A new variant of the Zeus Trojan that is designed to run on Android smartphones has been detected.

Research from Fortinet found that ‘Zitmo' has been used to defeat SMS-based banking two-factor authentication on Symbian, BlackBerry and Windows Mobile platforms for several months. It said that Zitmo malware poses as a banking activation application and in the background it listens to all incoming SMS messages and forwards them to a remote web server.

Denis Maslennikov, senior malware researcher at Kaspersky Lab, said: “The first fact that must be mentioned is that Zitmo for Android differs from Symbian, Windows Mobile and BlackBerry versions a lot.

“The functionality and logic of Zitmo for Symbian, Windows Mobile and BlackBerry is the same including the command and control phone number, SMS commands and the ability to forward SMS messages from a particular number, as well as the ability to change the command and control centre.

“The functionality and logic of ZitMo for Android is far more primitive. The APK file itself has a 19k size. It passes itself off as a security tool from Trusteer. If a user installs the malicious application then the ‘Trusteer Rapport' icon will appear in the main menu and that is what is going to be on the screen after clicking on the application's link.”

Eddy Willems, G Data security evangelist, said: “This variant of Zitmo is yet another strong indication that Android is increasingly coming under attack due to its thriving popularity worldwide. As is the case with computer malware, cyber criminals and anti-virus vendors are in a constant rat race concerning mobile operating platforms with new, unknown attacks always around the corner.

“Securing your device with mobile security software is smart, because it protects against the attacks that are known. However, users must also be cautious when downloading apps and accessing their online banking accounts.”

Trusteer CEO Mickey Boodaei said: “Android's security architecture is not currently up to the challenge. This is reflected mainly in the ease of generating powerful fraudulent applications and the ease of distributing these applications. Users installing these applications do get a message with a list of resources the app is requesting access to, but would usually ignore it, as many applications request access to an extensive list of resources.

“Building a powerful fraudulent Android application that steals and abuses your identity and your bank account is almost trivial. Distributing these applications on the Android Market is even more trivial. There are no real controls around the submission process that could identify and prevent publishing malicious applications on these stores.”

Maslennikov said: “The first attacks with Zeus-in-the-Mobile for Android started probably in early June. But how does Zitmo for Android actually infect devices? Nothing has changed in this area.

“Besides a site hosting the downloader, cyber criminals have also uploaded Zitmo for Android to the Android Market. The application has already been removed but, as it was in previous cases of malware in the Android Market, there are mirroring websites which save the information about all the programs approved by Google.”