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Brian Pennington

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Merchants are more concerned about their brand than PCI fines

Image representing Cybersource as depicted in ...
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A joint CyberSource and Trustwave survey has shown that nearly 70% of Merchants cited the need to “protect the brand” as the primary driver for tightening controls against hackers and other payment security risks.

Only 26 percent said avoiding fines resulting from non-compliance with the Payment Card Industry Data Security Standard (PCI DSS) were the key motivator.

A few highlights from the report include:

  • Brand Protection is Key Driver of Investment: The need to protect the organization’s brand and its revenues was given as the primary driver for investment in payment security.
  • Threat from External and Internal Sources Perceived as Equal: While the successes of external hackers often make headlines, employees can be an equally damaging source of risk. The survey found that organizations perceive the threats from internal and external sources as being nearly equal.
  • Trend Towards Remote Data Storage: With the need to secure payment data and efficiently comply with PCI DSS, organizations are planning to shift their payment data security approach from an on-site strategy to a remote one. Those organizations that had already made the shift reported shorter time-to-compliance and fewer full-time equivalent employees managing payment security.
  • Payment Security Cost and Complexity Expected to Increase: Most survey respondents expect that the technological complexity, cost, and resources required to manage payment security will increase over the next 24 months.

A breach has serious consequences for nearly every division of an eCommerce merchant’s organization,” said Dayna Ford, Senior Director, Product Management at CyberSource. “But by far the most damaging impact is to the company’s brand, affecting revenue, customer loyalty, and even stock valuation. Knowledge of this phenomenon is now widespread, so we’re not surprised at the survey finding that puts brand integrity as the most important rationale for payment security investment.”

In the face of increasing numbers of security breaches and data theft, there’s a real urgency for organizations to deploy powerful and effective security strategies,” said James Paul, Senior Vice President of Global Compliance Services at Trustwave.  “Studies like ‘The Payment Security Practices and Trends Report,’ published today, should help organizations learn best practices and likely costs to attain appropriate levels of security.”

Selected survey findings

  • Data moving out:  Over the next 24 months, an increasing proportion of organizations expect to remove payment data from their environment as a way of reducing security risks.
  • Efficiency improving: Organizations that do not capture, transmit, or store data inside their own network tend to employ fewer personnel, validate PCI DSS compliance more quickly, and operate at a lower overall cost of payment security management.
  • “Data out” merchants spend less on infrastructure: 75 percent of PCI DSS Level 1 merchants  that have removed payment data from their environments spend less than $500,000  on their payment security infrastructure.  Only 60 percent of those that keep data in-house can make that claim.
  • Risk not confined to outsiders:  In one counter-intuitive finding, respondents said they felt the threat of payment data theft from inside employees was about equal to the threat from external hackers.

Read the full report here, registration is required.

Learn more about the Payment Card Industry Data Security Standard (PCI DSS) by visiting my PCI DS Resources page here.

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The ICO judgment on Lush after the breach of 5,000 people’s bank details

Christopher Graham, the UK Information Commiss...
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 7 months after the disclosure of the data breach at Lush Cosmetics Ltd the Information Commissioners Office (ICO) has delivered its findings and has imposed its actions against Lush.

The ICO has announced:- 

Cosmetics retailer Lush breached the Data Protection Act after the security of its website was compromised for a four month period, the Information Commissioner’s Office (ICO) said today. The breach, which occurred between October 2010 and January 2011, meant that hackers were able to access the payment details of 5,000 customers who had previously hopped on the company’s website.

As a result of the breach, the ICO has required Lush to sign an undertaking to ensure that future customer credit card data will be processed in accordance with the Payment Card Industry Data Security Standard. The ICO is taking this opportunity to warn online retailers that if they do not adopt this standard, or provide equivalent protection when processing customers’ credit card details, they risk enforcement action from the ICO.

Lush discovered the security lapse in January 2011 after receiving complaints from 95 customers who had been the victim of card fraud. After making enquiries, Lush found out that their website had been subject to a hacking incident which had allowed hackers to access their customers’ payment details. On uncovering the incident, the security of Lush’s website was immediately restored.

The ICO’s investigation found that, although the company had measures in place to keep customers’ payment details secure, they were not sufficient to prevent a determined attack on their website. The retailer’s methods of recording suspicious activity on their website were also insufficient, which delayed the time it took them to identify the security breach.

Acting Head of Enforcement, Sally Anne Poole said: “With over 31 million people having shopped online last year, retailers must recognise the value of the information they hold and that their websites are a potential target for criminals.

“Lush took some steps to protect their customers’ data but failed to do regular security checks and did not fully meet industry standards relating to card payment security. Had they done this, it may have prevented the fraud taking place and could have saved the victims a great deal of worry and time invested in claiming their money back. This breach should serve as a warning to all retailers that online security must be taken seriously and that the Payment Card Industry Data Security Standard or an equivalent must be followed at all times.”

