'DeathRing' Malware Found Pre-Installed On Smartphones

For the second time this year, a security vendor has issued a warning about brand-new mobile phones that come pre-loaded with malicious software. And like last time, the threat appears mostly restricted to low-cost and counterfeit handsets manufactured by vendors in Asia and Africa.

The implications, though, could be much broader because it suggests that criminals have shifted to distributing mobile malware via the supply chain, mobile security vendor Lookout Research said in a report released today.

The malware is a Chinese Trojan program that Lookout has dubbed DeathRing, which the mobile security firm found pre-installed on several popular smartphones sold in Asia and Africa. The Trojan is disguised as a ringtone application and is loaded in the phone's system directory from where it is impossible to remove by security vendors.

It gets activated when the phone is powered down and rebooted five times, or when the user has been away and returns to the phone a minimum of 50 times, researchers found.

Once activated, DeathRing is programmed to fetch SMS and wireless application protocol (WAP) content from a command and control server, which it then uses in several malicious ways. "For example, DeathRing might use SMS content to phish victim's personal information by fake text messages requesting the desired data," according to the report. "It may also use WAP, or browser, content to prompt victims to download further [malware]."

The command and control server appears to be offline so DeathRing no longer poses an immediate threat to users with infected handsets, says Jeremy Linden, a security researcher at Lookout.

All of the infected devices are from second and third-tier manufactures and are Android-powered brands unfamiliar in the US such as TECNO, Gionee, Polytron Rocket, Karbonn TA-FONE and a couple of Samsung knockoffs.

A large number of handsets in countries like Indonesia, Kenya and Nigeria appear to have shipped with the malware preinstalled on the devices, Linden says. In Nigeria, DeathRing is the No. 1 threat encountered by users running Lookout's mobile security software, he said.

Lookout has been unable to determine where exactly in the supply chain -- or how -- the malware was installed. "These phones pass through quite a few hands," before reaching the consumer, he says. So it is very hard to determine where in the distribution chain the compromise might have occurred.

DeathRing marks the second time this year that Lookout has spotted malware pre-installed on mobile devices. In April, the company discovered another malware program called Mouabad similarly installed on low-cost handsets in Asia. In that case, however, Lookout also saw evidence of the malware on some phones sold in Spain as well.

The chances of something similar happening in the US are significantly lower because of the much tighter suppler chain controls, says Tyler Shields, an analyst with Forrester Research.

But that doesn't mean it can never happen, he says. In fact, there are several instances where software and hardware products have been backdoored or had malware similarly preinstalled on them right out of the box.

Back in 2009, Shields, then a researcher with Veracode, gave a presentation at a Black Hat Europe on how researchers can detect malware and backdoors on what he described as "certified pre-owned" hardware and software.

Some examples he used during the presentation included a Samsung digital photo frame, an Asus 80GB hard drive, Sony BMG CDs, and a Walmart promo CD, all of which contained malware in form or the other.

"This has been a concern not just with mobile devices," he says. "This is about the security of the supply chain. It is a matter of who has the tightest controls over the vendors in the supply chain."