What businesses and retailers need to learn from credit card data leak

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Today’s retail environment has become increasingly more complex and sophisticated. Recently, it has been reported that more consumers are willing to use Visa PayWave in Singapore; its usage has more than tripled since its introduction to supermarket cash registers last year. This trend has created the demand for more businesses to embrace new technologies quickly, and IT demands continue to increase due to growing risk management concerns and regulatory compliance requirements. Distributed retail environments are particularly challenging. Each endpoint (store) is an attack vector waiting to be exploited.

As real life examples of this, at the end of the year 2013, a security breach on USA-based retailer Target Corporation has revealed the vulnerabilities retailers will have with their Point of Sale (PoS) system if they are not secured correctly. As a result of the breach, Target’s CIO Beth Jacob has claimed responsibility and resigned, leaving industry watchers questioning if companies allocate sufficient security funding and resources to prevent such breaches – or would they be better off outsourcing to third party security experts? 

During the breach, attackers stole two distinctly different types of information, both of which serve different purposes to attackers:

1. Credit card magnetic stripe data – They can use this to create fake credit cards for physical purchases, or physical ATM withdrawals (if they can decode the PINs, which are unlikely).

2. Personally Identifying Information (PII) – They have 70 million customer names, numbers, addresses and e-mails, which they can start to use for identity theft or they can use the e-mail addresses in future phishing attacks.

As far as the PII is concerned, frankly things like name, address, phone number, and e-mail are probably already out there. The additional risk on this information due to the Target breach isn’t zero, but it is probably relatively negligible. 

The credit card data leak has more severe repercussions though. Few experts believe that the attackers do not have enough information to make unattended purchases; they do have enough data to make a clone copy of the card, which they can try to use to make fraudulent, in-person purchases. Finally, if attackers crack the supposedly protected PINs, they could also make ATM withdrawals, like in the big USD 45 million dollar ATM heist of last year.

Over the past few years, experts in the Infosec field have noticed the steady increase in malware that specifically targets point-of-sale (PoS) systems. Since many PoS systems are just Windows or Linux computers, PoS malware looks and acts, for the most part, very much like normal malware with two distinct differences.

First, it was designed to search the victim computer’s active memory, rather than just searching its file storage system (a technique security folks call RAM scraping). Second, PoS malware is designed specifically to sniff credit card magnetic stripe data. In other words, it specifically looks for the data PoS systems handle. So, how to prepare for PoS malware? Here are some of few takeaway and tips:

Segment your trusted network – In every organization, there are people or assets that have different levels of privilege or sensitivity than others. For instance, there is no reason that someone in the HR department should have network access to engineers’ source code repositories. By the same token, there is no reason that the computers employees use to browse the Internet in the break room should be on the same network as the ones PoS registers are on.

The legacy firewalls, Unified Threat Management (UTM) devices or Next Generation Firewalls (NGFW) have many physical interfaces and even VLAN tagging capabilities, which allows to segment the internal, trusted network more granularly, based on the roles difference users and assets play in the organization. This additional network segmentation allows having a “roadblock” where one can enforce explicit policies for what is and isn’t allowed. If the PoS systems are placed on a separate network, policies can be created that only allow the specific PoS traffic to these systems. This means any PoS malware trying to ex-filtrate data from the network will have more hurdles to get the data out. For instance, in the Target attack the hackers used good old FTP, which may decide to block on the PoS network.

Keeping up-to-date with more proactive malware detection – Antivirus (AV) technology still relies very heavily on reactive, signature-based detection. However, AV vendors have started implementing more proactive detection technologies, which use techniques like behavior analysis or code emulation to help detect new malware without signatures. Recently, newer malware detection controls have surfaced that use something called virtual execution to run unknown binaries in a fully virtualized Windows environment, in real-time. These solutions are much better at proactively finding previously undiscovered malware by monitoring for suspicious behaviors.

Focus your defenses on data – Most of the preventative security controls are focused on protecting machines and devices and not necessarily on protecting data directly. While we do need to protect the container of data, we need to spend a bit more time monitoring and protecting our data directly; one being investing in data loss prevention (DLP) technologies that

can see sensitive data as it passes the borders. The DLP service can monitor for credit card numbers and magnetic stripe information. DLP is not fool proof—smart attackers might encrypt things to get it past sensors—but it does pose another roadblock, making things harder for the attacker.

Invest in detection and analytics – The technology that protects us today will eventually get bypassed tomorrow and even if we had the perfect technological solution, there is still a human element to the security problem and criminals would still prey on our social weaknesses to infiltrate our networks.

That is why there must be a focus on the security efforts on security visibility and analytics solutions. They can help to quickly identify anomalies or security events on the network, so that the incident response team can immediately research them, and hopefully cut off any attacks in progress.

Review credit card standards – Countries should update its credit and debit card standards. Most of the data stored on magstripe cards are stored in clear text and one can easily recover or clone the data with a cheap reader. EMV cards actually have small microprocessors on them.

They include cryptographic keys that prove the card is the original and follow a dynamic authentication process that confirms the validity of both the card and the card reader. In short, EMV makes it much harder for attackers to clone cards and use them for in-person, fraudulent purchases. 

The fact of the matter is any one of us can suffer a breach like Target did. Even if all the right things are done and implement all the right defenses, everyone is human. A simple mistake can be the hole that lets that persistent advanced attacker in. Rather than blame the victim, we need to find and prosecute the attackers, but also learn from these unfortunate events so that we can make it a little harder for the criminals to succeed next time.

 

What businesses and retailers need to learn from credit card data leak