Chris Gray, director of the risk and compliance practice at information security consulting firm Accuvant, told Reuters that attackers would likely have tested their hacking techniques before launching a full-fledged campaign during the holiday shopping season.
"You want to test it and make sure it works," said Gray. "Then you push it out at the appropriate time and do as much damage as you can."
6. Attack toolkit likely included RAM scraper
One unanswered question from the Target and Neiman Marcus breaches is how internal or external attackers managed to steal so much data while avoiding detection. But people with knowledge of the Target investigation told Reuters that the attackers' toolkit reportedly included memory-parsing malware known as RAM scrapers. The malware can be used to infect point-of-sale (POS) systems -- a fancy name for retailers' digital cash registers -- and then intercept sensitive information such as credit card numbers and magnetic-stripe data. While the data resides in memory it remains in plaintext -- and thus easy to intercept -- even if it later gets encrypted for storage or transmission.
Visa reportedly published two security alerts last year -- in April and August -- warning retailers about a rise in RAM-scraping attacks. But one source told Reuters that the RAM scraping tools used by attackers were more sophisticated than what's been seen before, meaning that even if Target or any other retailer had bolstered its security defenses in the wake of the Visa warning, they may have been unable to stop the new malware.
7. Stolen card data flooded market early in January
Why steal credit card data from Neiman Marcus or Target? The most likely explanation behind any cybercrime is financial -- turning a profit either by using the cards to make fraudulent purchases and resell the goods for cash, to sell the stolen data in bulk via "carder" forums, or both.
On that front, Daniel Ingevaldson, CTO of Easy Solutions, said his fraud-detection firm recently saw a flood of high-end card data hit the cybercrime marketplace. "On January 4th, we saw a dump of 2 million cards onto the black market -- one of the largest single day drops we've seen in a while," Ingevaldson said in a blog post.
"While we can't definitively say what the source of the breach was, the percentage of extremely high-value cards is significantly higher than we see on average. These are cards like the Amex Centurion card -- an invite-only card that comes with a $7,500 setup fee and $2,500 annual fee," he said. "While it is hard to determine from a single black market, this would indicate these could come from a high-end source, such as Neiman Marcus."
8. After breaches, Congress considers making retailers pay
Banks and card issuers are reportedly prohibited from naming any organization that's suffered a breach, unless that organization releases a public breach notification. Then it's up to the card issuers to notify affected customers.
Issuing new cards, however, reportedly costs at least $10 per card, which has led some card issuers to avoid reissuing cards after a breach. Notably, while J.P. Morgan Chase reportedly replaced up to 2 million cards for cardholders whose data was compromised during the Target breach, Wells Fargo has declined to do so, saying that it will instead monitor accounts for signs of fraud and add additional protections to any apparently compromised accounts.
But The Wall Street Journal reported Monday that in coming weeks, the Senate banking committee is set to explore whether retailers should foot the costs incurred by card issuers in the wake of a breach.
The related debate is sure to be contentious. Card issuers, for starters, have long decried their inability to hold retailers accountable for the cost of replacing cards following a breach. But retailers have long countered that card issuers should be doing more to protect cardholder data, for example by implementing the chip-and-PIN system known as EMV, which requires a cardholder to enter a personal identification number before the card can be used to authorize an in-person transaction. EMV is already in widespread use in many other parts of the world, including Europe. Support for EMV in the United States has been weak, at best, likely owing both to the cost retailers would incur by having to upgrade to EMV-compliant point-of-sale systems, as well as the cost to card issuers of issuing new, EMV-compatible cards and undertaking related consumer education.
Mathew Schwartz is a freelance writer, editor, and photographer, as well as the InformationWeek information security reporter.
Next-gen intrusion-prevention systems have fuller visibility into applications and data. But do newer firewalls make IPS redundant?Also in the The IPS Makeover issue of Dark Reading Tech Digest: Find out what our 2013 Strategic Security Survey respondents have to say about IPS and firewalls. (Free registration required.)