An Analysis of Reshipping Mule Scams

Credit cards are a popular target for cybercriminals. Miscreants infect victim computers with malware that reports back to their command and control servers any credit card information that the user inserts in her computer, or compromise large retail stores stealing their customers’ credit card information. After obtaining credit card details from their victims, cybercriminals face the problem of monetising such information. As we recently covered on this blog, cybercriminals monetise stolen credit cards by cloning them and using very clever tricks to bypass the Chip and PIN verification mechanisms. This way they are able to use the counterfeit credit card in a physical store, purchase expensive items such as cigarettes, and re-sell them for a profit.

Another possible way for cybercriminals to monetise stolen credit cards is by purchasing goods on online stores. To this end, they need more information than the one contained on the credit card alone: for those of you who are familiar with online shopping, some merchants require a billing address as well to allow the purchase (which is called “card not present transaction”). This additional information is often available to the criminal – it might, for example, have been retrieved together with the credit card credentials as part of a data breach against an online retailer. When purchasing goods online, cybercriminals face the issue of shipping: if they shipped the stolen goods to their home address, this would make it easy for law enforcement to find and arrest them. For this reason, miscreants need intermediaries in the shipping process.

In our recent paper, which was presented at the ACM Conference on Computer and Communications Security (CCS), we analyse a criminal scheme designed to help miscreants who wish to monetise stolen credit cards as we described: A cybercriminal (called operator) recruits unsuspecting citizens with the promise of a rewarding work-from-home job. This job involves receiving packages at home and having to re-ship them to a different address, provided by the operator. By accepting the job, people unknowingly become part of a criminal operation: the packages that they receive at their home contain stolen goods, and the shipping destinations are often overseas, typically in Russia. These shipping agents are commonly known as reshipping mules (or drops for stuff in the underground community). The operator then rents shipping mules as a service to cybercriminals wanting to ship stolen goods abroad. The cybercriminals taking advantage of such services are known as stuffers in the underground community. As a price for the service, the stuffer will pay a commission to the operator for each package reshipped through the service.


In collaboration with the FBI and the United States Postal Inspection Service (USPIS) we conducted a study on such reshipping scam sites. This study involved data coming from seven different reshipping sites, and provides the research community with invaluable insights on how these operations are run. We observed that the vast majority of the re-shipped packages end up in the Moscow, Russia area, and that the goods purchased with stolen credit cards span multiple categories, from expensive electronics such as Apple products, to designer clothes, to DSLR cameras and even weapon accessories. Given the amount of goods shipped by the reshipping mule sites that we analysed, the annual revenue generated from such operations can span between 1.8 and 7.3 million US dollars. The overall losses are much higher though: the online merchant loses an expensive item from its inventory and typically has to refund the owner of the stolen credit card. In addition, the rogue goods typically travel labeled as “second hand goods” and therefore custom taxes are also evaded. Once the items purchased with stolen credit cards reach their destination they will be sold on the black market by cybercriminals.

Studying the management of the mules lead us to some surprising findings. When applying for the job, people are usually required to send the operator copies of their ID cards and passport. After they are hired, mules are promised to be paid at the end of their first month of employment. However, from our data it is clear that mules are usually never paid. After their first month expires, they are never contacted back by the operator, who just moves on and hires new mules. In other words, the mules become victims of this scam themselves, by never seeing a penny. Moreover, because they sent copies of their documents to the criminals, mules can potentially become victims of identity theft.

Our study is the first one shedding some light on these monetisation schemes linked to credit card fraud. We believe the insights in this paper can provide law enforcement and researchers with a better understanding of the cybercriminal ecosystem and allow them to develop more effective mitigation techniques against these problems.

George Danezis – Smart grid privacy, peer-to-peer and social network security

“I work on technical aspects of privacy,” says George Danezis, a reader in security and privacy engineering at UCL and part of the Academic Centre of Excellence in Cyber Security Research (ACE-CSR). There are, of course, many other limitations: regulatory, policy, economic. But, he says, “Technology is the enabler for everything else – though you need everything else for it to be useful.” Danezis believes providing privacy at the technology level is particularly important as it seems clear that both regulation and the “moralising” approach (telling people the things they shouldn’t do) have failed.

There are many reasons why someone gets interested in researching technical solutions to intractable problems. Sometimes the motivation is to eliminate a personal frustration; other times it’s simply a fascination with the technology itself. For Danezis, it began with other people.

