ransomware

single-point-of-software-failure-could-hamstring-15k-car-dealerships-for-days

Single point of software failure could hamstring 15K car dealerships for days

Biz & IT, car dealers, car dealerships, Cars, cdk global, crm, ransomware, SaaS, Security, venture capital, VPN / /

Virtual Private Failure —

“Cyber incident” affecting 15K dealers could mean outages “for several days.”

– Updated

Ford Mustang Mach E electric vehicles are offered for sale at a dealership on June 5, 2024, in Chicago, Illinois.

Enlarge / Ford Mustang Mach E electric vehicles are offered for sale at a dealership on June 5, 2024, in Chicago, Illinois.

Scott Olson / Getty Images

CDK Global touts itself as an all-in-one software-as-a-service solution that is “trusted by nearly 15,000 dealer locations.” One connection, over an always-on VPN to CDK’s data centers, gives a dealership customer relationship management (CRM) software, financing, inventory, and more back-office tools.

That all-in-one nature explains why people trying to buy cars, and especially those trying to sell them, have had a rough couple of days. CDK’s services have been down, due to what the firm describes as a “cyber incident.” CDK shut down most of its systems Wednesday, June 19, then told dealerships that evening that it restored some services. CDK told dealers today, June 20, that it had “experienced an additional cyber incident late in the evening on June 19,” and shut down systems again.

“At this time, we do not have an estimated time frame for resolution and therefore our dealers’ systems will not be available at a minimum on Thursday, June 20th,” CDK told customers.

As of 2 pm Eastern on June 20, an automated message on CDK’s updates hotline said that, “At this time, we do not have an estimated time frame for resolution and therefore our dealers’ systems will not be available likely for several days.” The message added that support lines would remain down due to security precautions. Getting retail dealership services back up was “our highest priority,” the message said.

On Reddit, car dealership owners and workers have met the news with some combination of anger and “What’s wrong with paper and Excel?” Some dealerships report not being able to do more than oil changes or write down customer names and numbers, while others have sought to make do with documenting orders they plan to enter in once their systems come back online.

“We lost 4 deals at my store because of this,” wrote one user Thursday morning on r/askcarsales. “Our whole auto group uses CDK for just about everything and we are completely dead. 30+ stores in our auto group.”

“We were on our own server until a month ago because CDK forced us to go to the cloud so we could implement [Electronic Repair Orders, EROs],” wrote one worker on r/serviceadvisors. “Since the change, CDK freezes multiple times a day… But now being completely down for 2 days. CDK I want a divorce.”

CDK benefits from “a rise in consolidation”

CDK started as the car dealership arm of payroll-processing giant ADP after ADP acquired two inventory and sales systems companies in 1973. CDK was spun off from ADP in 2014. In mid-2022, it was acquired by venture capital firm Brookfield Business Partners and went private, following pressure from activist public investors to trim costs.

Brookfield said at the time that it expected CDK “to benefit from a rise in consolidation across the dealership industry,” an industry estimated to be worth $30 billion by 2026. Analysts generally consider CDK to be the dominant player in the dealership management market, with an additional 15,000 customers in the trucking industry.

Under CEO Brian McDonald, who returned to the firm after its private equity buyout, the company pushed most of its enterprise IT unit to global outsourcing firm Genpact in March 2023.

CDK released a report on cybersecurity for dealerships in 2023. It noted that dealerships suffered an average of 3.4 weeks of downtime from ransomware attacks, or potentially an average payout of $740,144 (or even both). Insurer Zurich North America noted in a 2023 report that dealerships are a particularly rich target for attackers because “dealerships store large amounts of confidential, personal data, including financing and credit applications, customer financial information and home addresses.”

“In addition,” the report stated, “dealership systems are often interconnected to external interfaces and portals, such as external service providers.”

Ars contacted CDK for comment and will update this post if we receive a response. As of Thursday morning, the firm has not clarified if the “cyber incident” is due to ransomware or another kind of attack.

This post was updated at 2 pm to note a message indicating that CDK’s outage could last several days.

Listing image by Scott Olson / Getty Images

Single point of software failure could hamstring 15K car dealerships for days Read More »

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Ransomware attackers quickly weaponize PHP vulnerability with 9.8 severity rating

Biz & IT, exploits, php, ransomware, Security, vulnerability / /

FILES LOCKED —

TellYouThePass group opportunistically infects servers that have yet to update.

–

Photograph depicts a security scanner extracting virus from a string of binary code. Hand with the word

Getty Images

Ransomware criminals have quickly weaponized an easy-to-exploit vulnerability in the PHP programming language that executes malicious code on web servers, security researchers said.

As of Thursday, Internet scans performed by security firm Censys had detected 1,000 servers infected by a ransomware strain known as TellYouThePass, down from 1,800 detected on Monday. The servers, primarily located in China, no longer display their usual content; instead, many list the site’s file directory, which shows all files have been given a .locked extension, indicating they have been encrypted. An accompanying ransom note demands roughly $6,500 in exchange for the decryption key.

The output of PHP servers infected by TellYouThePass ransomware.

Enlarge / The output of PHP servers infected by TellYouThePass ransomware.

Censys

The accompanying ransom note.

Enlarge / The accompanying ransom note.

Censys

When opportunity knocks

The vulnerability, tracked as CVE-2024-4577 and carrying a severity rating of 9.8 out of 10, stems from errors in the way PHP converts Unicode characters into ASCII. A feature built into Windows known as Best Fit allows attackers to use a technique known as argument injection to convert user-supplied input into characters that pass malicious commands to the main PHP application. Exploits allow attackers to bypass CVE-2012-1823, a critical code execution vulnerability patched in PHP in 2012.

