Lookout’s 2012 Mobile Security Threat Predictions: SMS Fraud, Botnets And Malvertising

Lookout, a company that offers security services for a number of smartphone platforms, is releasing its 2012 Mobile Malware Predictions, based on data collected from its Mobile Threat Network, a cloud-based network which constantly analyzes global threat data to identify and quickly block new threats with over-the-air app updates. The network includes more than one million apps and 15 million user devices worldwide.

For background, Lookout’s web-based, cloud-connected applications for Android, Windows Mobile, BlackBerry and most recently iOS devices help users from losing their phones and identifies and block threats on a consumer’s phone. Users simply download the software to a device, and it will act as a tracking application, data backup and a virus protector much like security software downloaded to a computer.

Lookout says that mobile threats are on the rise (which we’ve heard from McAfee as well), especially for Android device owners. The company estimates that mobile threats successfully stole more than one million dollars from Android users in 2011. And in 2012, Lookout says that the criminal business of malware will be more profitable than ever before as the possibility of monetizing mobile devices grows and the cost of infecting devices lessens.

Kevin Mahaffey, co-founder and chief technology officer at Lookout, warns, “In 2012, we expect to see the mobile malware business turn profitable. What took 15 years on the PC platform has only taken the mobile ecosystem two years.”

The report shows that the annual likelihood of an Android user encountering malware today has increased to 4 percent up from a 1 percent likelihood measured at the beginning of 2011. In fact, Android users worldwide have a 36 percent chance of clicking on an unsafe link in 2011 (up 6 percent from July 2011). In the United States, the likelihood of encountering an unsafe link is higher than the global average at 40 percent.

As for 2012, Lookout has identified a number of security threats that mobile users will encounter more frequently in the new year. First, mobile pickpocketing (SMS/call fraud) will be on the rise as malware writers continue to steal money directly from consumers by accessing their mobile devices’ ability to charge phone bills via SMS billing and phone calls. For example, earlier this year Lookout identified GGTracker, the first mobile malware that steals money from users in the U.S and earlier this week Lookout identified another Android Trojan, RuFraud, targeting Eastern European users.

While botnet networks have yet to be used at scale, this issues will be a serious threat in 2012. Lookout anticipates malware writers could secretly integrate thousands of mobile devices into extensive botnet-like networks like DroidDream and Geimini to distribute spam, steal private info, and install other malware.

Because many users fail to update device software and the difficulty of patching vulnerabilities on mobile phones, malware writers will also continue to exploit iOS and Android OS at a pace greater than vulnerabilities can be resolved.

In terms of mobile malware, Lookout says that malware writers will develop tools that enable the automatic repackaging of malicious applications. Lookout has seen instances where several infected apps were packaged by the same developer within a matter of seconds.

Both iOS and Android users will be susceptible to browser attacks as malware writers attempt to profit via Web-based mobile phishing distribution like email, text messages and fraudulent websites. Lookout also says that malvertising (genuine-looking advertisements that link back to fraudulent sites) will continue to increase in 2012, especially as mobile advertising grows.

Lookout, which just raised $40 million in new funding, is preparing for an action-packed 2012. The company will continue to expand internationally, and launched in Germany this week. And the company will be looking to continue to develop its mobile security technology, focusing on optimizing the time it takes to detect a threat and protect users.