Microsoft: Windows flaw could steer IE to hackers

Microsoft said Monday that a flaw in the way its Windows operating system looks up other computers on the Internet has resurfaced and could expose some customers to online attacks.

The flaw primarily affects corporate users outside of the United States. It could theoretically be exploited by attackers to silently redirect a victim to a malicious Web site.

Microsoft originally patched this flaw in 1999, but it was rediscovered recently in later versions of Windows and was then publicized at a recent hacker conference in New Zealand. "This is a variation of that previously reported vulnerability that manifests when certain client side settings are made," said Mike Reavey, a group manager at Microsoft's Security Response Center.

The bug has to do with the way Windows systems look for DNS (Directory Name Service) information under certain configurations.

Any version of Windows could theoretically be affected by the flaw, but Microsoft issued an advisory Monday explaining which Windows configurations are at risk and offering some possible workarounds for customers. The company said it is working to release a security patch for the problem.

Here's how the attack would work: When a Windows system is specially configured with its own DNS Suffix it will automatically search the network for DNS information on a Web Proxy Auto-Discovery (WPAD) server. Typically this server would be a trusted machine, running on the victim's own network.

WPAD servers are used to cut down on the manual configuration required to get Windows systems working on the network. DNS suffixes are used to associate computers with certain domains of the network and to simplify administration.

To make it easier for the PC to find a WPAD server, Windows uses a technique called DNS devolution to search the network for the server. For example, if an IDG PC was given a DNS suffix of corp.idg.co.uk, it would automatically look for a WPAD server at wpad.corp.idg.co.uk. If that failed, it would try wpad.idg.co.uk and then wpad.co.uk. And that's where the problem lies: by looking for DNS information on wpad.co.uk, the Windows machine has now left the IDG network and is doing a DNS look-up on an untrusted PC.

Reavey says that this problem only affects customers whose domain names begin with a "third-level or deeper" domain, meaning that even with the DNS suffix, users on networks like idg.com or dhs.gov are not affected.

Attackers who registered "wpad" domains within second-level domains such as co.uk or co.nz could redirect victims to malicious Web sites without their knowledge, something called a "man in the middle" attack. A victim might think he was visiting his bank's Web site, but in reality, he could be sent to a phishing site.

"It's particularly insidious because a lot of people don't realize that this is happening," said Cricket Liu, vice president of architecture with DNS appliance vendor Infoblox. To date, Microsoft has heard of no such attacks actually being carried out, Reavey said.

Customers who have set their own proxy server or who have a WPAD server on their network are not at risk, Microsoft said.

Still, according to the New Zealand security researcher who discovered this flaw, many customers could be affected. Beau Butler, who also happens to own the wpad.co.nz domain estimates that about 160,000 PCs are affected by the problem in New Zealand alone, according to a published report. Butler could not be reached immediately for comment on this story, but in a note on a local Linux group Web site, he said he is collecting Web server data from this domain.