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Microsoft Cracks Down on AI-Driven Cybercrime Service RedVDS, ETCIO
Microsoft on Wednesday said it has taken coordinated legal action in the United States and Britain to disrupt a low-cost subscription service called RedVDS that helps cybercriminals carry out lucrative scams.
RedVDS charges as little as $24 monthly for access to disposable virtual computers that enable large-scale fraud that is difficult to trace, according to the company.
“Services like these have quietly become a driving force behind today’s surge in cyber-enabled crime,” Digital Crimes Unit Assistant General Counsel Steven Masada said in a blog post.
Microsoft said RedVDS has been used primarily for payment diversion fraud, where attackers intercept legitimate business communications and redirect funds by impersonating trusted parties.
Two victims joined Microsoft as co-plaintiffs: an Alabama pharmaceutical company that lost more than $7.3 million, and a Florida condominium association defrauded of nearly $500,000 in resident funds.
Real estate transactions have been particularly vulnerable, Microsoft said.
Generative AI tools are often paired with RedVDS services to help identify prime targets quickly and generate more authentic-appearing messages to victims, according to Masada.
Microsoft reported finding hundreds of cases in which scammers used AI tools for face-swapping, voice cloning or video manipulation to trick victims.
RedVDS did not respond to a request for comment.
Microsoft estimated that cybercrime involving RedVDS services is linked to some $40 million in US fraud losses since March of last year.
Microsoft coordinated the legal action against RedVDS with Britain as part of a broad effort to thwart the growing trend of “cybercrime-as-a-service,” according to Masada.
RedVDS provides inexpensive access to effective virtual computers running unlicensed software, allowing criminals to operate quickly, anonymously and across borders, Masada said.
The US tech giant said the effort includes prosecutors and police in Germany, where a critical computer server used to power RedVDS was seized, according to Masada.
Microsoft said it is also working with Europol’s European Cybercrime Centre and law enforcement agencies elsewhere to disrupt the RedVDS server and payment networks.
