Malware Inside the Credit Card Machine

By | November 22, 2011
2 Comments

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(Update, July 2009: A BusinessWeek article puts the company’s side; maybe I was a little too harsh on them in this post.)

This gives you an idea of how bad malware is getting, and how much we’re underestimating it: a U.S.. company that processes credit card transactions has just revealed that malware inside its computers may have stolen the details of more than 100 million credit card transactions. That would make it the biggest breach in history.

Heartland Payment Systems, one of the fifth largest U.S. processors in terms of volume, began receiving reports of fraudulent activity late last year. But it took until last week to find the source of the breach: “A piece of malicious software planted on the company’s payment processing network that recorded payment card data as it was being sent for processing to Heartland by thousands of the company’s retail clients,” according to Brian Krebs of The Washington Post.

Revealed were credit/debit card numbers, expiry dates and names of customers to some, or all, of more than a quarter of million retail outlets. Bad guys could make fake cards based on this data, but they probably couldn’t use it to buy stuff online, the company said. (At least one observer has characterized this as garbage, opining that a lot of eCommerce merchants turn off their Address Verification System because of errors, and fears of losing the customer.)

That it took so long is pretty extraordinary in itself—these are, after all, the company’s own computers. We’re not talking about investigators having to track down malware on one of its customers computers, or somewhere in between. But that’s not all that’s remarkable: It looks like the certification that these kinds of operations rely on, the Payment Card Industry Data Security Standard, or PCI DSS, was issued last April  (here’s the proof. Certificates are valid for a year). This suggests according to Digital Transaction News, that the bad guys have found a way around the industry standard level of protection.

Also remarkable is this: The company chose to release the news on Inauguration Day, a fact that has rightly prompted accusation the company is burying the news. The company has played down the seriousness of the breach, saying that not enough information was revealed about individual cards for identity theft to be an issue, while at the same time suggesting that it’s part of a wider “cyber fraud operation.” I’m not sure it can have it both ways.

The company but has set up a website for concerned individuals at 2008breach.com. (Note the cute use of last year to make it seem like something of historical interest only—or maybe 2009breach.com was already taken? That doesn’t seem to have stopped worried customers trying to log on; as of writing the website, and those of the company, are down—possibly because of visitor traffic.)

Apart from the insubstantial response of HPS itself, it’s worth pointing out that this kind of attack is not new. CardSystems, another processor was breached in 2005—apparently via malware which grabbed data it was storing (rather than processing.)

I was kinda skeptical back then of the way it was handled—the company itself delayed release of the information for a month. More digging suggested that the information had been available far longer. It was perhaps understandably coy, given these things never end prettily: Within a few months what was left of CardSystems was acquired by Pay By Touch, also known as Solidus Networks, just in time for it be slapped down by the FTC. Pay By Touch itself closed down last year and its website is no longer active.

What this new breach seems to tell us is that the bad guys are—and probably always have been—smarter than the good guys. Data within a payment processor like HPS does not need to be encrypted—indeed, the company argues it can’t be encrypted, because it needs to be processed—so while CardSystems was clearly in breach of the rules by storing data, HPS is arguing that it’s not.

But all this tells us is that the security measures in place to protect our data are not enough. God knows how that malware got into their computers. And why it was so hard to trace once it—or something–was known to be there. But the lesson from this miserably handled episode has to be that security and oversight need to be tightened, while transparency towards customers—the individuals who have to pick up the pieces, by scanning their monthly statements for months to come for possible fraud—has to be seriously improved.

The bigger issue, of course, is to finally wake up to the fact that malware is no longer some obscure corner of security matters, but something that affects all of us.

Image: Screenshot of the inaccessible 2008breach.com website.

Virus Hits British Defences

By | November 22, 2011
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I wrote a couple of weeks ago about how KL’s airport information system had been infected by a virus. I shouldn’t have gotten so het up. Turns out that the UK’s air force and navy have bigger problems.

ITV News reported on Friday that the Ministry of Defence’s computer network has been shut down “because of a mysterious virus that is causing wholesale disruption of MoD sites.” Among those affected were Royal Navy ships including the Ark Royal and RAF [Royal Air Force] bases including Brize Norton.

The Register quotes a statement from the “MoD that [s]ince 6 Jan 09 the performance of the MOD IT systems in a number of areas was affected by a virus.” The Register says “no command or operational systems had been affected, though many of these are based on similar hardware. Spokespersons also stated that “no classified or personal data has been or will be at risk of compromise” due to “pre-existing security measures”.”

This is less than a month after the Royal Navy announced it had switched its nuclear submarines to a “customized Microsoft Windows system” dubbed, snappily, Submarine Command System Next Generation (SMCS NG).

