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Largest Data Breach Disclosed During Inauguration
rmogull writes "Brian Krebs over at the Washington Post just published a story that Heartland Payment Systems disclosed what may be the largest data breach in history. Today. During the inauguration. Heartland processes over 100 million transactions a month, mostly from small to medium-sized businesses, and doesn't know how many cards were compromised. The breach was discovered after tracing fraud in the system back to Heartland, and involved malicious software snooping their internal network. I've written some additional analysis on this and similar breaches. It's interesting that the biggest breaches now involve attacks installing malicious software to sniff data — including TJX, Hannaford, Cardsystems, and now Heartland Payment Systems." One bit of good news out of this massive breach is that, according to Heartland's CFO, "The nature of the [breach] is such that card-not-present transactions are actually quite difficult for the bad guys to do because one piece of information we know they did not get was an address." Heartland just put up a press release on the breach.
The implication is that they timed the announcement to occur when no one is paying attention.
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Nearly every company that suffers a breach like this tries to assure people about what the bad guy's didn't manage to steal. Don't believe it. Even if it might be true at the strict technical level, it's still not relevant to the analysis of the severity of this issue. The bad guys already have databases full of names and addresses which they will cross reference against the data they stole.
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Same reason Clear Channel laid off 8% while this was going on. :-)
Let's also not overlook that while some stores/merchants may have a policy to ask for address when doing Cardless Transactions, the processing houses (at least the ones I've used) will more than happily process the transaction successfully without anything more than the card number and the expiration date.
Some processors will refuse to process transactions within the month that the card expires, but you simply add 4 years to the date and it'll go through just fine.
The Credit Card companies have pushed very hard and very long to make credit transactions more painless than cash. You have to drop some safeguards to do that though.
Some clueless person says this every time there is a story on credit cards.
Visa/MC do not end up paying. Merchants on the receiving end of fraudulent transactions do. Visa/MC may even profit from it as the fees they charge merchants for chargebacks can be quite steep.
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Because they are the ones processing the transactions. We don't use heartland, but when take online orders through our website, we don't store the credit card information, our CC Processor does. The processors are the one that actually run the transactions, take money from the customers account, take a percentage, then deposit to the merchants account. And they have to keep records of all that.
In order for CC payment to work someone has to store that data somewhere.
"The problem with socialism is eventually you run out of other people's money" - Thatcher.
No, they are liable and are going to pay through the nose, but not for "identity theft". They will be responsible for improperly securing their network and permitting the theft of the cards. But identity theft is a different beast. No one will be able to sign up for new credit cards and or loans in the names of the people whose data was compromised.
Well.. maybe. Or Maybe not. But Definitely not sort of.