Target Breach Appears to Be Part of Broader Scam

By Anne D'Innocenzio
|  Friday, Jan 17, 2014  |  Updated 2:12 PM EDT
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The security breach at Dallas-based Neiman Marcus went undetected for six months, customers didn't find out about the issue until last week.

Kendra Lyn, NBC 5 News

The security breach at Dallas-based Neiman Marcus went undetected for six months, customers didn't find out about the issue until last week.

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Target Security Breach Part of Broader Retail Scam

A Dallas-based global intelligence firm released its report on the Target security breach and discovered that a malicious program vacuuming personal data from terminals at store check-out stations was "almost certainly derived" from BlackPOS, a crude but effective piece of software that contained malware scripts with Russian origins.

Neiman Marcus Updates on Credit Card Breach

Neiman Marcus Group Ltd. said that customers' Social Security numbers and birthdates to its knowledge were not stolen in a security breach that happened over the holiday season.
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The security breach that hit Target Corp. during the holiday season appears to have been part of a broader and highly sophisticated scam that potentially affected a large number of retailers, according to a report published by a global cyber intelligence firm that works with the U.S. Secret Service and the Department of Homeland Security.

The report, made public Thursday by iSight Partners of Dallas, offers more insight into the breach at Target. That attack affected 40 million credit and debit card accounts and led to the theft of personal information, including email addresses and names, of as many as 70 million customers.

The report said that a malicious program vacuuming personal data from terminals at store check-out stations was "almost certainly derived" from BlackPOS, a crude but effective piece of software that contained malware scripts with Russian origins.

"The use of malware to compromise payment information storage systems is not new," the report said. "However, it is the first time we have seen this attack at this scale and sophistication."

Starting in June, iSight noticed the malicious software codes on the black market, the report said.

Criminals bought the original malware on the black market and then created their own attack method to target retailers' terminals at store checkout stations, iSight Partners' CEO John P. Watters said.

“Criminals can now target widely point of sale systems by using the same capability you can buy online,” Watters said to NBC 5.

Watters would not comment on Target, but explains that right now, there is sophisticated software for sale. Software that if gets into the right hands, can infiltrate systems of retailers, and get your credit card data, before it is encrypted.

"It's less about the malware, but more about the sophistication of the attacks," Watters said in an interview with The Associated Press.

The report noted that because this kind of software can "cover its own tracks," it's not possible to determine the scale, scope and reach of the breach without detailed forensic analysis.

"Organizations may not know they are infected," the report said. "Once infected, they may not be able to determine how much data has been lost."

Last week, Neiman Marcus said thieves stole some of its customers' payment information and made unauthorized charges over the holidays. At the time, it said that was working with the Secret Service on the breach.

The iSight report doesn't list the names of retailers and the intelligence firm says it can't discuss whether the malicious software specifically affected Target, Neiman Marcus and other retailers. However, the report offers the latest evidence that the attacks on Target and Neiman Marcus are related and that other retailers may have been victims of a broader data scheme.

Molly Snyder, Target spokeswoman, said that the retailer did not have any details to share on the report at this time.

Citigroup said it will replace all debit cards affected by the data breach at target as a precautionary measure.

Neiman Marcus Group said Thursday that, to its knowledge, customers' Social Security numbers and birthdates were not stolen in the security breach.

The luxury retailer, based in Dallas, also confirmed that customers who shopped online do not appear to have been affected, and said personal identification numbers, or PINs, were never at risk because the retailer does not require PIN pads in its stores.

Neiman Marcus's spokeswoman Ginger Reeder declined to say how many people were affected by the scam, noting that the investigation is still ongoing.

"We know what type was not captured, based on what information we capture," she wrote in an email to The Associated Press.

NBC 5's Julie Fine contributed to this report.
 

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