9 Notorious Hackers Of 2013

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What is memory-scraping malware, and how can it be stopped?

Malware that attacks the RAM inside point-of-sale (POS) devices -- the fancy name for digital cash registers used by everyone from retailers and restaurants to hoteliers and hospitals -- leapt into the spotlight this week after it was tied to the recent breach of Target, and by extension, breaches involving Neiman Marcus and other as-yet-unnamed retailers.

"There was malware installed on our POS registers; that much we have established," Target chief executive Gregg Steinhafel said Sunday in an interview with CNBC, referring to a breach that began on November 28 and lasted until December 15. That breach resulted in up to 110 million people having their credit card information or personal details compromised. A related investigation remains underway.

In the wake of Target's admission, here's what businesses and their customers should know about RAM-scraping malware and how to stop it.

1. Memory-scraping malware isn't new. Memory-scraping attacks date from at least 2011, when security researchers first spotted an advanced version of the Trackr (a.k.a. Alina) malware, which can be controlled via a botnet. "One of the earliest serious POS RAM scraper attacks that we observed was back in November 2011 when we found that a university and several hotels had their PoS systems compromised," said Numaan Huq, a security researcher at SophosLabs Canada, in a July 2013 blog post. "Later we saw varied targets, including an auto dealership in Australia infected with Trackr."

Retailers aren't the only organizations vulnerable to having their POS systems targeted by memory-scraping malware. "Although retailers can be affected by these kinds of things, there have been food service companies, healthcare, hotels and tourism companies being targeted by RAM scraping in the past," said security researcher Graham Cluley, speaking by phone.

But the Target breach appears to set a new high in terms of the number of records that the attackers were able to successfully compromise. "Because of the scale of the Target breach, this is probably one of the biggest incidents, if not the biggest incident, that has occurred," Cluley said.

[For more on the expanding Target data breach, see Neiman Marcus, Target Data Breaches: 8 Facts.]

2. POS malware routes around encryption. Memory-scraping malware is typically designed to target Track 1 and Track 2 data -- including a cardholder's name, card number, expiration date, and the card's three-digit security code (a.k.a. CVV or CVC) -- at the place where it's most vulnerable to being intercepted: in memory, where it's in plaintext format.

"There is that opportunity to steal the credit card information when it is in memory, perhaps even before your payment has even been authorized, and the data hasn't even been written to the hard drive yet," said Cluley. "In some ways, it's understandable that the bad guys did this because the Payment Card Industry Data Security Standards -- PCI DSS -- tell retailers that if you write this [card] information to a hard disk or any other type of media it has to be strongly encrypted so nothing can grab it, and if you transmit it must be strongly encrypted, so nothing can intercept it in transit."

3. Security wrinkle: plaintext realities. Unfortunately, it's not feasible to encrypt data in POS system memory. "No matter how strong your encryption is, if the system needs to process data or process the code, everything needs to be decrypted in memory," explained Chris Elisan, principal malware scientist at security firm RSA, a division of EMC, speaking by phone.

Furthermore, RAM-scraping malware is purpose-built to act only when that information capture or decryption occurs. "Let's say it wants to steal credit card numbers," Elisan said. "The moment it sees new data being loaded into memory -- the moment it sees 16 characters with a zero or special character at the end, indicating that it's a card number -- it would just intercept that."

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