A Dutch internet service provider has identified a worm that installs a backdoor on jailbroken iPhones and makes them part of a botnet.

The worm, according to XS4ALL, targets jailbroken iPhones whose owners have carelessly failed to change the default password. In addition to connecting to a Lithuanian master command channel, it also changes the root password for the device, making it harder for owners trying to regain control. Infected iPhones are also tagged with a unique ID number.

“A number of customers with jailbroken phones have been found running unknown software on their phones which is trying to compromise other iPhone users at other telecommunications providers,” the XS4ALL advisory stated. “XS4ALL strongly advises caution against jailbreaking if you are not fully aware of the potential risks to your privacy and security.”

The worm has the ability to pillage SMS databases, and an analysis by Security.nl (English translation here) has identified a script that looks for mobile transaction authentication numbers used by some banks to perform two-factor authentication with SMS-based systems.

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