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Scareware Mr Bigs enjoy 'low risk' crime bonanza

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RSA Europe 2009 Cybercriminals are growing rich by franchising out scareware distribution operations.

The trade in rogue anti-virus application can make top-tier distributors an estimated $1.2m (£ 850,000) a year, net security firm Symantec estimates. A study by Symantec into the psychology of the scam found that 93 per cent of users deliberately downloaded and installed scareware packages, albeit without realising what they were getting for their money.

Scareware slingers use trickery to mimic the look and feel of legitimate security packages, tapping into users' fears in order to trick them into buying worthless software packages. Some malicious sites use legitimate online payment services to process credit card purchases, offering receipts and serial numbers.

Marks ended up running scareware packages of little or no utility, at best. Some of these packages install malicious code or reduce the overall security of a client PC, while in other cases users' payment details are used to facilitate further forms of fraud.

The comparatively low-risk, fast-growing form of cybercrime typically uses an affiliate-based sales model. Symantec’s study found that the top ten sales affiliates of scareware distribution site TrafficConverter.biz earned an average of $23,000 per week.

The resellers of rogue software earn between $0.01 and $0.55 for every successful installation. Distribution sites sometimes offer affiliates incentives and prizes such as electronic goods and even luxury cars.

Professor David Wall, an expert in cybercrime from Leeds University, explained: “Using the internet for this crime reduces a major risk of for the criminals. Criminals can make big money from many small scams, making the crime difficult to police, especially when it is carried out internationally.”

Wall added that peddling scareware was an even easier crime than phishing, which involves recruiting middlemen as money mules in order to collect funds from compromised banking accounts before sending the money overseas. “Scareware is an automated crime where the collection of money is handled by computers. Crooks can make money while they sleep,” Wall told El Reg..

Crooks involved in the scam typically get involved as a sideline to their other criminal enterprises, according to Wall who described scareware as a form of “entrapment marketing”.

At least 250 different strains of scareware software, which typically sell for anything between $30 and $100, are in circulation. Symantec reckons as many as 200,000 different websites are used to distribute fake anti-virus software packages.

Miscreants typically find vulnerabilities on legitimate websites and plant code that redirects surfers to sites advertising rogue applications.

These websites are typically promoted using black-hat search engine optimisation techniques, themed around various items that might be in the news at any particular time. Symantec’s findings are based on a 12 month study that ran until June 2009. ®

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