06:55 PM

Epsilon Fell To Spear-Phishing Attack

Breach apparently lasted for months despite warning of targeted attacks against email service providers.

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The breach of Epsilon, the world's largest email service provider, has put the customers of at least 50 major companies at risk from targeted phishing attacks, aka spear phishing, which use fake yet personalized emails to trick people into disclosing personal information, including passwords and financial details.

In an ironic twist for a company entrusted with sending an estimated 40 billion emails per year, the Epsilon breach apparently stemmed from the company having itself been spear phished.

Furthermore, according to Australia's iTnews, Epsilon failed to heed a November 2010 security alert from the email intelligence group at Return Path, one of its business partners, that attackers had recently been targeting email service providers (ESPs) like Epsilon via spear phishing attacks.

Return Path included a sample message with its alert, noting that it "has been sent numerous times, over several different systems, including using the facility of some ESPs, using online greeting card sites, and by way of a botnet." In addition, it said, "sources confirm the list of addresses is very small (less than 3,000 addresses) and aimed 100% at staff responsible for email operations."

The sample phishing message shared by Return Path included a link, which if a user clicked on it would attempt to download three pieces of malware. They were Win32.BlkIC.IMG, which disables antivirus software and which many antivirus programs -- at least at the time--couldn't detect. The other two malware applications were iStealer, which is a keylogger, and CyberGate, a remote administration tool.

According to iTnews, spear phishing attacks resulting from a breach of Epsilon began appearing in early December, starting with Walgreens. But Epsilon apparently didn't discover that its systems had been breached until it installed software, in February 2011, designed to spot unusual--and potentially malicious--information access patterns. By then, stolen data included information relating to the customers of at least 50 companies, including Best Buy, Citi, Hilton, LL Bean, Marriott, Target, TiVo, and Walgreens.

According to Epsilon, attackers stole only 2% of its customer data. But given that the company provides email marketing services for more than 2,500 companies, and by some estimates stores 250 million emails, that's a sizeable breach.

Furthermore, the number of companies warning that their customers are at risk has been expanding, with the Better Business Bureau warning that customers of any affected companies were at risk.

The Epsilon breach highlights that with the growth of cloud services, one data breach can be a single point of failure for numerous organizations. "Outsourcing and the cloud are buzzwords of the 2010s--their many evangelists will assure you that cloud-sourcing your high-volume Internet services is certain to save you money, improve your up-time, and boost your security," said Paul Ducklin, the Asia-Pacific head of technology for Sophos, in a blog post. "After all, if you leave a job such as direct marketing--or email, or office automation, or authentication -- entirely to the specialists, you're bound to have experts on the job who are at least as switched on about security as you are."

Furthermore, entrusting a single company with data on so many people makes it an attractive target for attackers, which may in fact place customers at greater risk of having their personal information stolen.

Of course, customers also won't be holding just the ESP responsible. "The real lesson to be learned is that companies are still responsible to their customers for incidents like this, even if the fault lies with an outsourcer," security analyst John Pescatore, a vice president at Gartner Inc., said in the SANS Newsbites newsletter.

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