In 1998 the USS Yorktown was “dead in the water” for about two and a half hours after a glitch in its new Smart Ship system, which used off-the-shelf PCs to automate tasks sailors traditionally did manually. The mishap sunk the Smart Ship initiative, which was quietly dropped a couple of years later.

A report in Portsmouth Today said the virus had affected 75% of the navy’s ships, preventing sailors from sending email and performing tasks (like finding out how many sailors are joining the ship at its next port of call). A blog on the Ministry of Defence’s website denied a report in The Sunday Times that ‘all email traffic from a number of RAF stations has been sent to a Russian internet server’ as a result of a ‘worm virus that entered MOD systems 12 days ago’. (The report makes it appear like it was a Russian attack, which is unlikely. But I’m not sure how the MoD can be so sure that emails were not diverted in that way.)

Neither do I know how they can be sure that it wasn’t a targeted attack. As Graham Cluley of Sophos points out, it’s more likely it was human error. But aside from the issues that raises—just how many MoD computers are hooked up to the Internet, and how smart is this? What kind of antivirus software do they have installed on the computers that are?—I would prefer the MoD not to jump to the conclusion that it’s not a targeted attack.

The reason? We need to stop thinking about cyberwar and malware as two different things. Governments rarely launch cyberattacks. But individuals and gangs do—and they usually do it for a mix of nationalistic and commercial motives. This case probably is just a screw-up. But it’s foolish to discount the notion that the information that may have been gleaned—accidentally, perhaps—would prove of value to a government or an agency.

(Image above is the result of my trying to search the Royal Navy website for the word “virus”. )

Articles | MoD computers attacked by virus – ITV News

Another Facebook Hole?

By | November 22, 2011
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(Update: Facebook have confirmed the flaw—although it’s not as serious as it looks—and have fixed it. See comments.)

The complexity of Facebook makes it likely there are holes in its privacy. But this one, if I’m right, seems to suggest that it’s possible to access someone’s private data by a social engineering trick outside Facebook.

Today I received an email invite to join Facebook from someone I’ve never heard of. Weird, firstly, because this was not someone I think I’d have known. Weird, also, because I’m already on Facebook.

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Just to make sure, I clicked on the link to sign up for Facebook and took the option there to sign in with my existing account.

That took me to my usual Facebook page. No more mention of the dude wanting to be my friend. At no point was I given any option to let this person into my life or not.

So I Googled the guy’s name and, lo and behold, I find I’m already on his list of friends:

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Slightly freaked out, I went back to my account to see if this person was included in my list of friends. He wasn’t.

In other words, this guy can now see all my account details, and I can’t see his. Moreover, at no point have I accepted anything. All I’ve done is click on a link that said: To sign up for Facebook, follow the link below.

What I guess has happened is what happens if you click on the profile of someone who is not a friend but has sent you a message, or asked you to be a friend. In either case, I believe, that person then gets a week’s access to your profile.

I think this is dumb. But I think it’s dangerous that anyone can email me and, if I then click on a link to check out who they are, I now cede access to my information without being able to block it, or to be able to access his Facebook profile to see what kind of person can now access my data.

The Big Chill Hits Google

By | November 22, 2011
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So is Google, like, the new Yahoo?

Google is closing some of its services, or at least no longer supporting them. Which for me is a tad sad, since I’ve always loved prodding around inside the Googleplex, convinced that one day all these disparate services would come together in the same way Google Docs, Calendar and Gmail have. I thought Chrome would be the centerpiece of all this. Now, maybe not.

But no. Jaiku is now open source, meaning it’s not going to become Google’s competitor to twitter or anything like that. For me Jaiku had tons of potential because it seemed to understand that many of us work from our cellphone as much as our laptop. Anyway, it’s not going to happen.

Google Notebook is also on the deathlist. Another shame: While I never used it as much as I should have done, I have been busy divining a catch-all answer to everything, and the Notebook app, and its Firefox extension, was a key part of it. Google has said it’s no longer supporting it, but existing users will be able to continue to add and access their material.

The other thing they’re dumping is Google Video. It always took a back seat to Youtube, but for me that was a good thing. No inane comments, and no restrictions on file size. The result was a mostly classy collection of videos. Gone.

So what should we use instead?  Well much of what you do in Google Notebooks could as easily be done in Evernote, while others recommend Zoho Notebook. Jaiku? Well, Facebook and twitter, and I guess FriendFeed, have already moved into the space that Jaiku looked so likely to dominate, once upon a time.

I feel sorry for the guys who started Jaiku. They were an impressive and fun bunch, when you could understand them. I hope they walked away with a decent stash.