Mobile malware shifting to SMS fraud

Apps secretly bill victims for premium text services

As the business of mobile malware evolves, a significant number of criminals have settled on apps that secretly bill victims for premium text services, a new study shows.

The future of malawre

Cybercrime associated with mobile viruses is a relatively young enterprise, so business models are still evolving. However, in its annual State of Mobile Security report, Lookout found that SMS fraud, known as toll fraud, has grown steadily since July 2011.

The new name in fraud has become the top threat globally in the first quarter of this year, accounting for 62% of all application-based threats at the end of the first half of the year. Before toll fraud, spyware was the biggest threat on mobile phones.

[See related: Vendor cybercrime report in the hot seat again]

Since the discovery of the first mobile virus in 2004, criminals have been experimenting with a variety of business models.

"When we look back at the last 12 months, there's a really, really big indication that certain types of malware developers have found a business model that works for them," said Derek Halliday, a security researcher at Lookout, said. "And these indicators include an overabundance of a certain type of malware family that we refer to as toll fraud."

That business model has become popular primarily in Eastern Europe and Russia, where regulation of premium services is weak and mobile app stores are not closely monitored. In fact those regions, along with the Ukraine and China, comprised the majority of new malware infections, the report found. In the U.S., the rate of infection was less than 1%.

In the U.S., the biggest threat comes from people clicking on malicious links sent via text message or found on a mobile website. Cybercriminals using these types of attacks are typically looking to have people provide personal information that can be used in identity theft.

Based on its own customers' activity, Lookout predicts four in 10 U.S. mobile users will click on an unsafe link this year.

In a separate report on Internet security threats, Symantec found that more than three in 10 mobile users would receive a text message from a stranger requesting that they click on an embedded link or dial an unknown number.

Symantec also found in 2011 that two-thirds of adults in the 24 countries it tracks in Europe, North America, South America, Asia and the Middle East use mobile devices to access the Web. At the same time, the number of vulnerabilities in devices doubled from 2010.

In general, Android smartphone users are much more vulnerable to attacks than people who use Apple's iPhone. That's because Apple vets apps before making them available through the company's App Store, which is the only legitimate site for iPhone software.

Overall, most mobile users are not aware of the growing security risk with their devices. Two in three users do not use any security, and 44% are unaware that protective technology exists, Symantec said.

Global cybercrime last year, including mobile devices and personal computers, cost consumers $110 billion, while the number of victims reached 556 million, Symantec said.

Read more about wireless/mobile security in CSOonline's Wireless/Mobile Security section.

This story, "Mobile malware shifting to SMS fraud" was originally published by CSO.

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