Our research group has discovered a Zeus botnet that is targeting credit card accounts of major U.S. retailers, including Macy’s and Nordstrom, just as the holiday gift-buying season is in full swing. We captured and analyzed malware samples that were designed to steal credit card information likely to conduct card-not-present (CNP) fraud. This attack is using a Zeus 2.1.0.8 botnet, the latest and most sophisticated version of the Zeus malware platform.

CNP Fraud

CNP fraud refers to transactions in which a credit card is not physically present, as in an Internet, mail or phone purchase. It is difficult for a merchant to verify that the actual cardholder is indeed authorizing the purchase, so card issuers tend to charge merchants higher fees for CNP transactions. To make matters worse, merchants are typically responsible for fraudulent CNP transactions. Therefore, CNP merchants must take extra precautions against fraud exposure and associated losses.

The attack we discovered uses social engineering to gather additional information beyond the credit card number that makes it easier for the criminal to bypass fraud detection measures used to investigate suspicious transactions. In this case, the social engineering method used is very credible because the victim has navigated to the card issuer’s website — www.macys.com and www.nordstromcard.com — when Zeus injects a seemingly legitimate Man in the Middle (MitM) pop-up that requests personally identifiable information.

Major US Retailers Need Major Upgrades

Merchants and card issuers invest a great deal in back-end technologies for detecting fraudulent transactions. These systems represent an important security layer, but the increase in malware and phishing attacks that specifically target card information is making them less effective. In response, an additional layer that can prevent card information from being stolen in the first place is now required. As this latest Zeus configuration demonstrates, criminals are constantly changing and refining their attack methods. Although merchants and card issuers of major U.S. retailers can’t adapt their security infrastructure as quickly as criminal groups can modify their attacks, they need to identify and accept when current protection methods are no longer sufficient and refresh their defense mechanisms accordingly.