Verizon: Retail Data Breaches Typically Discovered By Accident

Written by Evan Schuman
April 16th, 2009

In its annual report of retail data breach statistics, the forensic analysis group at Verizon Business details a series of stats that essentially verify what most retail IT execs already knew. This year is no exception, with evidence of breaches that are discovered by accident when they’re discovered at all, successful attacks that used remarkably little sophistication and PCI holes galore.

But there’s something about seeing these conventional wisdoms substantiated with statistics that is comforting, along the lines of “Hey! We were right. But we’re also royally screwed.” With that in mind, some of the more delicious details from this new report, which was published Wednesday (April 15).

  • The Most Difficult PCI Requirements Are Ignored The Most
    This shouldn’t surprise anyone, but how closely the non-compliance aligns with difficulty level is intriguing. PCI requirements 3 (protect stored data), 6 (develop and maintain secure systems and applications) and 10 (track and monitor all access to network resources and cardholder data) were the least complied with, coming in respectively at 11 percent, 5 percent and 5 percent.

    “When one considers the prevalence of unnecessary and/or unknown data stores, frequency of SQL injection attacks, and lengthy compromise-to-discovery periods discussed extensively in this (and our last) report, this finding is hardly surprising,” the report said. “This trio of deficiencies factored heavily into many of the largest breaches investigated by our team over the past five years. Unfortunately, these statistics—and those discussed earlier regarding the low utilization of discovery and detective controls—suggest that attacks exploiting these areas will continue to be a challenge for the foreseeable future.”

    Even more frightening are some of the requirements that fared better. For example, “Do not use vendor-supplied defaults for system passwords and other security parameters” fared the second-highest—which is great—but it was observed by only 49 percent of breached merchants. Yes, that means that most of the chains (51 percent) were still using vendor defaults. *sigh*

    The most compliant requirement—”Encrypt transmission of cardholder data and sensitive information across public networks”—was mastered by 68 percent. That means that roughly one-third (32 percent in this case) of the breached merchants had been sending cardholder data in the clear over the Internet. Five percent or ten percent would be bad enough, but a full third? Something’s very wrong out there.

  • Many Chain Victims Had Never Been Assessed For PCI
    More than 75 percent “of organizations suffering payment card breaches within our caseload were found not compliant with PCI DSS or had never been audited. This status was not determined by our Investigative Response team but rather by the victim’s attestation or Qualified Security Assessor (QSA).”

  • advertisement

    Comments are closed.


    StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

    Most Recent Comments

    Why Did Gonzales Hackers Like European Cards So Much Better?

    I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
    Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
    A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
    The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
    @David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

    Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.