Banks blame merchants for data breaches
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A panel of executives from financial services firms said their industry is paying the price for retailer breaches of the Payment Card Industry Data Security standard.
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Apparently it&#39;s not just unwary individuals that fall victim to online scammers. Even large corporations, it seems, can get suckered into parting with their money by devious&#160;phishers.Case in point: Eden Prairie, MN.-based grocery chain Supervalu, which earlier this year got conned into depositing more than $10 million into two fraudulent bank accounts before recognizing the ruse. Details of the case are contained in court documents filed in connection with two forfeiture cases stemming from the incident.According to federal court filings in the U.S. District Court for the District of Idaho, the fraudulent activity took place in late February and early March this year. In the court filings, Stephen Kilgroff, Supervalu&#39;s vice president of legal affairs, said that on February 26 and 28 the company received two separate e-mails, one purporting to be from an employee at American Greetings Corp. and the second from an employee at Frito-Lay, both company-approved vendors.Both e-mails told Supervalu to send future payments for each vendor to new bank account numbers. In the case of the e-mail that purported to be from American Greetings Corp., Supervalu was advised to send payments to an HSBC account in Miami. The other e-mail advised Supervalu to send Frito-Lay payments to an account at First Security Bank in Rogers, Arkansas.Between Feb 28 and March 3, Supervalu deposited just over $6.5 million via multiple wire-transfers to the HSBC account, thinking that it was sending the money to American Greetings Corp. Similarly, on March 2 it made eight separate wire-transfers to the bank in Arkansas, depositing a total of $3.6 million to an account it thought belonged to Frito-Lay.In addition to the $6.5 million deposited by Supervalu into the HSBC account, an additional amount of $500,000 had been deposited into the same account by a second company, identified as &quot;ROHM&quot; on court documents. No information has been available concerning the second company, and it is not a party to subsequent litigation.Around March 6, according to the filings made by Kilgroff, Supervalu discovered that it had been &quot;induced&quot; into making the transfers to the bogus accounts. Following the discovery of the fraud, Supervalu quickly notified the appropriate law enforcement authorities, who managed to recover nearly all of the money before it could be withdrawn from the accounts.The recovered money is now being claimed by Frito-Lay, American Greetings and Supervalu. In making the claim to the recovered money, Frito-Lay said that it believes the money belongs to Supervalu and said supported that company&#39;s claim to ownership of the misdirected funds.&quot;However to the extent there is any determination that the ownership of these funds changed from Albertsons/Supervalu [the Albertsons grocery chain was recently acquired by Supervalu] to Frito-Lay (as a result of the attempted transfer, the misdirection, or any other development) Frito-Lay makes this claim to these funds in the alternative and subject to any claim of ownership by Albertsons/Supervalu&quot; the company said in an affidavit.A federal judge is expected to rule sometime in November on which firm should receive the recovered funds.A spokeswoman from Supervalu responded via e-mail to a request for comment. &quot;As indicated by the forfeiture complaint filed by the U.S. Attorney&#39;s Office in Boise, Supervalu was the target of attempted financial fraud,&quot; spokeswoman Haley Meyer said. &quot;Due to our internal controls and processes, we were able to quickly discover and report this to the FBI. As a result of the quick work of the Boise FBI Office and the U.S. Attorney, any funds lost are minimal.&quot;Computerworld is an InfoWorld affiliate.&#160;
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New safeguards on credit and debit card payments in shops has led fraudsters to focus on internet and phone payments, an anti-fraud agency says.
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Identity thieves may have obtained information on thousands of Wells Fargo mortgage and student loan customers.
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When data breach investigator Bryan Sartin gets a call to check into an incident involving customer records loss at a retailer, he knows that the situation most likely involves information that has been lifted from a company's point-of-sale systems.
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Banks aren't moving fast enough on requiring online customers to provide two forms of ID, the company says.
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From Russia without love Security watchers have discovered a string of malicious websites that install Trojan code, allowing hackers to compromise end-user banking credentials for more than 50 financial institutions and ecommerce websites.â¦
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Last week's changes to the payment card industry data security standard should help address some outstanding implementation issues, analysts say.
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Online credit card processor Authorize.net on Wednesday acknowledged that large-scale data attacks have disrupted credit card processing for its Internet merchants over the last week.
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German banks Postbank and Deutsche Bank said that their customers had been recent victims of Internet fraud via copycat web sites.
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Reports of data theft often conjure up images of malicious hackers breaking into remote databases to filch Social Security numbers, credit card records and other personal information.
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Several banks looking to join forces in a class-action lawsuit say that the massive breach of retailer TJX's systems revealed data on some 94 million of its customers' payment cards.
