By Luke Rodeheffer and Mike Mimoso
Most often, headlines fixate only on the loss of sensitive personal data and payment card information in the wake of a data breach. There is another—and often ignored—piece to this segment of the underground economy: cashing out by criminals, in particular through fraudulent purchases.
A network of illicit communities support this part of the theft and fraud lifecycle, and offer a range services that include the creation of shipping labels that are processed properly almost every time, to a collection of sometimes unwitting mules and drop networks that buffer the buyer and seller from law enforcement.
Criminals continue to find success monetising compromised payment system information and personal data in this way, using sophisticated networks of people and techniques to process a large volume of stolen goods on a daily basis.
Fraudulent Shipping Labels 99.9 Percent Effective.
Cashing out of carded goods, meanwhile, initiates through private interactions on dark web forums rarely seen by the public. Some drop networks also prepare shipping labels as part of their service, an indicator that the threat actors also have access to accounts belonging to major commercial and public-sector shipping services.
Using the access afforded by those accounts and the shipping services’ APIs, criminals are able to produce thousands of labels for customers; one recent review on an underground site raved that 99.9 percent of the labels were processed properly, ensuring that stolen goods reached the buyer or the drop network. Cybercriminals often use drop networks to obfuscate the destination and/or origin of stolen funds, or fraudulently purchased goods
The fraudulent labels are a key part of this process. One underground service allows customers to create labels and distributes them as PDFs to customers, who then send the labels to mules in the drop network. The mules will use these labels to ship carded goods to buyers or other drops on the network for resale in online marketplaces, including Amazon and eBay. The labels play an important role in the shipping of fraudulently purchased items, a method by which many cybercriminals monetise compromised accounts.
Many of these label-creation services are also run by threat actors proficient in account takeover and offer the label service as a means of monetising stolen account information belonging to individuals with accounts at major banks, retailers, or telecommunications providers.
Recruiting (Unwitting) Mules via Spam.
The individuals, meanwhile, who process the stolen goods may not always be aware they are working for an illegal enterprise; many may believe they’re working for a legitimate shipping business, which could in reality be just a shell company. They may be recruited on trustworthy job-posting sites or through spam campaigns depending on whether the threat actor has a relationship with a spammer operating on the underground.
Many threat actors do cooperate with spammers and botnet operators who may be recruited in order to spread malware and exploits used in account takeover attacks. Some drop networks operating on the Eastern European cybercriminal underground have been linked to spam campaigns actively recruiting mules in the United States and Europe. Some drop networks observed by Flashpoint analysts include sites registered to companies in U.S. states.
There is a relatively high success rate with this type of fraud as threat actors learn how to sidestep anti-fraud systems of the retail site they may be targeting and the tools they’re using to obtain stolen account information. Some underground sites keep statistics on transactions that show a high volume of stolen goods shipped regularly.
Flashpoint assesses that these drop networks will likely continue to aggressively recruit mules and target financial services institutions, telecommunications companies, and retailers of consumer technology and/or electronics goods with account takeover. Label-creation services, meanwhile, will continue to be a valuable add-on for criminals with access to accounts belonging to private- and public-sector shipping services.