Cyber-thieves who hacked into the ATM information of at least 800 retail customers in California and Oregon have stolen as much as $700,000 from personal accounts during the last two months, according to police reports.
People who used ATM cards to purchase items at Dollar Tree, a national retail toy store chain, in Modesto and Carmichael, Calif., and Ashland, Ore., have turned in reports of unauthorized withdrawals in the computer-based scam.
Federal and local investigators would not discuss with eWEEK how the thieves stole the information. How many shoppers have been victimized is also an open question.
Brady Mills, supervisor of the Sacramento field office of the U.S. Secret Service, confirmed to eWEEK Aug. 4 that the agency is investigating the thefts and that the bureau has been on the case for about two months.
But Mills would only say that the case is "ongoing" and wouldnt offer any more details about possible suspects or about the process in which the money was stolen.
Dollar Tree Stores is a U.S.-based chain of retail stores headquartered in Chesapeake, Va. Every item sold in the stores is offered for either $1 or less, thus making it a true dollar store. As of July 29, 2006, Dollar Tree operates 3,156 stores in 48 states.
Dollar Tree customers in Modesto began reporting unauthorized ATM withdrawals from their bank accounts on June 12, a report in the Modesto Bee newspaper said.
Local police said that more than 600 accounts were drained of approximately $500,000, according to the report.
On Aug. 1, police in Ashland confirmed that at least 200 people lost more than a total $200,000 due to unauthorized bank account withdrawals after shopping at Dollar Tree stores in the Rogue Valley region of southern Oregon.
In the Sacramento suburb of Carmichael, a shift manager at the Dollar Tree store told eWEEK on Aug. 4 that there hadnt been any ATM-related theft reports for "about two or three weeks" but did confirm that there were "a number of ATM theft claims filed at the store in June and July."
She referred eWEEK to Dollar Tree Store headquarters, which was closed for the day.
Although the details of how the cyber-thieves actually pulled off the Dollar Tree scam are not publicly known, there are some common scenarios that have been known to be troublesome for the ATM/credit card companies and their customers, Dr. David Taylor of enterprise data security specialist Protegrity in Stamford, Conn., told eWEEK.
"Id say its most likely that an insiders information was compromised somehow," Taylor said.
Taylor mentioned that there are plenty of federal and state regulations about how encrypted financial data is transferred from location A to location B through a corporate network via the Internet, wireless and phone lines.
"But what about all that unencrypted data [for the days receipts and for backup purposes] thats still sitting around at the point of sale? Thats the [identity and credit card] information thats ripe for the picking," Taylor said.
National chains like Dollar Tree are often franchised to individual owners who often dont have the money to fully secure their sales data as well as a corporate data center.
"If a company has 100, 200 or more stores, that starts getting pretty expensive to completely secure each location," he said. "Generally, local store systems are poorly protected."
Taylor said that the main problem is in the passwords that applications use to communicate with servers.
"The passwords that apps use to link up with servers are often not changed for long periods of time—and they certainly are not as easy to change as a persons PIN," he said.
All a hacker has to do once he or she has compromised a system—through phishing, pharming or some other method—is to know where the right logfiles are on the system during a batch job, and the personal information is easy to obtain, Taylor said.
According to Taylor, IT security administrators are loathe to take down systems more than a few hours at a time every year to change application passwords because so many businesses rely on 24/7 online and ATM purchase systems.
"Business people dont want to see the system down for maintenance like this because they have made commitments to keeping it up for customer service on a round-the-clock basis. Its a real problem," Taylor said.
The bad guys already know all this information, and "what we need is for more of the good guys to know this and do something about it," he added.