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Earn £8,000 a MONTH with bogus apps from Russian malware factories

DIY SMS-scam kits anyone can use - even your grandparents!

Internet Security Threat Report 2014

Just 10 professionally run malware-making workshops in Russia are responsible for 30 per cent of the Trojans, spyware and other nasties infecting smartphones globally. That's according to a study by mobile security outfit Lookout.

These underground crime labs churn out DIY kits ideal for scriptkiddies looking to make a fast buck: the tools can be used to distribute malware and earn money from it with little or no coding experience or hacking skills. Once installed on a device, the malware is typically disguised as a legit, popular app and secretly texts premium-rate numbers, thus racking up charges on the victims' phone bill.

The Russian development centres are skilled at releasing new Android builds and configurations of their code every two weeks; organising hosting for the malware; registering short-code phone numbers that victims' mobes text; and creating marketing campaign management tools — the malware developers' customers get paid for marketing and distributing the bogus apps.

These affiliates customise their copy of the malware to make it look like the latest Angry Birds or Skype utility, for example. Then they use social networks, such as Twitter, to draw people into downloading the booby-trapped software. Almost all the malware targets Android smartphones.

"We reviewed 250,000 unique Twitter handles and of those, nearly 50,000 linked directly to these toll fraud campaigns," Lookout researcher Ryan Smith explained in a blog post.

"The victim of the scheme is usually a Russian-speaking Android user looking for free apps, games, MP3s or pornography.

"The victim may have been using search engine or click through links in tweets or mobile ads, then unwittingly download the malicious app which secretly adds a premium SMS charge to their phone bill."

A research paper from Lookout on its Dragon Lady* investigation explains the malware creation centres have taken many ideas on how to run their businesses from legitimate small software houses.

"Organised groups of Android malware authors are operating like startups: tapping multiple individuals or organisations for specialisation in different business areas, leveraging online tools for promotion and developing affiliate programs," the Lookout team explained.

"We’ve seen evidence that these affiliate marketers have earned between $700/month to $12,000/month [£450/month to £7,800/month] from these scams, and estimate that there are thousands of individual distributors and potentially tens of thousands of affiliate websites promoting these custom SMS malware in the same manner as traditional affiliate web marketers."

More than 50 per cent of Lookout’s total malware detections during the first half of 2013 were Russian-based toll fraud. And 60 per cent of this activity can be traced back to just 10 centres in Russia.

Lookout has been actively tracking SMS fraud since the first example was found in the wild in August 2010. Lookout has been classifying Russian SMS-swindling malware in individual groups or “families” based on similarities in code and key features in the three years since. The data has also allowed the security biz to track individual malware families back to affiliates and the programmers' headquarters.

The firm unveiled its research during a presentation at Def Con 21 in Las Vegas at the weekend. Its complete Dragon Lady research paper into the phenomenon can be found here. ®

Bootnote

* The “Dragon Lady” code-name Lookout has applied to its research references the U-2 reconnaissance aircraft that were used during the Cold War to monitor the Soviet Union.

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