Research Suggests Backoff Malware Still Widely Infecting POS Systems

By Robert Lemos  |  Posted 2014-10-28 Print this article Print
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The number of victims of the Backoff point-of-sale malware has doubled in two months, helping cyber-criminals steal data, according to data collected by Damballa.

A malicious program targeting the retail computer systems used to process credit- and debit-card transactions has continued to spread, doubling the number of infected systems in two months, despite efforts to curb its propagation, according to data from network-security firm Damballa.

The program, known as Backoff, infects the point-of-sale computer terminals used by cashiers to process payments, allowing cyber-criminals to collect and steal shoppers' payment card data. In August, the U.S. Secret Service warned that at least 600 retail companies had been infected by the software.

Damballa monitors network traffic for its clients, including retailers, and discovered that traffic indicative of a Backoff infection climbed 57 percent in August and another 27 percent by the end of September, doubling over the two months.

"Retailers have not made the changes needed to fight Backoff," Brian Foster, chief technology officer for Damballa, told eWEEK. "In many cases, they are relying on third parties and those providers have not made the changes either."

Backoff first came to light in July, when the U.S. Computer Emergency Readiness Team warned retailers that cyber-criminals were widely deploying the malware. The number of companies affected by the malware has risen over 1,000, according to the U.S. Secret Service, which along with the FBI investigates and prosecutes financial crimes.

A large number of retailers have been breached in the past year, including the theft of data from 40 million payment-card accounts at Target stores during the 2013 holiday shopping season and the compromise of 56 million customer accounts at Home Depot between April and September of this year. While Target and Home Depot were compromised using other types of malware, smaller companies, including Dairy Queen, have blamed Backoff.

Backoff does not automatically spread, as would a virus or worm program. However, cyber-criminals have widely targeted retailers with phishing campaigns and other large-scale specialized attacks. Because attackers can easily modify the programs until antivirus fails to detect them, companies need other defenses, Foster said.

"If a retailer is relying on antivirus to protect their point-of-sale machines from malware that is focused on stealing financial information for monetary gain, they are going to lose," he said. "It is still not clear to me that a lot of retailers have got that message."

The success of Backoff and other malware is not necessarily because attackers are becoming more sophisticated, but also because defenders have trouble spotting malicious activity in their network, according to the Damballa report.

In the third quarter, the average company had 37 infected devices on their network, but the complexity of corporate networks and the lack of security intelligence systems mean that companies process tens of thousands of security events each day to find those infected machines, according to Damballa's data.

"With actionable intelligence, security teams can focus on infections that matter and get control of their workflow," the report stated.


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