“I discovered that a lot of the people around me could not use technology out of the box to do things personally or collectively.” For example, he saw NGOs defending human rights worry about sending an email or chatting online, particularly in countries hostile to their work. A second motivation had to do with timing: when he began work it wasn’t yet clear that the Internet would develop into a medium anyone could use freely to publish stories. That particular fear has abated, but other issues such as the need for anonymous communications and private data sharing are still with us.

“Without anonymity we can’t offer strong privacy,” he says.

Unlike many researchers, Danezis did not really grow up with computers. He spent his childhood in Greece and Belgium, and until he got Internet access at 16, “I had access only to the programming books I could find in an average Belgian bookshop. There wasn’t a BBC Micro in every school and it was difficult to find information. I had one teacher who taught me how to program in Logo, and no way of finding more information easily.” Then he arrived at Cambridge in 1997, and “discovered thousands of people who knew how to do crazy stuff with computers.”

Danezis’ key research question is, “What functionality can we achieve while still attaining a degree of hard privacy?” And the corollary: at what cost in complexity of engineering? “We can’t just say, let’s recreate the whole computer environment,” he said. “We need to evolve efficiently out of today’s situation.”

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Just how sophisticated will card fraud techniques become?

In late 2009, my colleagues and I discovered a serious vulnerability in EMV, the most widely used standard for smart card payments, known as “Chip and PIN” in the UK. We showed that it was possible for criminals to use a stolen credit or debit card without knowing the PIN, by tricking the terminal into thinking that any PIN is correct. We gave the banking industry advance notice of our discovery in early December 2009, to give them time to fix the problem before we published our research. After this period expired (two months, in this case) we published our paper as well explaining our results to the public on BBC Newsnight. We demonstrated that this vulnerability was real using a proof-of-concept system built from equipment we had available (off-the shelf laptop and card reader, FPGA development board, and hand-made card emulator).

No-PIN vulnerability demonstration

After the programme aired, the response from the banking industry dismissed the possibility that the vulnerability would be successfully exploited by criminals. The banking trade body, the UK Cards Association, said:

“We believe that this complicated method will never present a real threat to our customers’ cards. … Neither the banking industry nor the police have any evidence of criminals having the capability to deploy such sophisticated attacks.”

Similarly, EMVCo, who develop the EMV standards said:

“It is EMVCo’s view that when the full payment process is taken into account, suitable countermeasures to the attack described in the recent Cambridge Report are already available.”

It was therefore interesting to see that in May 2011, criminals were caught having stolen cards in France then exploiting a variant of this vulnerability to buy over €500,000 worth of goods in Belgium (which were then re-sold). At the time, not many details were available, but it seemed that the techniques the criminals used were much more sophisticated than our proof-of-concept demonstration.

We now know more about what actually happened, as well as the banks’ response, thanks to a paper by the researchers who performed the forensic analysis that formed part of the criminal investigation of this case. It shows just how sophisticated criminals could be, given sufficient motivation, contrary to the expectations in the original banking industry response.

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Gianluca Stringhini – Cyber criminal operations and developing systems to defend against them

Gianluca Stringhini’s research focuses on studying cyber criminal operations and developing systems to defend against them.

Such operations tend to follow a common pattern. First the criminal operator lures a user into going to a Web site and tries to infect them with malware. Once infected, the user is joined to a botnet. From there, the user’s computer is instructed to perform malicious activities on the criminal’s behalf. Stringhini, whose UCL appointment is shared between the Department of Computer Science and the Department of Security and Crime Science, has studied all three of these stages.

Stringhini, who is from Genoa, developed his interest in computer security at college: “I was doing the things that all college students are doing, hacking, and breaking into systems. I was always interested in understanding how computers work and how one could break them. I started playing in hacking competitions.”

At the beginning, these competitions were just for fun, but those efforts became more serious when he arrived in 2008 at UC Santa Barbara, which featured one of the world’s best hacking teams, a perennial top finisher in Defcon’s Capture the Flag competition. It was at Santa Barbara that his interest in cyber crime developed, particularly in botnets and the complexity and skill of the operations that created them. He picked the US after Christopher Kruegel, whom he knew by email, invited him to Santa Barbara for an internship. He liked it, so he stayed and did a PhD studying the way criminals use online services such as social networks

“Basically, the idea is that if you have an account that’s used by a cyber criminal it will be used differently than one used by a real person because they will have a different goal,” he says. “And so you can develop systems that learn about these differences and detect accounts that are misused.” Even if the attacker tries to make their behaviour closely resemble the user’s own, ultimately spreading malicious content isn’t something normal users intend to do, and the difference is detectable.

This idea and Stringhini’s resulting PhD research led to his most significant papers to date.

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