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Booming scareware biz raking in $34m a month

Panda dissects rogue security software market

Seven Steps to Software Security

Fraudsters are making approximately $34m per month through scareware attacks, designed to trick surfers into purchasing rogue security packages supposedly needed to deal with non-existent threats.

A new study, The Business of Rogueware, by Panda Security researchers Luis Corrons and Sean-Paul Correll, found that scareware distributors are successfully infecting 35 million machines a month.

Social engineering attacks, often featuring social networking sites, that attempt to trick computer users into sites hosting scareware software have become a frequently used technique for distributing scareware. Tactics include manipulating the search engine rank of pages hosting scareware.

Panda reckons that there are 200 different families of rogueware, with more new variants coming on stream all the time.

"Rogueware is so popular among cybercriminals primarily because they do not need to steal users' personal information like passwords or account numbers in order to profit from their victims," explained Luis Corrons, PandaLabs' technical director. "By taking advantage of the fear in malware attacks, they prey upon willing buyers of their fake anti-virus software, and are finding more and more ways to get to their victims, especially as popular social networking sites and tools like Facebook and Twitter have become mainstream."

In Q2 2009, four times more new strains were created than in the whole of 2008, primarily in a bid to avoid signature-based detection by genuine security packages. Behaviour-based detection, an approach that works well with Trojans and worms, is limited when applied against scareware packages. Apart from displaying bogus warnings about security risks, scareware packages don't do anything malicious, in most cases. However Panda has begun detecting scareware variants that incorporate rootkit features.

Scareware business model

Panda identified two major groups of players in the scareware business: program writers and distributors. The writers create the rogue applications, establish distribution platforms, payment gateways, and other back office services. Meanwhile affiliates are tasked with the job of distributing scareware to as many victims as possible in the fastest possible time.

Many of these affiliates are Eastern Europeans recruited in underground hacking forums, Panda's research has revealed. Each install of trial scareware software earns a small amount but the real money comes from completed sales, which earns scareware distributors a commission of between 50-90 per cent. Panda reports that scareware distributors and authors meet together at conferences not unlike corporate sales events. ®

Mobile application security vulnerability report

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