CVE-2024-4577 affects PHP only when it runs in a mode known as CGI, in which a web server parses HTTP requests and passes them to a PHP script for processing. Even when PHP isn’t set to CGI mode, however, the vulnerability may still be exploitable when PHP executables such as php.exe and php-cgi.exe are in directories that are accessible by the web server. This configuration is extremely rare, with the exception of the XAMPP platform, which uses it by default. An additional requirement appears to be that the Windows locale—used to personalize the OS to the local language of the user—must be set to either Chinese or Japanese.

The critical vulnerability was published on June 6, along with a security patch. Within 24 hours, threat actors were exploiting it to install TellYouThePass, researchers from security firm Imperva reported Monday. The exploits executed code that used the mshta.exe Windows binary to run an HTML application file hosted on an attacker-controlled server. Use of the binary indicated an approach known as living off the land, in which attackers use native OS functionalities and tools in an attempt to blend in with normal, non-malicious activity.

In a post published Friday, Censys researchers said that the exploitation by the TellYouThePass gang started on June 7 and mirrored past incidents that opportunistically mass scan the Internet for vulnerable systems following a high-profile vulnerability and indiscriminately targeting any accessible server. The vast majority of the infected servers have IP addresses geolocated to China, Taiwan, Hong Kong, or Japan, likely stemming from the fact that Chinese and Japanese locales are the only ones confirmed to be vulnerable, Censys researchers said in an email.

Since then, the number of infected sites—detected by observing the public-facing HTTP response serving an open directory listing showing the server’s filesystem, along with the distinctive file-naming convention of the ransom note—has fluctuated from a low of 670 on June 8 to a high of 1,800 on Monday.

Image tracking day-to-day compromises of PHP servers and their geolocation.

Enlarge / Image tracking day-to-day compromises of PHP servers and their geolocation.

Censys

Censys researchers said in an email that they’re not entirely sure what’s causing the changing numbers.

“From our perspective, many of the compromised hosts appear to remain online, but the port running the PHP-CGI or XAMPP service stops responding—hence the drop in detected infections,” they wrote. “Another point to consider is that there are currently no observed ransom payments to the only Bitcoin address listed in the ransom notes (source). Based on these facts, our intuition is that this is likely the result of those services being decommissioned or going offline in some other manner.”

XAMPP used in production, really?

The researchers went on to say that roughly half of the compromises observed show clear signs of running XAMPP, but that estimate is likely an undercount since not all services explicitly show what software they use.

“Given that XAMPP is vulnerable by default, it’s reasonable to guess that most of the infected systems are running XAMPP,” the researchers said. This Censys query lists the infections that are explicitly affecting the platform. The researchers aren’t aware of any specific platforms other than XAMPP that have been compromised.

The discovery of compromised XAMPP servers took Will Dormann, a senior vulnerability analyst at security firm Analygence, by surprise because XAMPP maintainers explicitly say their software isn’t suitable for production systems.

“People choosing to run not-for-production software have to deal with the consequences of that decision,” he wrote in an online interview.

While XAMPP is the only platform confirmed to be vulnerable, people running PHP on any Windows system should install the update as soon as possible. The Imperva post linked above provides IP addresses, file names, and file hashes that administrators can use to determine whether they have been targeted in the attacks.

Ransomware attackers quickly weaponize PHP vulnerability with 9.8 severity rating Read More »

ransomware-gangs-are-adopting-“more-brutal”-tactics-amid-crackdowns

Ransomware gangs are adopting “more brutal” tactics amid crackdowns

ransomware, Security, syndication / /
Illustration of a lock on a motherboard

Just_Super via Getty

Today, people around the world will head to school, doctor’s appointments, and pharmacies, only to be told, “Sorry, our computer systems are down.” The frequent culprit is a cybercrime gang operating on the other side of the world, demanding payment for system access or the safe return of stolen data.

The ransomware epidemic shows no signs of slowing down in 2024—despite increasing police crackdowns—and experts worry that it could soon enter a more violent phase.

“We’re definitely not winning the fight against ransomware right now,” Allan Liska, a threat intelligence analyst at Recorded Future, tells WIRED.

Ransomware may be the defining cybercrime of the past decade, with criminals targeting a wide range of victims including hospitals, schools, and governments. The attackers encrypt critical data, bringing the victim’s operation to a grinding halt, and then extort them with the threat of releasing sensitive information. These attacks have had serious consequences. In 2021, the Colonial Pipeline Company was targeted by ransomware, forcing the company to pause fuel delivery and spurring US president Joe Biden to implement emergency measures to meet demand. But ransomware attacks are a daily event around the world—last week, ransomware hit hospitals in the UK—and many of them don’t make headlines.

“There is a visibility problem into incidents; most organizations don’t disclose or report them,” says Brett Callow, a threat analyst at Emsisoft. He adds that this makes it “hard to ascertain which way they are trending” on a month-by-month basis.

Researchers are forced to rely on information from public institutions that disclose attacks, or even criminals themselves. But “criminals are lying bastards,” says Liska.

By all indications, the problem is not going away and may even be accelerating in 2024. According to a recent report by security firm Mandiant, a Google subsidiary, 2023 was a record-breaking year for ransomware. Reporting indicates that victims paid more than $1 billion to gangs—and those are just the payments that we know about.

Ransomware gangs are adopting “more brutal” tactics amid crackdowns Read More »

newly-discovered-ransomware-uses-bitlocker-to-encrypt-victim-data

Newly discovered ransomware uses BitLocker to encrypt victim data

BitLocker, Biz & IT, Encryption, ransomware, Security / /

GOING NATIVE —

ShrinkLocker is the latest ransomware to use Windows’ full-disk encryption.

