A researcher has uncovered an elaborate bank-fraud scam that's using a malicious extension in Google's Chrome Web Store to steal targets' passwords.

Once installed, the Interface Online extension, uploaded at least twice in the past 17 days, surreptitiously monitors all connections made with the Chrome browser. When users visit specific pages programmed into the code, the extension activates a JavaScript routine that logs the user name and password entered into the form. The extension then uploads them to a server controlled by the attackers. This entry in the Google-owned Virus Total service reports the extension was not detected by any of the 58 most widely used anti-malware products at the time this post was going live.

Google officials removed the extension on Tuesday, after Renato Marinho, who is the Chief Research Officer of Morphus Labs and a volunteer at the SANS Institute, reported it was part of a scam hitting Brazilian bank customers. It had been available since July 31 and was downloaded 30 times. On Wednesday, the same extension reappeared and showed it had already received 23 downloads. It remained available for download here for several hours after this post went live, although Marinho said he reported the reposted app to Google. On late Wednesday afternoon, a Google spokesman e-mailed to say the extension was finally removed.

Maximizing criminals’ chances

It's not the first time Google has been caught hosting malicious extensions. Last year, researchers from security firm Malwarebytes reported finding an extension called iCalc that routed all of a user's browser traffic through an attacker-controlled server . It also periodically checked with the server to receive newly issued commands or updates. Shortly after Google removed iCalc Malwarebytes found a separate malicious Chrome extension connected to the same attack group. Two weeks ago, Ars reported the hijacking of two separate Extension developer accounts , one for the Web Developer extension that has 1 million downloads. Since then, the number of extension accounts known to have been taken over has grown to eight

"Having the malware hosted on Google's Chrome store maximizes criminals' chances [of gaining] trust on the software," Marinho told Ars. "It's different to have a suspect open an e-mail attachment, for example." Using the Chrome Web Store "helps criminals to entice victims' trust as the extension is available on an official app store"

Interface Online is being used in highly targeted attacks that single out employees who are in charge of their companies' finances. The employees receive a phone call from someone who warns that they will lose access to their online bank account unless they install a security module. When the employees click through a link provided by the caller, they are redirected to the extension hosted by Google. The caller then walks them through a test access to the account by logging in. With that, the attackers have the credentials required to log in.

"It's impressive how convincing they are," Marinho said of the callers after listening to a tape of one of the calls. "They ask for a specific person name (previously collected on a social network) and try to convince the target to install a new version of security module. The background noise is very similar to a real call center - although it could be real one."

Marinho said Google should consider placing new limits on Chrome extensions to limit the damage malicious ones can do. One curb would be to monitor and block extensions' access to passwords and other sensitive data, unless a user has granted explicit permission. He also questioned whether extensions should be allowed to override system proxy rules as Interface Online did to prevent researchers from monitoring the passwords it was collecting.

Besides those measures, Google could also make two-factor authentication mandatory for all extension developer accounts. While that safeguard can be bypassed in some cases, it would make account takeovers require considerably more work than they do now.

Google has developed a variety of industry-leading innovations that make Chrome arguably the most secure browser available. The chink in this otherwise hard-to-penetrate armor are extensions. Company researchers should shore up this weakness before it's exploited against large numbers of users.