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Is the Barnes & Noble Breach By The Same Gang That Hit Michaels, Aldi and Hancock Fabrics?

October 24th, 2012

It really does sound like this summer’s sequel to Michaels, Aldi and Hancock. That would also explain why B&N has pulled all of its PIN pads: Last year, Michaels replaced all of its PIN pads after its breach, so the bar has been raised.

And if it really is the same criminal gang (or a copycat gang that’s learning from its predecessor), we can expect the crooks to sort the stolen card numbers by BIN, so patterns will be harder to track, in addition to farming out the work of using counterfeit cards to get cash from ATM machines—probably to street gangs.

These thieves have it down to a business. It seems likely that they’re selecting chains based on whether the PIN pads are an older model, how well-secured PIN pads are in the stores, how often POS lanes are unattended, whether there are Loss Prevention personnel on the floor, and how quickly a PIN pad can be disconnected and a tampered PIN pad swapped in.

Then they’re hitting between 50 and 100 of the chain’s stores—fewer than a dozen in each locale—and apparently no other chains are being hit at the same time.

That suggests there are measures chains can take to make themselves less attractive targets. One is to screw down each PIN pad (or, alternatively, keep them off the counter until a customer actually needs one), so quick pad swaps are impossible. (Failing that, you might want to carefully examine all your PIN pads once the holiday season is over for any signs of tampering. The swaps seem to have begun in the spring, but you never know.)

Another measure is to upgrade PIN pads to models that lose their encryption if tampered with, and to closely monitor network activity logs to spot when any pad is disconnected. As QSA and StorefrontBacktalk PCI Columnist Walter Conway pointed out two years ago about the Aldi breach, “There should be huge red flags in the logs if anyone disconnects a terminal. That should immediately trigger an alert.”

But it’s the visible signs of better PIN-pad security that are most likely to ward off this group of thieves. They appear to be picking one big target per year, and they’re probably going after the softest target they can find. The harder you make it for them, the less attractive you’ll be. And you don’t have to be the most secure chain in the world to avoid being hit by this gang—you just have to avoid being the most attractive.

As for Barnes & Noble, no matter how secure the bookseller thought it was (and how clean a bill of health it has from its own QSAs), we can now expect Visa and MasterCard to yank the chain’s PCI compliance. We can also expect a few class-action lawsuits to surface soon.

And if the rest of the industry is really lucky, everyone will have until next spring to avoid being chosen as the PIN-pad gang’s Chain Of The Year for 2013.


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Why Did Gonzales Hackers Like European Cards So Much Better?

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