A high percentage of retailers are using unprotected customer information when they test their credit card processing systems, leaving the door open to a host of security problems, analysts say.
The problems arise when retailers, seeking to test any system that might impact credit card processing (point-of-sale upgrades, operating system patches, database changes, and so on) use credit card numbers, expiration data and verification codes from actual customers. Tests even include the deduction of money from the customers account and the crediting of the retailers account.
Since no organization has created a set of secure, non-customer data specifically for test transactions, retailers have few options other than using real customer data. Many in the retail industry see this as a recipe for security disasters.
“Some 90 percent of the retailers out there dont even realize how big a problem test data security is because they dont know the test environment,” said David Taylor, president of the PCI (Payment Card Industry) Security Vendor Alliance, in Stamford, Conn. If auditors knew what to look for, “you could easily have 75 to 85 percent of retailers fail on this criterion alone.”
Although Taylor said that few retailers understand this, that ignorance is not shared by cyber-thieves looking for the easiest way to get into retail networks.
“External hackers and (ill-intentioned) internal IT people—if theyre going to attack anywhere, theyre going to attack a weak link,” Taylor said. “This is one of the most well-known weak links. If youre going to attack, this is where youre going to attack.”
The question of protecting customer data during retail POS testing is also a concern of Richard Simpson, a 21-year Bank of America veteran who recently took a newly created position at the Federal Reserve Bank in Richmond, Va. Simpsons new job—senior IT risk coordinator within the Feds banking supervision and regulation area—gives him the daunting task of “raising awareness of risks that might undermine public confidence in the U.S. financial system.” Simpson sees retail test data procedures as just such a risk.
“A vulnerability that the Fed has observed during supervisory reviews is the practice of retaining unencrypted test data. Often large amounts of data will be pulled into a separate file for use as test data to verify program patches, run volume tests or simulate production output or reporting,” Simpson said. “The proper approach for temporary data is to destroy it immediately after use, to encrypt it if future use is planned, or to mask fields containing any customer confidential information.”
But thats not typically happening, he said. “Companies often consider test data to be less vulnerable than live transaction data and, therefore, take fewer precautions. Test data may also be accessed by third parties—such as vendors and outsourcers—more frequently than live data,” Simpson said. “Yet if the test data contains reusable customer information—credit card numbers, social security numbers, name and address—it can easily be used for fraudulent purposes if accessed by internal or external hackers.”
Beyond the clear threat of cyber thieves accessing the data and penetrating the network—potentially leaving Trojan Horse programs to do more damage later—the use of such test data can also create problems later on when attempts are being made to both catch the thieves and identify what was taken.
“If a fraudulent intrusion occurs, companies often have a difficult time certifying what data was in old test files breached by hackers,” Simpson said. “This is one of many challenges faced by TJX as it has attempted to verify the number of accounts accessed by Internet criminals who hacked into their systems.”
Some retailers have tried to mitigate the damage by using older customer data, on the belief that such data would have outdated information that might be less valuable if intercepted. But Mark Rasch, the former head of the U.S. Justice Departments high-tech crimes unit and currently a security consultant in Washington, questions that premise.
“The fallacy is that there is something called old data,” Rasch said, adding that most credit card information—including name, address and often the credit card number itself—does not change with any frequency. “Whats personal about me tends to remain personal even with the passage of time,” he said.
The credit cards expiration date will periodically change, but Rasch said theres such a small number of possible month/year combinations in the typical 2-year period that a thief could simply try them all until the right combination was discovered.
Rasch also has concerns about whether the use of such information for network testing violated “the implicit agreement between the merchant and the customer” that “you get my data for certain purposes, primarily to sell me the product and to validate payment.”
As for why test data hasnt been created to safely test systems, Rasch said its a matter of money. To make it work, the test data would have to have a lot of numbers, with segments created to replicate various banks and other processors. It would do a retailer little good, for example, to test a Visa connection using a MasterCard number or even a card number from one major bank when testing a different banks card. “The question really is, Whos going to pay for it?,” Rasch said.
Money is also behind the lack of security on the networks transmitting the test data, said the PCI Security Vendor Alliances Taylor. “These people are operating on a limited budget. What you secure first is the production environment and anything that is outwardly facing,” he said.
As for protecting the data itself, thats a combination of laziness coupled with cheapness, Taylor said. There is a way to properly sanitize test data, he said, but its a lot of work.
He cited one insurance company that was testing with non-sanitized test data. “They didnt have any way of generating test data on an enterprise basis. No tools, no procedures, not even a policy. They had no system-level prevention at all,” Taylor said. “They were using production data without masking, without encryption, without scrambling.”
Why? “Hey, its hard. Unless someone makes them do it, theyre not going to do it,” Taylor said. “You need policies. Its so much easier to just copy production records.”
Is there a way out? Taylor said such numbers could be created by a group of card issuers coordinated by some overarching entity, such as Visa or some other industry group. Why has it not yet happened? Said Taylor: “I just assume its not their priority.”
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