Serious bug in fully patched Internet Explorer puts user credentials at risk

A vulnerability in fully patched versions of Internet Explorer allows attackers to steal login credentials and inject malicious content into users' browsing sessions. Microsoft officials said they're working on a fix for the bug, which works successfully on IE 11 running on both Windows 7 and 8.1.

The vulnerability is known as a universal cross-site scripting (XSS) bug. It allows attackers to bypass the same origin policy, a crucially important principle in Web application models that prevents one site from accessing or modifying browser cookies or other content set by any other site. A proof-of-concept exploit published in the past few days shows how websites can violate this rule when people use supported versions of Internet Explorer running the latest patches to visit maliciously crafted pages.

To demonstrate the attack, the demo injects the words "Hacked by Deusen" into the website of the Daily Mail. But it also could have stolen HTML-based data the news site, or any other website, stores on visitors' computers. That means it would be trivial for attackers to use it to steal authentication cookies many websites use to grant access to user accounts once a visitor has entered a user name and password. Once in possession of the cookie, an attacker could access the same restricted areas normally available only to the victim, including those with credit card data, browsing histories, and other confidential data. Phishers could also exploit the bug to trick people into divulging passwords for sensitive sites.

The exploit appears to use iframes to tamper with IE's support of the same origin policy. The exploit code looks like this:

function go()
{
w=window.frames[0];
w.setTimeout("alert(eval('x=top.frames[1];r=confirm(\\'Close this window after 3 seconds...\\');x.location=\\'javascript:%22%3Cscript%3Efunction%20a()%7Bw.document.body.innerHTML%3D%27%3Ca%20style%3Dfont-size%3A50px%3EHacked%20by%20Deusen%3C%2Fa%3E%27%3B%7D%20function%20o()%7Bw%3Dwindow.open(%27http%3A%2F%2Fwww.dailymail.co.uk%27%2C%27_blank%27%2C%27top%3D0%2C%20left%3D0%2C%20width%3D800%2C%20height%3D600%2C%20location%3Dyes%2C%20scrollbars%3Dyes%27)%3BsetTimeout(%27a()%27%2C7000)%3B%7D%3C%2Fscript%3E%3Ca%20href%3D%27javascript%3Ao()%3Bvoid(0)%3B%27%3EGo%3C%2Fa%3E%22\\';'))",1);
}
setTimeout("go()",1000);

A Microsoft spokesperson issued the following statement:

We are not aware of this vulnerability being actively exploited and are working on a security update. To exploit this, an adversary would first need to lure the user to a malicious website, often through phishing. SmartScreen, which is on by default in newer versions of Internet Explorer, helps protect against phishing websites. We continue to encourage customers to avoid opening links from untrusted sources and visiting untrusted sites, and to log out when leaving sites to help protect their information.
The statement is correct in pointing out that to succeed, an attacker would first have to lure a target to a malicious site. In an age of social networking and shortened links, that's not a difficult burden to meet. And while SmartScreen could be an effective remedy, it would take some time for it to be put in place. And even then, SmartScreen would work only against attacks that are spammed to large numbers of people. SmartScreen would likely do nothing to prevent targeted attacks.