February 05, 2014, 11:33 AM — Target, Neiman Marcus and, most recently, the Michaels chain of craft stores have dominated the security and the mainstream news over the last few weeks, following their embarrassing losses of consumer and cardholder data. The massive scale of these data breaches has resulted in outrage among the general public, who are no longer confident in these retailers to protect their confidentiality. I'm not surprised by any of this.
In fact, I have to wonder which retailers have not suffered breaches. The word on the street is that at least a half-dozen other retailers were compromised in the past few months, without publicity. I've done work for a couple of large retail companies, and I was stunned by how little they spend on information security compared to similarly sized companies in other segments of the economy. I suspect this is true for most companies in the retail sector, where profit margins are paper-thin and every dollar counts. That can make it hard to get funding for expensive security technologies and the specialists to operate them. Therefore, I think it's safe to assume that for most retailers, protections are not up to modern standards, and there is generally low security awareness among decision-makers.
One retailer I worked with purchased a new point-of-sale (POS) system because it streamlined the customer experience. But it didn't fund a proper security assessment of the new technology. Nonetheless, it went ahead and hooked the POS terminals right up. To the Internet. Directly. That means all of its sales terminals were exposed to every possible scan and attack routinely making the rounds of the Internet, without any monitoring or defenses.
It would help if retailers had an incentive to care about data theft. Unfortunately, U.S. federal law holds the banks responsible for all fraud losses due to the use of stolen card numbers, even if a retailer's faulty security was clearly to blame for the data loss. In that environment, it's not surprising that retailers' attitude is that data loss is not their problem. It takes a really big breach to make them think that maybe it is their problem; attacks on the scale of the Target breach do tend to focus the mind, since they can lead to wary customers shopping elsewhere, which affects the bottom line.
What I think is that the POS terminals at the big retailers whose breaches hit the news lately were not properly secured or monitored. How can I say that so confidently? Because proper network security would probably have neutered the malware that absconded with the data, and proper monitoring (as in IDS and SIEM) would definitely have detected the massive amount of data exfiltration. Gigabytes of confidential data were flying out of those retailers' networks without being noticed. A well-tuned data and security monitoring system would have caught that and sent out alerts.
While I'm excoriating these retailers' security practices (or lack of same), I can't leave out Target's "message to our guests," because it demonstrates complete obliviousness regarding security issues. After several days of reminding my company's users (and my family and friends) to watch out for the scam emails that would surely follow the Target breach, Target's knucklehead CEO sent out an email with all the hallmarks of those scams -- the appearance was the same, it was not personalized (it started, "Dear Target Guest"), and the email account used to send the message (the "From" address) was not target.com, but the mysterious bfi0.com. How is anybody supposed to tell this real message from the plethora of fakes?
Why am I being so hard on the "victims" (by which I mean the breached retailers)? Partly because I think they should have done more to prevent these breaches before they happened. But it's also because I'm frightened by the scale and specificity of these attacks -- they were focused on specific retailers, during a specific period of time (the holidays), and targeted the POS terminals. This was a big op, run by professionals who know what they are doing. And I fear the day when attackers like them turn their attention to me.
This week's journal is written by a real security manager, "J.F. Rice," whose name and employer have been disguised for obvious reasons. Contact him at firstname.lastname@example.org.
To join in the discussions about security, go to blogs.computerworld.com/security.
Read more about security in Computerworld's Security Topic Center.