Fraud is and always will be a cornerstone of the cybercrime community. The associated economic gains provide substantial motivation for today’s malicious actors, which is reflected in the rampant use of identity and financial theft, and ad fraud. Fraud is, without question, big business. You don’t have to look far to find websites, on both the clear and the darknet, that profit from the sale of your personal information.

Fraud-related cyber criminals are employing an evolving arsenal of tactics and malware designed to engage in these types of activities. What follows is an overview.

Digital Fraud

Digital fraud—the use of a computer for criminal deception or abuse of web enabled assets that results in financial gain—can be categorized and explained in three groups for the purpose of this blog: basic identity theft with the goal of collecting and selling identifiable information, targeted campaigns focused exclusively on obtaining financial credentials, and fraud that generates artificial traffic for profit.

Digital fraud is its own sub-community consistent with typical hacker profiles. You have consumers dependent on purchasing stolen information to commit additional fraudulent crime, such as making fake credit cards and cashing out accounts, and/or utilizing stolen data to obtain real world documents like identification cards and medical insurance. There are also general hackers, motivated by profit or disruption, who publicly post personally identifiable information that can be easily scraped and used by other criminals. And finally, there are pure vendors who are motivated solely by profit and have the skills to maintain, evade and disrupt at large scales.

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• Identity fraud harvests complete or partial user credentials and personal information for profit. This group mainly consists of cybercriminals who target databases with numerous attack vectors for the purposes of selling the obtained data for profit. Once the credentials reach their final destination, other criminals will use the data for additional fraudulent purposes, such as digital account takeover for financial gains.
• Banking fraud harvests banking credentials, digital wallets and credit cards from targeted users. This group consists of highly talented and focused criminals who only care about obtaining financial information, access to cryptocurrency wallets or digitally skimming credit cards. These criminals’ tactics, techniques and procedures (TTP) are considered advanced, as they often involve the threat actor’s own created malware, which is updated consistently.
• Ad fraud generates artificial impressions or clicks on a targeted website for profit. This is a highly skilled group of cybercriminals that is capable of building and maintaining a massive infrastructure of infected devices in a botnet. Different devices are leveraged for different types of ad fraud but generally, PC-based ad fraud campaigns are capable of silently opening an internet browser on the victim’s computer and clicking on an advertisement.

Ad Fraud & Botnets

Typically, botnets—the collection of compromised devices that are often referred to as a bot and controlled by a malicious actor, a.k.a. a “bot herder—are associated with flooding networks and applications with large volumes of traffic. But they also send large volumes of malicious spam, which is leveraged to steal banking credentials or used to conduct ad fraud.

However, operating a botnet is not cheap and operators must weigh the risks and expense of operating and maintaining a profitable botnet. Generally, a bot herder has four campaign options (DDoS attacks, spam, banking and ad fraud) with variables consisting of research and vulnerability discovery, infection rate, reinfection rate, maintenance, and consumer demand.

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With regards to ad fraud, botnets can produce millions of artificially generated clicks and impressions a day, resulting in a financial profit for the operators. Two recent ad fraud campaigns highlight the effectiveness of botnets:

• 3ve, pronounced eve, was recently taken down by White Owl, Google and the FBI. This PC-based botnet infected over a million computers and utilized tens of thousands of websites for the purpose of click fraud activities. The infected users would never see the activity conducted by the bot, as it would open a hidden browser outside the view of the user’s screen to click on specific ads for profit.
• Mirai, an IoT-based botnet, was used to launch some of the largest recorded DDoS attacks in history. When the co-creators of Mirai were arrested, their indictments indicated that they also engaged in ad fraud with this botnet. The actors were able to conduct what is known as an impression fraud by generating artificial traffic and directing it at targeted sites for profit. 

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The Future of Ad Fraud

Ad fraud is a major threat to advertisers, costing them millions of dollars each year. And the threat is not going away, as cyber criminals look for more profitable vectors through various chaining attacks and alteration of the current TTPs at their disposal.

As more IoT devices continue to be connected to the Internet with weak security standards and vulnerable protocols, criminals will find ways to maximize the profit of each infected device. Currently, it appears that criminals are looking to maximize their new efforts and infection rate by targeting insecure or unmaintained IoT devices with a wide variety of payloads, including those designed to mine cryptocurrencies, redirect users’ sessions to phishing pages or conduct ad fraud.