–

A previously unknown piece of ransomware, dubbed ShrinkLocker, encrypts victim data using the BitLocker feature built into the Windows operating system.

BitLocker is a full-volume encryptor that debuted in 2007 with the release of Windows Vista. Users employ it to encrypt entire hard drives to prevent people from reading or modifying data in the event they get physical access to the disk. Starting with the rollout of Windows 10, BitLocker by default has used the 128-bit and 256-bit XTS-AES encryption algorithm, giving the feature extra protection from attacks that rely on manipulating cipher text to cause predictable changes in plain text.

Recently, researchers from security firm Kaspersky found a threat actor using BitLocker to encrypt data on systems located in Mexico, Indonesia, and Jordan. The researchers named the new ransomware ShrinkLocker, both for its use of BitLocker and because it shrinks the size of each non-boot partition by 100 MB and splits the newly unallocated space into new primary partitions of the same size.

“Our incident response and malware analysis are evidence that attackers are constantly refining their tactics to evade detection,” the researchers wrote Friday. “In this incident, we observed the abuse of the native BitLocker feature for unauthorized data encryption.”

ShrinkLocker isn’t the first malware to leverage BitLocker. In 2022, Microsoft reported that ransomware attackers with a nexus to Iran also used the tool to encrypt files. That same year, the Russian agricultural business Miratorg was attacked by ransomware that used BitLocker to encrypt files residing in the system storage of infected devices.

Once installed on a device, ShrinkLocker runs a VisualBasic script that first invokes the Windows Management Instrumentation and Win32_OperatingSystem class to obtain information about the operating system.

“For each object within the query results, the script checks if the current domain is different from the target,” the Kaspersky researchers wrote. “If it is, the script finishes automatically. After that, it checks if the name of the operating system contains ‘xp,’ ‘2000,’ ‘2003,’ or ‘vista,’ and if the Windows version matches any one of these, the script finishes automatically and deletes itself.”

A screenshot showing initial conditions for execution.

Enlarge / A screenshot showing initial conditions for execution.

Kaspersky

The script then continues to use the WMI for querying information about the OS. It goes on to perform the disk resizing operations, which can vary depending on the OS version detected. The ransomware performs these operations only on local, fixed drives. The decision to leave network drives alone is likely motivated by the desire not to trigger network detection protections.

Eventually, ShrinkLocker disables protections designed to secure the BitLocker encryption key and goes on to delete them. It then enables the use of a numerical password, both as a protector against anyone else taking back control of BitLocker and as an encryptor for system data. The reason for deleting the default protectors is to disable key recovery features by the device owner. ShrinkLocker then goes on to generate a 64-character encryption key using random multiplication and replacement of:

  • A variable with the numbers 0–9;
  • The famous pangram, “The quick brown fox jumps over the lazy dog,” in lowercase and uppercase, which contains every letter of the English alphabet;
  • Special characters.

After several additional steps, data is encrypted. The next time the device reboots, the display looks like this:

Screenshot showing the BitLocker recovery screen.

Enlarge / Screenshot showing the BitLocker recovery screen.

Kaspersky

Decrypting drives without the attacker-supplied key is difficult and likely impossible in many cases. While it is possible to recover some of the passphrases and fixed values used to generate the keys, the script uses variable values that are different on each infected device. These variable values aren’t easy to recover.

There are no protections specific to ShrinkLocker for preventing successful attacks. Kaspersky advises the following:

  • Use robust, properly configured endpoint protection to detect threats that try to abuse BitLocker;
  • Implement Managed Detection and Response (MDR) to proactively scan for threats;
  • If BitLocker is enabled, make sure it uses a strong password and that the recovery keys are stored in a secure location;
  • Ensure that users have only minimal privileges. This prevents them from enabling encryption features or changing registry keys on their own;
  • Enable network traffic logging and monitoring. Configure the logging of both GET and POST requests. In case of infection, the requests made to the attacker’s domain may contain passwords or keys;
  • Monitor for events associated with VBS execution and PowerShell, then save the logged scripts and commands to an external repository storing activity that may be deleted locally;
  • Make backups frequently, store them offline, and test them.

Friday’s report also includes indicators that organizations can use to determine if they have been targeted by ShrinkLocker.

Listing image by Getty Images

Newly discovered ransomware uses BitLocker to encrypt victim data Read More »

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Black Basta ransomware group is imperiling critical infrastructure, groups warn

Biz & IT, black basta, CISA, critical infrastructure, ransomware, Security / /
Black Basta ransomware group is imperiling critical infrastructure, groups warn

Getty Images

Federal agencies, health care associations, and security researchers are warning that a ransomware group tracked under the name Black Basta is ravaging critical infrastructure sectors in attacks that have targeted more than 500 organizations in the past two years.

One of the latest casualties of the native Russian-speaking group, according to CNN, is Ascension, a St. Louis-based health care system that includes 140 hospitals in 19 states. A network intrusion that struck the nonprofit last week ​​took down many of its automated processes for handling patient care, including its systems for managing electronic health records and ordering tests, procedures, and medications. In the aftermath, Ascension has diverted ambulances from some of its hospitals and relied on manual processes.

“Severe operational disruptions”

In an Advisory published Friday, the FBI and the Cybersecurity and Infrastructure Security Agency said Black Basta has victimized 12 of the country’s 16 critical infrastructure sectors in attacks that it has mounted on 500 organizations spanning the globe. The nonprofit health care association Health-ISAC issued its own advisory on the same day that warned that organizations it represents are especially desirable targets of the group.

