Crooks can make $5M a year shilling fake security software

Scareware affiliate operation may also be a money-laundering front, says researcher

Criminals can make as much as US$5 million a year by planting nearly-worthless security software on PCs, then badgering users with so many bogus malware warnings that they fork over their credit card, a noted crimeware researcher said Friday.

That's the estimate of the annual income a dedicated crook could earn by pumping fake anti-virus software, dubbed "scareware" by some, said Joe Stewart, director of malware research at SecureWorks.

Stewart led an investigation into a Russian-based operation where affiliate members seed PCs with Antivirus XP 2008, recently renamed Antivirus XP 2009, then reap commissions of up to 90 percent on the software's US$40 to $50 price tag. The program is virtually worthless, able to spot only a handful actual threats.

After convincing a real cybercrook to provide a recommendation to an affiliate program dubbed "Bakasoftware," Stewart accessed records that showed some members pulled in as much as US$146,000 in just 10 days.

"We were able to convince another affiliate [of our bonafides], and got an invitation that let us see the back end of the affiliate site, and see how the promotion works," Stewart explained. Although the Bakasoftware program had been known to researchers, there had been little, if any, analysis done on its operation, since the program's site is in Russian and the invitation-only requirement for new memberships meant it was easy for the criminals to keep outsiders at arm's length.

During SecureWorks' investigation, Stewart also stumbled across messages posted on Russian forums by a hacker calling himself "NeoN," who claimed to have broken into the Bakasoftware administrative server. NeoN posted evidence that Bakasoftware affiliate members had raked in between US$75,000 and $158,000 in one week.

NeoN tried to steal from the crooks, said Stewart, but was blocked. Soon after that, however, Bakasoftware's administrator, a user pegged only as "kreb," changed members' access passwords.

Bogus anti-virus programs are not a new criminal tactic, but using them to collect money from naive users has been on a major upswing. The increase, in turn, has prompted reactions from some technology companies. Just last month, for instance, Microsoft joined the attorney general of Washington state to file several lawsuits against suspected scareware distributors.

"This is a huge moneymaker in the underground," Stewart said. "It carries little risk, because they're not out and out stealing credit cards or bank account details. So even if law enforcement finds out about them, they're not going to be first on the list."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags hackers

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Gregg Keizer

Computerworld
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?