Panda discovers malware on HTC Magic phone

A Panda Security employee discovered three malware programs on a recently purchased HTC Magic phone when it was plugged it into a Windows computer.

Upon further investigation, Panda found that the employee's phone contained three malware programs: a client for the now-defunct Mariposa botnet, the Conficker worm as well as a password stealer for the Lineage game, said Pedro Bustamante, Panda's senior research adviser.

The malware programs were on the phone's 8GB microSD memory card, which mounts as an external drive when plugged into a PC, Bustamante said. When plugged into a Windows PC, the Mariposa botnet client would automatically run, Bustamante said.

Mariposa was at one time one of the largest botnets responsible for denial-of-service attacks and stealing banking credentials until it was shut down by security researchers in December after they disabled its command-and-control servers. Spanish police have since arrested three men affiliated with the botnet.

Mariposa's autorun configuration may have overwritten Conficker's autorun capability, Bustamante said. Conficker is a worm that still infects millions of machines worldwide despite an aggressive campaign by security experts to eradicate it. The password-stealing program would not run automatically unless someone double clicked on the file, Bustamante said.

A Vodafone spokesman said the company is looking into the situation but that it appears to be an isolated incident. "We will obviously fully investigate this and make sure that any necessary changes to our security policies are put in place," he said.

The HTC Magic phone has been on the market for more than a year, so it's unlikely that the malware programs were installed at the factory. "It would have popped up earlier," Bustamante said.

What is more likely is that the phone was purchased by someone else, the microSD card became infected after the phone was plugged into an infected PC, and then the phone returned to Vodafone.

"It was probably returned to Vodafone and sent to another person without flashing it or restoring the memory of the phone," Bustamante said.

Many phones can be reset to their factory settings by pushing a couple of buttons, which would have erased the malware and reset the phone, something that should be standard procedure before selling a refurbished phone, Bustamante said.

"The question is why wasn't it done," he said.

Vodafone is tracing the phone, which was ordered in Spain, to see which warehouse it came from, Bustamante said. Vodafone distributes the phone in the U.K., Spain, Germany and France, he said.

Panda, which has published a blog post with screenshots, also plans on purchase two or three more HTC Magics for investigation.