Digital Bait

DIGITAL BAIT HOW CONTENT THEFT SITES AND MALWARE ARE EXPLOITED BY CYBERCRIMINALS TO HACK INTO INTERNET USERS’ COMPUTERS AND PERSONAL DATA DECEMBER 2015 TABLE OF CONTENTS INTRODUCTION AND SUMMARY .............................................................................................................1-2 OBJECTIVES AND METHODOLOGY ......................................................................................................3-5 Objectives ........................................................................................................................................................................ 3 Quantitative Study Methodology Overview .................................................................................. 3 Sample Design ........................................................................................................................................................... 3 Control Group Design ...........................................................................................................................................4 Data Collection ............................................................................................................................................................4 Data Availability ...........................................................................................................................................................4 Profile of a Crimeware Distribution Network ..................................................................................5 QUANTITATIVE FINDINGS ................................................................................................................................6-7 Sites with Malware Incidents ........................................................................................................................ 6 Malware Incident Rates for Users Visiting These Sites ....................................................... 6 How Malware is Delivered .............................................................................................................................. 6 Types of Malware ..................................................................................................................................................... 6 Estimated Number of Consumers Affected ...................................................................................7 THE INTERNET'S MOST DANGEROUS INTERSECTION: CONTENT THEFT AND MALWARE .......................................................................................................8-16 Malware and Its Many Types ........................................................................................................................ 8 Threats to Consumers .......................................................................................................................................10 Malware Fraud Schemes Against Consumers .........................................................................12 Threats to Advertisers........................................................................................................................................13 How Malvertising Works ................................................................................................................................. 14 Malware Fraud Schemes Against Advertisers .......................................................................... 14 Threats to Society .................................................................................................................................................. 15 Malware Fraud Schemes Against Society ....................................................................................16 DIGITAL BAIT i TABLE OF CONTENTS UNDERSTANDING THE "CRIMEWARE" ECONOMY ............................................................17-18 The DarkNet .................................................................................................................................................................17 Inside the DarkNet .................................................................................................................................................17 The Professional Hacker ..................................................................................................................................17 Crimeware Specialization ...............................................................................................................................18 PROFILE OF A CRIMEWARE DISTRIBUTION NETWORK ...........................................19-23 Crimeware and Affiliate Programs .........................................................................................................19 How One Affiliate Program Works ........................................................................................................20 Payouts ............................................................................................................................................................................22 Affiliate Earnings .....................................................................................................................................................23 REVENUE MODEL ..............................................................................................................................................24-25 Pay-Per=Install Rates ...........................................................................................................................................24 Estimated Malware Exposures .................................................................................................................24 Estimated Install Rate ........................................................................................................................................24 Revenue From Malware ..................................................................................................................................24 Estimating Potential Malware-Related Revenue ................................................................... 25 CONCLUSION ..................................................................................................................................................................26 ABOUT DIGITAL CITIZENS ALLIANCE .....................................................................................................27 ABOUT RISKIQ ................................................................................................................................................................28 APPENDIX ...................................................................................................................................................................29-33 REFERENCES ...................................................................................................................................................................34 DIGITAL BAIT ii INTRODUCTION AND SUMMARY Content theft, or piracy as it’s commonly known, the spread of malicious materials to the comput- poses a serious and underappreciated threat to In- ers of unsuspecting consumers. Content thieves ternet users by exposing them to harmful malware are no longer satisfied with targeting creators, not that can lead to identity theft, financial loss, and when there is big money to be made from preying computers being taken over by hackers, according on consumers as well. to a new report commissioned by the Digital Citi- zens Alliance. After its two “Good Money Going Bad” reports explored the business models behind ad-sup- Probing a sample of 800 sites dedicated to dis- ported content theft sites, DCA commissioned tributing stolen movies and television shows, the RiskIQ, a leading provider of online security and ad cyber security firm RiskIQ found thatone out of ev- monitoring services, to estimate the amount and ery three content theft sites contained malware. type of malware that content theft sites carry and to explore the connection between content theft The study found that consumers are 28 times and malware ecosystems in the dark corners of more likely to get malware from a content theft site the Internet. than on similarly visited mainstream websites or li- censed content providers. What RiskIQ found should be troubling to any- one concerned about keeping Internet users safe And just as worrisome, merely visiting a content online. The research found that once hackers get theft site can place a users’ computer at risk: 45 into a computer, they can use it for a wide range of percent of the malware was delivered through so- criminal schemes where the user of the computer called “drive-by downloads” that invisibly download is the victim. to the user’s computer—without requiring them to click on a link. These include: > Stealing bank and credit card information While content theft has long been wounding cre- that is then sold on underground Internet ex- ators large and small, the RiskIQ report shows that changes. After the hack, consumers find their the base of victims includes the unwitting Internet bank accounts depleted or suspicious charges users who go to content theft sites for “free” content. on their credit cards. There is an underground market for credit card information that ranges By exploiting stolen content to bait mainstream from $2 to $135 per credit card credential. consumers, bad actors have uncovered an effec- > Finding personal information that makes it tive means to hack into millions

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