“The notorious ransomware group, Black Basta, has recently accelerated attacks against the healthcare sector,” the advisory stated. It went on to say: “In the past month, at least two healthcare organizations, in Europe and in the United States, have fallen victim to Black Basta ransomware and have suffered severe operational disruptions.”

Black Basta has been operating since 2022 under what is known as the ransomware-as-a-service model. Under this model, a core group creates the infrastructure and malware for infecting systems throughout a network once an initial intrusion is made and then simultaneously encrypting critical data and exfiltrating it. Affiliates do the actual hacking, which typically involves either phishing or other social engineering or exploiting security vulnerabilities in software used by the target. The core group and affiliates divide any revenue that results.

Recently, researchers from security firm Rapid7 observed Black Basta using a technique they had never seen before. The end goal was to trick employees from targeted organizations to install malicious software on their systems. On Monday, Rapid7 analysts Tyler McGraw, Thomas Elkins, and Evan McCann reported:

Since late April 2024, Rapid7 identified multiple cases of a novel social engineering campaign. The attacks begin with a group of users in the target environment receiving a large volume of spam emails. In all observed cases, the spam was significant enough to overwhelm the email protection solutions in place and arrived in the user’s inbox. Rapid7 determined many of the emails themselves were not malicious, but rather consisted of newsletter sign-up confirmation emails from numerous legitimate organizations across the world.

Example spam email

Enlarge / Example spam email

Rapid7

With the emails sent, and the impacted users struggling to handle the volume of the spam, the threat actor then began to cycle through calling impacted users posing as a member of their organization’s IT team reaching out to offer support for their email issues. For each user they called, the threat actor attempted to socially engineer the user into providing remote access to their computer through the use of legitimate remote monitoring and management solutions. In all observed cases, Rapid7 determined initial access was facilitated by either the download and execution of the commonly abused RMM solution AnyDesk, or the built-in Windows remote support utility Quick Assist.

In the event the threat actor’s social engineering attempts were unsuccessful in getting a user to provide remote access, Rapid7 observed they immediately moved on to another user who had been targeted with their mass spam emails.

Black Basta ransomware group is imperiling critical infrastructure, groups warn Read More »

ransomware-mastermind-lockbitsupp-reveled-in-his-anonymity—now-he’s-been-id’d

Ransomware mastermind LockBitSupp reveled in his anonymity—now he’s been ID’d

Biz & IT, lockbit, operation cronos, ransomware, Security / /

TABLES TURNED —

The US places a $10 million bounty for the arrest of Dmitry Yuryevich Khoroshev.

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Dmitry Yuryevich Khoroshev, aka LockBitSupp

Enlarge / Dmitry Yuryevich Khoroshev, aka LockBitSupp

UK National Crime Agency

Since at least 2019, a shadowy figure hiding behind several pseudonyms has publicly gloated for extorting millions of dollars from thousands of victims he and his associates had hacked. Now, for the first time, “LockBitSupp” has been unmasked by an international law enforcement team, and a $10 million bounty has been placed for his arrest.

In an indictment unsealed Tuesday, US federal prosecutors unmasked the flamboyant persona as Dmitry Yuryevich Khoroshev, a 31-year-old Russian national. Prosecutors said that during his five years at the helm of LockBit—one of the most prolific ransomware groups—Khoroshev and his subordinates have extorted $500 million from some 2,500 victims, roughly 1,800 of which were located in the US. His cut of the revenue was allegedly about $100 million.

Damage in the billions of dollars

“Beyond ransom payments and demands, LockBit attacks also severely disrupted their victims’ operations, causing lost revenue and expenses associated with incident response and recovery,” federal prosecutors wrote. “With these losses included, LockBit caused damage around the world totaling billions of US dollars. Moreover, the data Khoroshev and his LockBit affiliate co-conspirators stole—containing highly sensitive organizational and personal information—remained unsecure and compromised in perpetuity, notwithstanding Khoroshev’s and his co-conspirators’ false promises to the contrary.”

The indictment charges the Russian national with one count of conspiracy to commit fraud, extortion, and related activity in connection with computers, one count of conspiracy to commit wire fraud, eight counts of intentional damage to a protected computer, eight counts of extortion in relation to confidential information from a protected computer, and eight counts of extortion in relation to damage to a protected computer. If convicted, Khoroshev faces a maximum penalty of 185 years in prison.

In addition to the indictment, officials in the US Treasury Department—along with counterparts in the UK and Australia—announced sanctions against Khoroshev. Among other things, the US sanctions allow officials to impose civil penalties on any US person who makes or facilitates payments to the LockBit group. The US State Department also announced a $10 million reward for any information leading to Khoroshev’s arrest and or conviction.

Rooting out LockBit

Tuesday’s actions come 11 weeks after law enforcement agencies in the US and 10 other countries struck a major blow to the infrastructure LockBit members used to operate their ransomware-as-a-service enterprise. Images federal authorities posted to the dark web site where LockBit named and shamed victims indicated they had taken control of /etc/shadow, a Linux file that stores cryptographically hashed passwords. The file, among the most security-sensitive ones in Linux, can be accessed only by a user with root, the highest level of system privileges.

In all, the authorities said in February, they seized control of 14,000 LockBit-associated accounts and 34 servers located in the Netherlands, Germany, Finland, France, Switzerland, Australia, the US, and the UK. Two LockBit suspects were arrested in Poland and Ukraine, and five indictments and three arrest warrants were issued. The authorities also froze 200 cryptocurrency accounts linked to the ransomware operation. The UK’s National Crime Agency on Tuesday said the number of active LockBit affiliates has fallen from 114 to 69 since the February action, named Operation Cronos.

