LIVE WEBCAST: HACKING POINT OF SALE: HOW MEGA RETAILERS ARE COMPROMISED
Tuesday, July 15, 2014 – 11:00 AM Pacific / 2:00 PM Eastern
PF Chang's restaurants switch to manual credit card processing as a protection measure against ongoing card data breach
It turns out that the most effective way of card data breach prevention is... stop swiping the cards and take them manually, just like it was done 50 years ago! The old manual imprinting machine is still alive and very relevant, and can become an alternative to being PCI compliant and breached. Target would not have all those security problems if they switched to manual processing ahead of time. It saves electricity too!
Scottsdale, Ariz. (June 12, 2014) — On Tuesday, June 10, P.F. Chang's learned of a security compromise that involves credit and debit card data reportedly stolen from some of our restaurants. Immediately, we initiated an investigation with the United States Secret Service and a team of third-party forensics experts to understand the nature and scope of the incident, and while the investigation is still ongoing, we have concluded that data has been compromised.
PCI compliance tool - DLP card data scanner - is used by hackers to validate the stolen magnetic tracks
At least they have found a good practical use case for those merchants' PCI DLP tools.
While researching POS RAM scraper malware, I came across an interesting sample: a RAR archive that contained a development version of a POS RAM Scraper malware and a cracked copy of Ground Labs’ Card Recon software. Card Recon is a commercial Data Leakage Prevention (DLP) product used by merchants for PCI compliance. It looks like the criminal gangs are using the RAM scrapers to dump memory, and (ironically) using DLP to find the cards.
The PCI scanning tools such as Card Recon are not used by hackers directly to scan the RAM and search for the card numbers because they are slow. But they are good for validating and refining the results of the search and filtering out the false positives.
The criminals need to check and validate the data they have stolen, which they then sell in the underground carder marketplace. Selling bad data will damage their reputation and might even have nastier repercussions than merely losing credibility.
This guide contains basic information for cardholders about security of credit card payments. It starts with false statement though: "you have no viable alternatives when buying something online". This is wrong because today major online retailers, in addition to credit cards, accept alternative methods of Internet payments. PayPal and Amazon Payments, which were originally based exclusively on credit cards, nowadays allow payments directly from bank accounts, with the same convenience of instant transactions as credit and debit cards. In fact, they prefer payments via bank accounts which save them a lot of money on interchange fees.
It was unexpected to see the Target's REDcard in the list of emerging technologies, just next to the systems such as Bitcoin. What is so alternative in decoupoed debit card, and why other similar decoupled debit cards are not listed, for example, Nordstrom Debit? It looks like this ad belongs to Target reputation rehabilitation PR campaign:
The PIN-protected card was not affected by the data breach Target announced in 2013.
This statement is alarming and requiring validation. The PIN numbers apparently were not disclosed during the breach, but online purchases do not require PIN.
Beginning in early 2015, the entire REDcard portfolio, including all Target-branded credit and debit cards, will be enabled with MasterCard’s chip-and-PIN solution. Existing co-branded cards will be reissued as MasterCard co-branded chip-and-PIN cards. Ultimately, through this initiative, all of Target’s REDcard products will be chip-and-PIN secured.
Michaels card data breach, which was discovered back in January, also includes Aaron Brother stores.
After weeks of analysis, we discovered evidence confirming that systems of Michaels stores in the United States and our subsidiary, Aaron Brothers, were attacked by criminals using highly sophisticated malware that had not been encountered previously by either of the security firms. The affected U.S. systems contained certain payment card information, such as payment card number and expiration date, about both Michaels and Aaron Brothers customers.
There is information about security breach at Hess gas stations.
A total of 16 Hess gas stations are involved, including one in Fort Myers. We're talking about the Hess gas station located on 15260 McGregor Boulevard off Iona Road.
Skimming is a physical attack which is different from what's happened at Target. Special skimming devices, which are installed at the pump's MSR (magnetic stripe reader), read and accumulate the cardholder data, then send it to hackers through bluetooth or cell network. In many cases, debit pin numbers are also stolen using fake keyboards installed at pinpad or hidden video camera which is set up to monitor the pinpads' keyboard and record the keystrokes.
This article in The New York Times blog is another example of fallacy of tokenization.
That is a gap that tokenization is meant to fill. The technology works behind the scenes of a digital transaction: Customers still put in their card number, but software then transforms that information into a one-time token — a randomly generated code — that is sent through the payment-processing chain. Thieves who intercept the code can do little with it without the means to unscramble the token.
This description is untrue. Tokenization does not work this way. In order to get authorization for the credit card charge, the point of sale system still needs to send the full card data (the content of magnetic track 1 or 2) to the payment processing server. Such data cannot be just "transformed into a one-time randomly generated token" because the server system must be able to recognize and process it. So the card data should be encrypted using another technology called point-to-point encryption (P2PE) which is different from tokenization. Only after the card data is decrypted and processed at the payment processor's data center, it can be tokenized using the method described above, and the resulting token can be returned to the point of sale system. There are P2PE systems that are able to produce the format-preserving encryption so the resulting encrypted data looks similar to the original input so maybe that's created a confusion. But in any case, the data produced by such system is not "randomly generated", and it's not a token, and it's done in hardware rather than software, and the system is called P2PE and not tokenization. Unfortunately, such misunderstanding and overestimation of tokenization is very common perception.
My article in VentureBeat:
Lawsuit against Target and Trustwave gets the security standard all wrong.
This lawsuit could set a precedent, where the PCI security auditor is responsible for card data breaches even when the company they are auditing is fully in compliance with the PCI DSS.