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02:00 PM

Checkers Breach Underscores Continued POS Dangers

Attacks on point-of-sale terminals garners less attention these days, but the most recent breach of the restaurant chain shows hackers have not lost focus.

Attackers compromised and installed point-of-sale (POS) malware on devices at more than 100 stores in the Checkers and Rally's restaurant chain, allowing them to collect payment-card information from customers for months — and, in some cases, years, the company said in a statement released this week. 

The attack highlights how POS devices continue to be a viable target for cybercriminals if the merchant, hardware maker, and payment services provider have not all adopted the Europay-Mastercard-Visa (EMV) security standard. While EMV is an effective defense against most payment device malware, many retailers have not upgraded to hardware that is EMV-capable, says Josh Platt, principal threat researcher at Flashpoint.

"Businesses are not required to upgrade their POS terminals," he says. "Unfortunately, it seems many businesses are still not EMV-compliant and will thus continue to be more susceptible to suffering losses in these situations until they become compliant."

Customers at a minimum of 104 Checkers and Rally's locations were affected by the latest breach, according to parent company Checkers Drive-In Restaurants, which only recently became aware of the breach. The company retained security consultants to investigate the attacks and determine the length of time that each location had been compromised. At least one location had the malware installed in December 2015, according to data provided by the company.

"Based on the investigation, we determined that malware was installed on certain point-of-sale systems at some Checkers and Rally’s locations, which appears to have enabled an unauthorized party to obtain the payment card data of some guests," said Adam Noyes, the chain's chief administrative officer, in a statement. "The malware was designed to collect information stored on the magnetic stripe of payment cards, including cardholder name, payment card number, card verification code and expiration date."

The attack also underscores how merchants that have not upgraded to EMV put themselves — and their customers' information — at risk. Merchants are quickly adopting devices that comply with the security specification, but almost half of transactions were not protected: In 2018, 54% of card-present transactions used EMV, up from 41% the prior year, according to EMV Co., the organization promoting and managing the specification. 

POS terminals that use EMV technology encrypt and tokenize credit card information, preventing malware on the card reader from intercepting the data. As retailers have adopted the EMV security standard, attacks at the point of sale have become less common.

Yet the hardware is not inexpensive, and that has slowed adoption, which puts customers' information at risk, Flashpoint's Platt says.

"If a business is not EMV-compliant, the card numbers of any cards swiped at a POS terminal are transmitted," he says. "And when card numbers are transmitted, POS terminals infected with malware will be able to see the numbers and transmit them as well."

While details of the Checkers breach have not been released, often retailers use special editions of Microsoft Windows for retail environments that are not kept up to date. In addition, the retailers usually do not manage the devices, relying on a third-party service provider whose security may leave vulnerable pathways into the business, says Robert Neumann, senior security researcher at Forcepoint, a provider of managed security services.

"They are also often utilizing third-party remote admin applications, such as LogMeIn, TeamViewer, or similar for easier updating and maintenance, hence increasing the attack surface," he says. "We suspect there are special cases where POS malware is being distributed through fake software updates from a central location after successfully gaining foothold in the network by hacking."

Finally, not all issues can be blamed on the retailers, according to Flashpoint's Platt.

"It is still pretty common for EMV chip readers to not work properly," he says. "When this happens, users are typically asked to swipe their cards instead — and this defeats the purpose of EMV chip-and-pin cards."

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Veteran technology journalist of more than 20 years. Former research engineer. Written for more than two dozen publications, including CNET News.com, Dark Reading, MIT's Technology Review, Popular Science, and Wired News. Five awards for journalism, including Best Deadline ... View Full Bio

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User Rank: Ninja
6/3/2019 | 2:05:03 PM
Re: Protection Profiles for PoS
Less technical notes - many POS devices years ago had an XP version called 'Embedded" - never had a chance to work on one of these different systems but I wonder who was in control - who supported them?  I presume the retail store itself or parent firm has a support conract and how often, and this is frightening, do their staff visit a retail store for upgrades and review.  Never knew.  Kroger has POS stations of course and about 2 yeas ago they were upgraded from (god forbid) Windows NT ----- true, I recongized the OS screen easy ---- to Windows 7 and that was a nightmare for 2 weeks.  Again - WHO supports these devices.  And Every Kroger has four of them.  I have seen in Atlanta internet attached parking meters!!!   True - debit card, swipe and there you go.  
User Rank: Ninja
6/1/2019 | 3:07:35 PM
Protection Profiles for PoS
In a 2014 paper on PoS protection profiles [1] the authors point to the failure of PoS companies in general to comply to any given standard (including, I assume, the EMV) or, despite trying to comply, still end up getting hacked.  There is no guarantee of security when an organization uses a standard such as EMV; failure points exist across the PoS ecosystem, not just at a single point.  The paper focuses instead on a protection profile for PoS based on Common Criteria (CC) with the goal of developing security functional requirements for PoS systems that are more robust, more likely to produce a secure PoS system and are not limited to a specific country's standard for security, but drawn from an international standard (ISO/IEC 15408).  While many standards from each country who have written them for PoS security reference or draw from CC, the importance of having mandatory security functional requirements based on the CC (ISO/IEC 15408) that are NOT rooted in any one country's interpretation or implementation is critical to higher levels of PoS security globally.  As the paper concludes, this aids in making the most objective evaluation of the security of a PoS system possible.   

[1] Lee HJ., Lee Y., Won D. (2014) Protection Profile for PoS (Point of Sale) System. In: Park J., Adeli H., Park N., Woungang I. (eds) Mobile, Ubiquitous, and Intelligent Computing. Lecture Notes in Electrical Engineering, vol 274. Springer, Berlin, Heidelberg
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