In mid-March, an Ontario, Canada, man convicted on charges for working for LockBit was sentenced to four years in prison. Mikhail Vasiliev, 33 years old at the time of sentencing, was arrested in November 2022 and charged with conspiring to infect protected computers with ransomware and sending ransom demands to victims. He pleaded guilty in February to eight counts of cyber extortion, mischief, and weapons charges.

The real-world identity of Khoroshev’s LockBitSupp alter ego has been hotly sought after for years. LockBitSupp thrived on his anonymity in frequent posts to Russian-speaking hacking forums, where he boasted about the prowess and acumen of his work. At one point, he promised a $10 million reward to anyone who revealed his identity. After February’s operation taking down much of the LockBit infrastructure, prosecutors hinted that they knew who LockBitSupp was but stopped short of naming him.

LockBit has operated since at least 2019 and has also been known under the name “ABCD” in the past. Within three years of its founding, the group’s malware was the most widely circulating ransomware. Like most of its peers, LockBit has operated under what’s known as ransomware-as-a-service, in which it provides software and infrastructure to affiliates who use it to do the actual hacking. LockBit and the affiliates then divide any resulting revenue.

Story updated to correct Khoroshev’s age. Initially the State Department said his date of birth was 17 April 1973. Later, the agency said it was 17 April 1993.

Ransomware mastermind LockBitSupp reveled in his anonymity—now he’s been ID’d Read More »

health-care-giant-comes-clean-about-recent-hack-and-paid-ransom

Health care giant comes clean about recent hack and paid ransom

Biz & IT, Change Healthcare, prescriptions, ransomware, Security / /

HEALTH CARE PROVIDER, HEAL THYSELF —

Ransomware attack on the $371 billion company hamstrung US prescription market.

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Health care giant comes clean about recent hack and paid ransom

Getty Images

Change Healthcare, the health care services provider that recently experienced a ransomware attack that hamstrung the US prescription market for two weeks, was hacked through a compromised account that failed to use multifactor authentication, the company CEO told members of Congress.

The February 21 attack by a ransomware group using the names ALPHV or BlackCat took down a nationwide network Change Healthcare administers to allow healthcare providers to manage customer payments and insurance claims. With no easy way for pharmacies to calculate what costs were covered by insurance companies, payment processors, providers, and patients experienced long delays in filling prescriptions for medicines, many of which were lifesaving. Change Healthcare has also reported that hackers behind the attacks obtained personal health information for a “substantial portion” of the US population.

Standard defense not in place

Andrew Witty, CEO of Change Healthcare parent company UnitedHealth Group, said the breach started on February 12 when hackers somehow obtained an account password for a portal allowing remote access to employee desktop devices. The account, Witty admitted, failed to use multifactor authentication (MFA), a standard defense against password compromises that requires additional authentication in the form of a one-time password or physical security key.

“The portal did not have multi-factor authentication,” Witty wrote in comments submitted before his scheduled testimony on Wednesday to the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations. “Once the threat actor gained access, they moved laterally within the systems in more sophisticated ways and exfiltrated data.” Witty is also scheduled to appear at a separate Wednesday hearing before the Senate Committee on Finance.

Witty didn’t explain why the account, on a portal platform provided by software maker Citrix, wasn’t configured to use MFA. The failure is likely to be a major focus during Wednesday’s hearing.

After burrowing into the Change Healthcare network undetected for nine days, the attackers deployed ransomware that prevented the company from accessing its IT environment. In response, the company severed its connection to its data centers. The company spent the next two weeks rebuilding its entire IT infrastructure “from the ground up.” In the process, it replaced thousands of laptops, rotated credentials, and added new server capacity. By March 7, 99 percent of pre-incident pharmacies were once again able to process claims.

Witty also publicly confirmed that Change Healthcare paid a ransom, a practice that critics say incentivizes ransomware groups who often fail to make good on promises to destroy stolen data. According to communications uncovered by Dmitry Smilyanets, product management director at security firm Recorded Future, Change Healthcare paid $22 million to ALPHV. Principal members of the group then pocketed the funds rather than sharing it with an affiliate group that did the actual hacking, as spelled out in a pre-existing agreement. The affiliate group published some of the stolen data, largely validating a chief criticism of ransomware payments.

“As chief executive officer, the decision to pay a ransom was mine,” Witty wrote. “This was one of the hardest

decisions I’ve ever had to make. And I wouldn’t wish it on anyone.”

Bleeping Computer reported that Change Healthcare may have paid both ALPHV and the affiliate through a group calling itself RansomHub.

Two weeks ago, UnitedHealth Group reported the ransomware attack resulted in a $872 million cost in its first quarter. That amount included $593 million in direct response costs and $279 million in disruptions. Witty’s written testimony added that as of last Friday, his company had advanced more than $6.5 billion in accelerated payments and no-interest, no-fee loans to thousands of providers that were left financially struggling during the prolonged outage. UnitedHealth Care reported $99.8 billion in sales for the quarter. The company had an annual revenue of $371.6 billion in 2023.

Payment processing by Change Healthcare is currently about 86 percent of its pre-incident levels and will increase as the company further restores its systems, Witty said. The number of pharmacies it serves remains a “fraction of a percent” below pre-incident levels.

