Data Losses Hit Four More

The list of big-name organizations reporting security breaches just keeps growing

Another day, another security breach: In the last 48 hours, Visa, Wachovia, Equifax, and the U.S. Department of Agriculture have joined a growing list of major companies and government agencies to disclose they've been hit by sensitive -- and embarrassing -- security breaches.

The organizations now are scrambling to assist customers and employees whose personal information was either stolen or compromised in recent weeks. They join AIG, ING, and the Department of Veterans Affairs, all of which have disclosed major losses of sensitive data in the last few weeks.

Each of the incidents came to light well after the fact.

Visa was hit with a breach in one of its automated teller machine processing partners that may have compromised an undisclosed number of debit cards at various financial institutions, according to the company. The incident actually occurred back in February, but Visa didn't go public about it until after an Associated Press report yesterday. One of the institutions affected was Wachovia, which decided to reissue some of its Visa-branded debit cards to its customers last week as a precaution.

Separately, Equifax fell victim to laptop theft, and the Department of Agriculture announced today that a hacker attack may have compromised personal data of 26,000 current and former agency employees and contractors.

In a company statement, Visa USA says it's "examining a possible compromise at an independent, U.S.-based ATM processor." The company alerted all of the affected financial institutions when it first learned of the breach, according to officials. Visa wouldn't disclose the name of the victimized ATM processing firm, pending the ongoing investigation into the incident.

Other financial institutions could ultimately fall victim to the ATM system breach -- the compromised ATM processing system was an independent, third-party entity used by several ATM networks as well as some banks that issue Visa debit cards.

Wachovia wouldn’t say how many cards it reissued, but officials did say that neither Wachovia ATMs nor the Visa network were hit by the breach. "We've been monitoring the cards and made a decision based on fraudulent activity to reissue all the cards impacted," a Wachovia spokesperson said.

Equifax, meanwhile, found itself in a "physician, heal thyself" situation after a thief stole the laptop of one of its employees on a train near Manchester, U.K. The laptop contained the names and Social Security numbers of 2,500 of its employees, officials said. The theft occurred in late May, but Equifax didn't tell its employees until June 7. Now Equifax is urging its employees to sign up for the company's own CreditWatch product -- the service it provides to other companies whose employees have suffered credit-card fraud.

The data on the Equifax laptop wasn't encrypted, an Equifax spokesman said, but it was "buried" such that it would be difficult to correlate the names with the Social Security numbers. Equifax employees should be relatively safe from identity fraud, since a criminal would need a third piece of information on the employee -- such as an address or age -- to assume the identities, the spokesman said.

As for the employee whose laptop was ripped off: "The employee had permission to have this information, but it was in violation of our data protection policy to store it on his hard drive," says the spokesman.

The Department of Agriculture, meanwhile, is sending affected employees and contractors to a special Website and is offering them a free year of credit monitoring services. The attack was first detected on June 5, and at that time, the agency believed personal identity data was safe. The agency now believes that this may not be the case.

So is this an epidemic of security lapses, or are organizations just coming clean now because of legal pressures from state disclosure laws?

It's a combination of both, security experts say. "There used to be a culture of shame about this... If you had a security breach, you didn't talk about it. Now, for legal reasons, you have to talk about it," says Andrew Jaquith, senior analyst with the Yankee Group.

Dan Blum, senior vice president and research director for the Burton Group, says identity theft and cybercrime are indeed on the rise, but he agrees that breaches are really nothing new. "There was plenty of this going on before, but we didn't have the [state] disclosure laws," he says.

That doesn't necessarily mean all these organizations are being totally honest in their disclosures, however. Jaquith says the new PR formula seems to be to first acknowledge the breach, and then provide a disclaimer that none of the data was used or abused. "But how would they really know that?" he wonders.

How can organizations avoid falling victim to this bad security karma?

The obvious answer is a solid security infrastructure and policy, but enterprises also need to rethink where they store their sensitive data, experts say. "You should treat it like radiation," Jaquith says. "It shouldn't be in quantity on laptops."

Burton Group's Blum says there's no silver bullet, but if sensitive data must reside on a traveling or local laptop, it should be encrypted with a separate password stored on a USB device or smart card. "Otherwise, authentication becomes the weak link in encryption," he says. And credit card data shouldn't be spread among multiple processing centers, he says.

We certainly haven’t seen the last of the summer security breaches, experts believe. "This is just going to go on and on," Jaquith says.

— Kelly Jackson Higgins, Senior Editor, Dark Reading

Companies mentioned in this article:

  • Wachovia Securities Inc.
  • Yankee Group Research Inc.
  • Burton Group