company completed its analysis of the affected data on April 4, 2023
According to Carrington Mortgage Services, compromised data due to the breach at Alvaria includes clients' names, mailing addresses, telephone numbers, loan numbers and balances, and the last four digits of their Social Security numbers.
However, when asked about Alvaria's reported data breach, Carrington's attorney declined to comment, while Alvaria's general counsel deferred to a company spokesperson. Alvaria did notify the FBI and took additional security measures following the breach, although the details of these measures were not disclosed.
In an effort to mitigate the effects of the breach, Carrington is offering customers 24 months of free credit monitoring and fraud consultation from Experian. In a letter to the Iowa Attorney General, Carrington defended its information security diligence and stated that it had received positive reviews from state and federal regulators, rating agencies, and banking counterparts.
The letter signed by the attorney for Carrington said: “Nevertheless, in light of this event, the company has begun an additional assessment of Alvaria's technical security measures to ensure that Alvaria has been providing and will continue to provide the security measures promised to the company and to help ensure this type of incident does not happen again.”
Carrington Mortgage Services has been actively involved in the mortgage servicing rights market and purchased $62.3 billion in 2020, making it one of the top 25 services in the country. In total, it holds $122.1 billion in MSRs from 682,000 borrowers. This incident is the second data breach at Alvaria within four months, with the previous attack being disclosed in February and impacting 4,695 customers.
The Hive Ransomware group was responsible for this attack, and in November, the group released corporate records on the dark web, though no customer data was included. It's unclear whether the November breach affected mortgage customer data. In 2021 alone, various mortgage lenders have disclosed cybersecurity incidents that impacted 191,000 customers.
These attacks have ranged in severity, from incidents affecting as few as 600 customers to a third-party breach that impacted 139,493 customers of Hatch Bank in California. Several class action complaints against impacted companies remain pending in federal courts, including those against servicers such as Key Bank, Lower, and Overby-Seawell Company.
Despite this, DNS is not typically considered a prominent target in attacks, likely due to complex security terminologies such as DNS over TLS or HTTP. According to a report by CloudFlare, DNS queries in plaintext can be encrypted with TLS and HTTP to ensure secure and private browsing.
In spite of this, Akamai's DNS threat report for Q3 highlighted a rise of 40% in DNS attacks during the corresponding quarter of the previous year. Furthermore, during Q3 of the previous year, 14% of all safeguarded devices communicated with a malicious designation at least once.
The Infoblox Threat Intelligence Group, which examines billions of DNS records and millions of domain-related records daily, has identified a new malware toolkit called Decoy Dog that employs the Pupy remote access trojan.
Renée Burton, Senior Director of Threat Intelligence at Infoblox, revealed that Pupy is an open-source tool that is complex to utilize and inadequately documented. Infoblox's findings indicate that the Decoy Dog toolkit is being employed in less than 3% of all networks, and the threat actor who controls it is linked to only 18 domains.
Through a sequence of anomaly detectors, the team discovered Decoy Dog's activities and learned that it had been running a data exfiltration command and control system since early April 2022 for over a year, which no one else had detected.
Infoblox's researchers discovered that the Decoy Dog C2 was primarily originating from hosts located in Russia, according to an analysis of external global DNS data.
The concern with this malware is that no one knows precisely what it controls, even though its signature is known.
Burton explained that command and control allow an attacker to take over systems and issue orders, such as extracting all of an individual's emails or shutting down a firewall. She also stated that Pupy, which is linked to Decoy Dog, has previously been associated with nation-state activities, despite not being easy for the average cybercriminal to access due to its complexity and lack of instructions on establishing the DNS nameserver required for C2 communications.
Some common uses of RAT malware involve an attacker acquiring remote access to a laptop, then leasing it out to other threat actors who install more malware through its network access. This can result in a laptop becoming part of a botnet.
Hidden RATs, or malware of unknown origin that remains undetected, can pose significant risks. For example, in 2018, Israeli cyber-arms firm NSO Group developed a C2 spyware called Pegasus that could infiltrate and control various mobile devices, giving remote hackers access to a phone's cameras, location, microphone, and other sensors for surveillance purposes.
Amnesty International became involved when the Saudi government allegedly used Pegasus to spy on the family of Jamal Khashoggi, who had been murdered by government operatives.
Amnesty International's Security Lab recently uncovered another commercial spyware that went unnoticed for two years and utilized zero-day attacks against Google's Android operating systems. However, Infoblox had already blocked 89% of those domains before Amnesty's report, providing protection to its customers and verifying Amnesty's findings, according to Burton.
A recent research by PrivacyAffairs.com notes that hackers target social media logins, credit card numbers, and online banking logins to steal personal information worth $1,010 on the dark web.
According to an official press release released on May 1, 2023, the sale of hacked crypto accounts which is currently booming, has raised some serious concerns.
Coinbase, a cryptocurrency exchange has become a frequent target for threat actors, with stolen verified accounts worth $610 on the dark web. Users' accounts on Kraken, another well-known exchange, have also been compromised and sold online for as low as $810.
For hackers, selling compromised cryptocurrency accounts has been a profitable business, and since more people have started investing in digital assets recently, demand for these accounts has only increased. Cryptocurrencies are considered as an appealing target by hackers wanting to make a quick buck since they are mainly unregulated and decentralized.
As the value of cryptocurrencies continues to rise, it drives the hackers into stealing them. The anonymous attribute of cryptocurrencies make it challenging to locate and recover assets that have been stolen, leaving victims with limited resources.
PrivacyAffairs.com highlights the significance of raising public awareness as well as encouraging caution in order to reduce the possibility of identity theft and hacking. Online privacy should be carefully guarded by users, who should also use strong, unique passwords for each account. In addition to this, two-factor authentication is a vital tool for protecting online account.
Moreover, cryptocurrency users are advised to take extra precautions. Using cold wallets to store their virtual assets offline and avoiding sharing of their private keys or seed phrases with anyone are some of the ways that can protect you from falling prey to cybercrime activities.
The threat of cybercrime and identity fraud will only increase as the usage of digital assets and online banking grows more widespread. It is crucial that users take the required security measures to guard against hackers and other nefarious actors lurking on the dark web..