Health care giant comes clean about recent hack and paid ransom Read More »

missouri-county-declares-state-of-emergency-amid-suspected-ransomware-attack

Missouri county declares state of emergency amid suspected ransomware attack

Biz & IT, hacking, jackson county, ransomware, Security / /

IT SYSTEMS HELD HOSTAGE —

Outage occurs on same day as special election, but election offices remain open.

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Downtown Kansas City, Missouri, which is part of Jackson County.

Enlarge / Downtown Kansas City, Missouri, which is part of Jackson County.

Jackson County, Missouri, has declared a state of emergency and closed key offices indefinitely as it responds to what officials believe is a ransomware attack that has made some of its IT systems inoperable.

“Jackson County has identified significant disruptions within its IT systems, potentially attributable to a ransomware attack,” officials wrote Tuesday. “Early indications suggest operational inconsistencies across its digital infrastructure and certain systems have been rendered inoperative while others continue to function as normal.”

The systems confirmed inoperable include tax and online property payments, issuance of marriage licenses, and inmate searches. In response, the Assessment, Collection and Recorder of Deeds offices at all county locations are closed until further notice.

The closure occurred the same day that the county was holding a special election to vote on a proposed sales tax to fund a stadium for MLB’s Kansas City Royals and the NFL’s Kansas City Chiefs. Neither the Jackson County Board of Elections nor the Kansas City Board of Elections have been affected by the attack; both remain open.

To date, ransomware attacks have hit 28 county, municipal, or tribal governments this year, according to Brett Callow, a threat analyst with security firm Emsisoft. Last year, there were 95; 106 occurred in 2022.

The Jackson County website says there are 654,000 residents in the 607-square-mile county, which includes most of Kansas City, the biggest city in Missouri.

The response to the attack and the investigation into it have just begun, but so far, officials said they had no evidence that data had been compromised.

“We are currently in the early stages of our diagnostic procedures, working closely with our cybersecurity partners to thoroughly explore all possibilities and identify the root cause of the situation,” officials wrote. “While the investigation considers ransomware as a potential cause, comprehensive analyses are underway to confirm the exact nature of the disruption.”

Jackson County Executive Frank White Jr. has issued an executive order declaring a state of emergency.

“The potential significant budgetary impact of this incident may require appropriations from the County’s emergency fund and, if these funds are found to be insufficient, the enactment of additional budgetary adjustments or cuts,” White wrote. “It is directed that all county staff are to take whatever steps are necessary to protect resident data, county assets, and continue essential services, thereby mitigating the impact of this potential ransomware attack.”

The attack first came to attention Tuesday morning, county officials said on Facebook.

The county has notified law enforcement and retained IT security contractors to help investigate and remediate the attack.

“The County recognizes the impact these closures have on its residents,” officials wrote. “We appreciate the community’s patience and understanding during this time and will provide more information as it becomes available.”

Missouri county declares state of emergency amid suspected ransomware attack Read More »

amid-paralyzing-ransomware-attack,-feds-probe-unitedhealth’s-hipaa-compliance

Amid paralyzing ransomware attack, feds probe UnitedHealth’s HIPAA compliance

Change Healthcare, cyberattack, health, HHS, HIPAA, Policy, ransomware, Science, unitedhealth / /

most significant and consequential incident —

UnitedHealth said it will cooperate with the probe as it works to restore services.

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Multistory glass-and-brick building with UnitedHealthcare logo on exterior.

As health systems around the US are still grappling with an unprecedented ransomware attack on the country’s largest health care payment processor, the US Department of Health and Human Services is opening an investigation into whether that processor and its parent company, UnitedHealthcare Group, complied with federal rules to protect private patient data.

The attack targeted Change Healthcare, a unit of UnitedHealthcare Group (UHG) that provides financial services to tens of thousands of health care providers around the country, including doctors, dentists, hospitals, and pharmacies. According to an antitrust lawsuit brought against UHG by the Department of Justice in 2022, 50 percent of all medical claims in the US pass through Change Healthcare’s electronic data interchange clearinghouse. (The DOJ lost its case to prevent UHG’s acquisition of Change Healthcare and last year abandoned plans for an appeal.)

As Ars reported previously, the attack was disclosed on February 21 by UHG’s subsidiary, Optum, which now runs Change Healthcare. On February 29, UHG accused the notorious Russian-speaking ransomware gang known both as AlphV and BlackCat of being responsible. According to The Washington Post, the attack involved stealing patient data, encrypting company files, and demanding money to unlock them. The result is a paralysis of claims processing and payments, causing hospitals to run out of cash for payroll and services and preventing patients from getting care and prescriptions. Additionally, the attack is believed to have exposed the health data of millions of US patients.

Earlier this month, Rick Pollack, the president and CEO of the American Hospital Association, called the ransomware attack on Change Healthcare “the most significant and consequential incident of its kind against the US health care system in history.”

Now, three weeks into the attack, many health systems are still struggling. On Tuesday, members of the Biden administration met with UHG CEO Andrew Witty and other health industry leaders at the White House to demand they do more to stabilize the situation for health care providers and services and provide financial assistance. Some improvements may be in sight; on Wednesday, UHG posted an update saying that “all major pharmacy and payment systems are up and more than 99 percent of pre-incident claim volume is flowing.”

HIPAA compliance

Still, the data breach leaves big questions about the extent of the damage to patient privacy, and the adequacy of protections moving forward. In an additional development Wednesday, the health department’s Office for Civil Rights (OCR) announced that it is opening an investigation into UHG and Change Healthcare over the incident. It noted that such an investigation was warranted “given the unprecedented magnitude of this cyberattack, and in the best interest of patients and health care providers.”