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(InfoWorld) - As more details emerge about the recently disclosed security breach at TJX Companies, lawmakers in Massachusetts are considering new laws that would put the onus for paying for such breaches on retailers and merchants, rather than banks and credit unions, the Wall Street Journal reported Thursday. In Massachusetts, Attorney General Martha Coakley is hoping to force significant changes to the manner in which companies are allowed to collect, store, and protect sensitive consumer data. "[Coakley] is looking at a number of issues and working with the legislature to see what types of measures we can implement to better protect consumers," said Melissa Sherman, Coakley's press secretary. But security and privacy experts agree that new laws, in themselves, won't prevent a repeat of the data breach experienced by TJX, which continues to increase in scope. And that the hack of that retailer's network should provide a chilling lesson to businesses that are failing to adequately safeguard their sensitive information. As illustrated by the retailer's continued discovery of new incidents of IT systems intrusion, enterprises that don't have sufficient security tools in place will have a hard time simply piecing together the details of what has happened when their data is attacked, industry watchers observed. On Feb. 21, Framingham, Mass.-based TJX announced that it had discovered a new set of IT systems intrusions that exposed the personally identifiable information of an undetermined number of its customers. Company officials said that in addition to the IT systems break-ins TJX detailed in January 2007 -- which occurred during 2003 and between May and December 2006 -- it now believes that intruders also infiltrated its databases repeatedly during 2005. TJX offered no further details regarding the nature or volume of the information that was accessed by outsiders during the newly reported intrusions, and said that the firm only recently discovered the additional incidents, which started in July 2005 and continued over a period of time that the company classified only as "subsequent dates," in a statement. The fact that TJX -- which has already been publicly chided by MasterCard International, among others, for failing to meet established data security standards -- is still unraveling the exact details of the attack serves as testament to the notion that ill-prepared businesses will struggle just to understand how and when they've been penetrated, experts said. "The scary thing is that we are learning that this type of situation is not uncommon. It's like someone broke into your house by picking the lock and only took items you wouldn't notice were missing," said Richard Mogull, an analyst with Gartner, in Stamford, Conn. "Companies such as retailers are collecting tons of information and not securing it properly, and if they don't have sufficient monitoring technology in place, which most firms do not, it's surprising that they can figure out what has happened at all," he said. Makers of security software designed to help companies fight such data loss contend that IT executives, when they first try out one of the programs, are typically shocked to find out where all their sensitive data is located and how it is being handled by employees and business partners. "Most people are really surprised by what they see. We were even shocked when we turned on the ILP technology for the first time," said Devin Redmond, director of security products at San Diego-based Websense, which acquired information leakage prevention (ILP) specialist PortAuthority Technologies for $90 million in December 2006. "It is amazing to see how much data is moving around the network and being used in ways that existing security policies don't cover," Redmond said. "For companies who haven't addressed the problem that are attacked, the biggest challenge is simply figuring out where your sensitive data might reside to begin with, and what was done to it." Privacy watchdogs said that many businesses, specifically retailers such as TJX, have been aggregating vast amounts of sensitive consumer data for years with little regard for its security. Because businesses struggle just to understand the parameters of such an attack, there is little hope that large companies will soon be able or willing to more intelligently defend their data, said Lillie Coney, associate director at the Electronic Privacy Information Center (EPIC) in Washington, DC. -- even when faced with glaring examples of what can go wrong. "Incidents like the one experienced by TJX provide the best argument for not holding onto large amounts of sensitive information, but there's no evidence yet that these events have pushed other companies to improve their own data security efforts," Coney said. "This is exactly the situation that the criminals want; they can move in and steal the data and it's hard to tell what they made off with, which lets them keep doing business longer." One of the major problems in convincing companies to invest in technologies to defend information from internal and external threats, experts said, is that security workers still have a hard time justifying the cost of expensive new tools to senior executives, who want to know why the systems they've already installed aren't enough. Making a case for how a data breach could affect a company's bottom line should be simple, but many business leaders are unwilling to dip into their coffers for new IT defense systems, EPIC's Coney contends. "If you consider the problem in terms of risk analysis and the potential cost of an incident that exposes sensitive information, including the damage to a company's reputation, it shouldn't be a hard case to make," Coney said. "But getting companies to think like that is still a challenge, as the IT workers don't have a way to position the issue from a bottom-line standpoint; eventually someone will make a case for liability with one of these breaches, and that's when people will really get it." Research company, Ponemon Institute, based in Elk Rapids, Mich., estimates that information losses cost U.S. companies an average of $182 per compromised record in 2006. However, other industry watchers, including Gartner's Mogull said there's no real way to quantify the long-term damage done to a firm's reputation by a TJX-like event. The analyst said that such incidents are causing many enterprises to reconsider their data protection policies and look into new security technologies, but few companies are taking a comprehensive approach to addressing the problem of information security and are instead focused on potential return on investment (ROI) -- a serious mistake, he said. "Companies are trying to do ROI analysis to decide what they need to spend or what they'll lose in an incident, but that's a silly way to do it. The estimates that are out there for the cost of a breach are mostly worthless because they can't take into account the long-term effect," Mogull said. "What they really need to do is find where the data is and how it is being used in their business and try to create smarter policies," he said. "Trying to piece things together after an attack has already happened clearly isn't going to cut it."
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A US credit card processing firm has been hit by intermittend and large-scale distributed denial-of-service attacks that have disrupted services.
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Consumer group Which? says banks should automatically compensate victims of online phishing frauds.
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Your credit card information is coming under more frequent attack on the Internet than ever before. A study by Symantec Corp. says electronic commerce has become the favourite target of computer hackers.
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Massachusetts' new top business regulator yesterday called on retailers to start disclosing how well they protect customer credit-card and debit-card data, an idea gaining traction after a data breach at retailer TJX Cos. last month.