Mark Constantine, Managing Director of Lush Cosmetics Ltd, has signed an undertaking committing the retailer to taking necessary steps, including that the company only stores the minimum amount of payment data necessary to receive payments, and that this information will not be kept for longer than is necessary. All future payments will also be managed by an external provider compliant with the Payment Card Industry Data Security Standard and the retailer will also make sure that appropriate technical and organisational measures are employed and maintained.

It is understood that Lush now uses Netittude to do penetration testing, Trustwave to secure its payments system, and RBS Worldpay to process transactions.

Related articles:-

25/2/2011 Lush once again trading

15/2/2011 Lush confirm their Australian Website has been hacked

PCI Compliance Risks for Small Merchants and where they are failing

Credit cards
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Trustwave have released a supplement to their 2011 Global Security Report on Payment Card Trends and Risks for Small Merchants report.

According to the report, Merchants fail to achieve PCI DSS compliance in several areas with the Top 6 being:

99.2%   Track / Monitor Network Access
98.4%   Regularly Test Security
97.5%   Maintain a Firewall
95.1%   Maintain Internal Security Policies
92.6%   Assign Unique User Ids
90.9%   Develop Secure Systems and Applications

The report states, “approximately 90% of compromises came from the Level 4 merchant space in 2010.” The PCI DSS categories a Level 4 merchants as a businesses that process less than 20,000 Visa e-commerce transactions annually, and all other merchants processing up to 1 million Visa transactions annually.

The top 5 Industry Sectors that experience a PCI DSS compromise are:

57.0%   Food and Beverage
18.0%   Retail
10.0%   Hospitality
6.0%   Government
6.0%   Financial

Breaches occur in 5 specific areas with the majority occurring because of weaknesses in software:

75.0%   Software POS
11.0%   Employee Workstation
9.0%   e-commerce
3.0%   Payment Processing
2.0%   ATM

The Report has the Top Five Areas where Merchants are Falling Short of Compliance as:

  1. Do you have written security policies and procedures that address the protection of paper with credit card numbers such as receipts and the physical security of your card processing device?
  2. Do you have a formal training program for all relevant employees that teaches them about security as it relates to credit cards, paper with credit card numbers on them and the devices that process credit card transactions?
  3. Do you or does anyone at your business log or record your customers’ credit card numbers in a computer, for example, in a back office computer, a laptop or financial application?
  4. Do you check your store or office for unauthorized wireless access points on at least a quarterly basis?
  5. Do you perform external (Internet) network vulnerability scans at least once per quarter?

Cost of non-compliance

Trustwave’s Report states “Fines have averaged $5,000 to $15,000 per card brand. We see forensic investigations start in the $10,000 to $15,000 range as well. Card re-issuance and fraud loss are dependent on the size of the breach. However, fines can vary greatly depending on a number of factors and can reach into the hundreds of thousands of dollars in some cases”.

Trustware www.trustwave.com

See the PCI Resources page for more details on PCI DSS

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Where do security breaches occur? What type of data is stolen and who makes the discovery?

Credit card
Image via Wikipedia

Trustwave has published its Global Security Report 2011 and it has some very interesting research.

The research is from incidents investigated by the company. Specifically, a total of 220 investigations, undertaken against suspected breaches, 85% were confirmed with 90% resulted in data theft.

The headline statistics are:

Industry breakdown of where the incident happened

  • Food and beverage   57%
  • Retail   18%
  • Hospitality   10%
  • Government   6%
  • Financial   6%
  • Education   1%
  • Entertainment   1%
  • Construction   1%

 Types of Data stolen

  • Payment Card Data   87%
  • Sensitive company data   8%
  • Trade Secrets   3%
  • Authentication Credential   2%
  • Customer records   2%

It could be that Trustwave is a Payment Card Industry Forensics and Incident Investigator or it is further proof, if we needed it, that the bad guys are after the money.

Who found out that there had been an incident?

  • Regulatory detection   60%
  • Self detection   20%
  • Public detection   13%
  • Law enforcement   7%

Is it any wonder why the credit card issuers are strictly enforcing Payment Card Industry Data Security Standards (PCI DSS) when Merchants find 1 in 5 Account Data Compromises (ADC), also known as a breach.

Previous research found that the majority of cards are used in multiple frauds.

Merchants come out on top in the time to detect a breach

  • Regulatory detection  156.5 days
  • Public Detection   87.5days
  • Law Enforcement   51.5 days
  • Self Detection   28 days

This is interesting, 1 in 5 breaches were found first by a Merchant which means the majority of breaches take over 100 days to be discovered.

Trustwave www.trustwave.com

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