In a “Dear Colleague” letter dated Wednesday, the OCR explained that the investigation “will focus on whether a breach of protected health information occurred and Change Healthcare’s and UHG’s compliance with the HIPAA Rules.” HIPAA is the Health Insurance Portability and Accountability Act, which establishes privacy and security requirements for protected health information, as well as breach notification requirements.

In a statement to the press, UHG said it would cooperate with the investigation. “Our immediate focus is to restore our systems, protect data and support those whose data may have been impacted,” the statement read. “We are working with law enforcement to investigate the extent of impacted data.”

The Post notes that the federal government does have a history of investigating and penalizing health care organizations for failing to implement adequate safeguards to prevent data breaches. For instance, health insurance provider Anthem paid a $16 million settlement in 2020 over a 2015 data breach that exposed the private data of almost 79 million people. The exposed data included names, Social Security numbers, medical identification numbers, addresses, dates of birth, email addresses, and employment information. The OCR investigation into the breach discovered that the attack began with spear phishing emails that at least one employee of an Anthem subsidiary fell for, opening the door to further intrusions that went undetected between December 2, 2014, and January 27, 2015.

“Unfortunately, Anthem failed to implement appropriate measures for detecting hackers who had gained access to their system to harvest passwords and steal people’s private information,” OCR Director Roger Severino said at the time. “We know that large health care entities are attractive targets for hackers, which is why they are expected to have strong password policies and to monitor and respond to security incidents in a timely fashion or risk enforcement by OCR.”

Amid paralyzing ransomware attack, feds probe UnitedHealth’s HIPAA compliance Read More »

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After collecting $22 million, AlphV ransomware group stages FBI takedown

alphv, Biz & IT, blackcat, exit scam, ransomware, Security / /
A ransom note is plastered across a laptop monitor.

The ransomware group responsible for hamstringing the prescription drug market for two weeks has suddenly gone dark, just days after receiving a $22 million payment and standing accused of scamming an affiliate out of its share of the loot.

The events involve AlphV, a ransomware group also known as BlackCat. Two weeks ago, it took down Change Healthcare, the biggest US health care payment processor, leaving pharmacies, health care providers, and patients scrambling to fill prescriptions for medicines. On Friday, the bitcoin ledger shows, the group received nearly $22 million in cryptocurrency, stoking suspicions the deposit was payment by Change Healthcare in exchange for AlphV decrypting its data and promising to delete it.

Representatives of Optum, the parent company, declined to say if the company has paid AlphV.

Honor among thieves

On Sunday, two days following the payment, a party claiming to be an AlphV affiliate said in an online crime forum that the nearly $22 million payment was tied to the Change Healthcare breach. The party went on to say that AlphV members had cheated the affiliate out of the agreed-upon cut of the payment. In response, the affiliate said it hadn’t deleted the Change Healthcare data it had obtained.

A message left in a crime forum from a party claiming to be an AlphV affiliate. The post claims AlphV scammed the affiliate out of its cut.

Enlarge / A message left in a crime forum from a party claiming to be an AlphV affiliate. The post claims AlphV scammed the affiliate out of its cut.

vxunderground

On Tuesday—four days after the bitcoin payment was made and two days after the affiliate claimed to have been cheated out of its cut—AlphV’s public dark web site started displaying a message saying it had been seized by the FBI as part of an international law enforcement action.

The AlphV extortion site as it appeared on Tuesday.

Enlarge / The AlphV extortion site as it appeared on Tuesday.

The UK’s National Crime Agency, one of the agencies the seizure message said was involved in the takedown, said the agency played no part in any such action. The FBI, meanwhile, declined to comment. The NCA denial, as well as evidence the seizure notice was copied from a different site and pasted into the AlphV one, has led multiple researchers to conclude the ransomware group staged the takedown and took the entire $22 million payment for itself.

“Since people continue to fall for the ALPHV/BlackCat cover up: ALPHV/BlackCat did not get seized,” Fabian Wosar, head of ransomware research at security firm Emsisoft, wrote on social media. “They are exit scamming their affiliates. It is blatantly obvious when you check the source code of the new takedown notice.”

After collecting $22 million, AlphV ransomware group stages FBI takedown Read More »

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US prescription market hamstrung for 9 days (so far) by ransomware attack

alphv, Biz & IT, critical infrastructure, healthcare, ransomware, Security / /

RX CHAOS —

Patients having trouble getting lifesaving meds have the AlphV crime group to thank.

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US prescription market hamstrung for 9 days (so far) by ransomware attack

Getty Images

Nine days after a Russian-speaking ransomware syndicate took down the biggest US health care payment processor, pharmacies, health care providers, and patients were still scrambling to fill prescriptions for medicines, many of which are lifesaving.

On Thursday, UnitedHealth Group accused a notorious ransomware gang known both as AlphV and Black Cat of hacking its subsidiary Optum. Optum provides a nationwide network called Change Healthcare, which allows health care providers to manage customer payments and insurance claims. With no easy way for pharmacies to calculate what costs were covered by insurance companies, many had to turn to alternative services or offline methods.

The most serious incident of its kind

Optum first disclosed on February 21 that its services were down as a result of a “cyber security issue.” Its service has been hamstrung ever since. Shortly before this post went live on Ars, Optum said it had restored Change Healthcare services.

“Working with technology and business partners, we have successfully completed testing with vendors and multiple retail pharmacy partners for the impacted transaction types,” an update said. “As a result, we have enabled this service for all customers effective 1 pm CT, Friday, March 1, 2024.”

AlphV is one of many syndicates that operates under a ransomware-as-a-service model, meaning affiliates do the actual hacking of victims and then use the AlphV ransomware and infrastructure to encrypt files and negotiate a ransom. The parties then share the proceeds.

