Forever 21, DSW Clarify Their Data Breach Details

Written by Evan Schuman
September 15th, 2008

Two major retailers—Forever 21 and DSW—have for the first time released small details about their roles in what has become known as the TJX Breach, the worst ever recorded in credit card history.

On Friday (Sept. 12), Forever 21 issued a statement saying that the chain had been wirelessly breached repeatedly between Mar. 25, 2004, and Aug. 14, 2007, and that thieves "accessed older credit and debit card transaction data for approximately 98,930 credit and debit card numbers," including about 20,500 card numbers taken from one particular store in Fresno, Calif. "The data included credit and debit card numbers and, in some instances, expiration dates and other card data, but did not include customer name and address. More than half of the affected payment card numbers are no longer active or have expired expiration dates."

It’s not clear what the "other card data" was, but expiration date retention was likely not in compliance with PCI rules. It’s possible, however, that data could have been grabbed during authorization verification. Forever 21’s statement said that "our systems have been certified to be in compliance with the PCI standards, including the data encryption standards," but it didn’t say specifically when they were certified, other than "since 2007."

The Forever 21 statement was also vague on information about how and when it learned of the breach. Similar to a statement issued by fellow TJX Breach victim Barnes & Noble, Forever 21 now says that it was contacted by the U.S. Secret Service on the morning of Aug. 5, 2008, "and was advised that our company was identified in the indictment as one of the retail victims."

Unclear in the statements released by both Forever 21 and Barnes & Noble was whether the retailers had known of the breach prior to that Secret Service phone call. Had the Secret Service, which had been working the case for more than a year by then, already alerted those retailers that they were victims, meaning that the Aug. 5 call was merely to indicate that it was unsealing an indictment naming the chains as victims? Or had Forever 21 learned of its breach elsewhere? For example, through its own security mechanisms or those of its issuing bank or a credit card company.

DSW has clarified that part of its saga. Chief Technology Officer Jon Ricker said that his IT people had detected the incident sometime after the breach had concluded and that that was how the company learned of it.

That makes DSW at least the second retailer to now say that its system detected the intrusions, albeit after-the-fact. The first was a retailer referenced in the federal filings but not identified by name. StorefrontBacktalk has spoken with a representative of that chain but has agreed to not identify it publicly.

But the Forever 21 statement also raises a question of whether there are other retail chain victims of this breach that the government has not revealed. In the statement, Forever 21 said: "On August 5, 2008, the U.S. Department of Justice in Boston filed indictments against 3 individuals alleged to have committed crimes involving credit card fraud against 12 retailers."

For the record, the federal charges—which were not only indictments but also informations—included charges filed in California and accused a total of 11 individuals, one of whom has already pleaded guilty.

The interesting part of the Forever 21 statement is not the reference to only three defendants. Rather, it’s the reference to "credit card fraud against 12 retailers." Setting aside that the alleged fraud involved not just credit card but also debit card fraud, the federal charges didn’t identify 12 retailers. The charges mention only eight by name: TJX, BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW.

With the previously referenced mystery merchant, that brings the number to nine. Are there three more unknown retail victims of this breach? Representatives of Forever 21 couldn’t be reached for comment.


One Comment | Read Forever 21, DSW Clarify Their Data Breach Details

  1. Della Lowe Says:

    They were breached “multiple times” for over three years!!! How do you spell WIPS? There is no way that anyone should be using a WLAN without having a way to understand what is in the air, who is connected to them and how to stop it. When these breaches started the wireless intrusion prevention industry was in its infancy but certainly any IT person should have been keeping up with developments and understood that once you have a WLAN you need to go beyond the security measures you have been using for your wired side network. I would be willing to bet that this is just the tip of the iceberg. Does anyone wonder just how many other companies could be out there and still not know they have a sycophant sitting on their network. Wireless security is no more an optional technology than is your front door lock or your firewall.


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