In December, the FBI and its equivalent in partner countries announced they had seized much of the AlphV infrastructure in a move that was intended to disrupt the group. AlphV promptly asserted it had unseized its site, leading to a tug-of-war between law enforcement and the group. The crippling of Change Healthcare is a clear sign that AlphV continues to pose a threat to critical parts of the US infrastructure.

“The cyberattack against Change Healthcare that began on Feb. 21 is the most serious incident of its kind leveled against a US health care organization,” said Rick Pollack, president and CEO of the American Hospital Association. Citing Change Healthcare data, Pollack said that the service processes 15 billion transactions involving eligibility verifications, pharmacy operations, and claims transmittals and payments. “All of these have been disrupted to varying degrees over the past several days and the full impact is still not known.”

Optum estimated that as of Monday, more than 90 percent of roughly 70,000 pharmacies in the US had changed how they processed electronic claims as a result of the outage. The company went on to say that only a small number of patients have been unable to get their prescriptions filled.

The scale and length of the Change Healthcare outage underscore the devastating effects ransomware has on critical infrastructure. Three years ago, members affiliated with a different ransomware group known as Darkside caused a five-day outage of Colonial Pipeline, which delivered roughly 45 percent of the East Coast’s petroleum products, including gasoline, diesel fuel, and jet fuel. The interruption caused fuel shortages that sent airlines, consumers, and filling stations scrambling.

Numerous ransomware groups have also taken down entire hospital networks in outages that in some cases have threatened patient care.

AlphV has been a key contributor to the ransomware menace. The FBI said in December the group had collected more than $300 million in ransoms. One of the better-known victims of AlphV ransomware was Caesars Entertainment and casinos owned by MGM, which brought operations in many Las Vegas casinos to a halt. A group of mostly teenagers is suspected of orchestrating that breach.

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Ransomware associated with LockBit still spreading 2 days after server takedown

Biz & IT, connectwise, lockbit, ransomware, screenconnect, Security / /

LINGERING RANSOMWARE MENACE —

LockBit’s extensive reach is making complete erasure hard.

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A stylized skull and crossbones made out of ones and zeroes.

Two days after an international team of authorities struck a major blow at LockBit, one of the Internet’s most prolific ransomware syndicates, researchers have detected a new round of attacks that are installing malware associated with the group.

The attacks, detected in the past 24 hours, are exploiting two critical vulnerabilities in ScreenConnect, a remote desktop application sold by Connectwise. According to researchers at two security firms—SophosXOps and Huntress—attackers who successfully exploit the vulnerabilities go on to install LockBit ransomware and other post-exploit malware. It wasn’t immediately clear if the ransomware was the official LockBit version.

“We can’t publicly name the customers at this time but can confirm the malware being deployed is associated with LockBit, which is particularly interesting against the backdrop of the recent LockBit takedown,” John Hammond, principal security researcher at Huntress, wrote in an email. “While we can’t attribute this directly to the larger LockBit group, it is clear that LockBit has a large reach that spans tooling, various affiliate groups, and offshoots that have not been completely erased even with the major takedown by law enforcement.”

Hammond said the ransomware is being deployed to “vet offices, health clinics, and local governments (including attacks against systems related to 911 systems).”

Muddying the attribution waters

SophosXOps and Huntress didn’t say if the ransomware being installed is the official LockBit version or a version leaked by a disgruntled LockBit insider in 2022. The leaked builder has circulated widely since then and has touched off a string of copycat attacks that aren’t part of the official operation.

“When builds are leaked, it can also muddy the waters with regards to attribution,” researchers from security firm Trend Micro said Thursday. “For example, in August 2023, we observed a group that called itself the Flamingo group using a leaked LockBit payload bundled with the Rhadamanthys stealer. In November 2023, we found another group, going by the moniker Spacecolon, impersonating LockBit. The group used email addresses and URLs that gave victims the impression that they were dealing with LockBit.”

SophosXOps said only that it had “observed several LockBit attacks.” A company spokesperson said no other details were available. Hammond said the malware was “associated with” the ransomware group and wasn’t immediately able to confirm if the malware was the official version or a knockoff.

The attacks come two days after officials in the UK, US, and Europol announced a major disruption of LockBit. The action included seizing control of 14,000 accounts and 34 servers, arresting two suspects, and issuing five indictments and three arrest warrants. Authorities also froze 200 cryptocurrency accounts linked to the ransomware operation. The actions came after investigators hacked and took control of the LockBit infrastructure.

Authorities said LockBit has extorted more than $120 million from thousands of victims around the world, making it among the world’s most active ransomware groups. Like most other ransomware groups, LockBit operates under a ransomware-as-a-service model, in which affiliates share the revenue they generate in exchange for using the LockBit ransomware and infrastructure.

Given the sheer number of affiliates and their broad geographic and organizational distribution, it’s often not feasible for all of them to be neutralized in actions like the one announced Tuesday. It’s possible that some affiliates remain operational and want to signal that the ransomware franchise will continue in one form or another. It’s also possible that the infections SophosXOps and Huntress are seeing are the work of an unaffiliated group of actors with other motivations.

Besides installing the LockBit-associated ransomware, Hammond said, the attackers are installing several other malicious apps, including a backdoor known as Cobalt Strike, cryptocurrency miners, and SSH tunnels for remotely connecting to compromised infrastructure.

The ScreenConnect vulnerabilities are under mass exploitation and are tracked as CVE-2024-1708 and CVE-2024-1709. ConnectWise has made patches available for all vulnerable versions, including those no longer actively supported.

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