Neiman Marcus Acknowledges 1.1 Million Accounts Compromised

In a public statement, the company confirmed speculation that its network had been compromised using techniques similar to those used to hack Target's systems.

Neiman Marcus confirmed that the company had become the latest retail chain to have been breached by online thieves, who stole more than 1.1 million credit- and debit-card accounts from the company's computers.

In a statement published online on Jan. 22, Neiman Marcus President and CEO Karen Katz said retail terminals had been infected with "scrapers" that copied unencrypted card details during transactions and sent them to collection servers. While the attackers got full card details, PINs and Social Security numbers were not compromised, nor were online shoppers impacted by the breach, she said.

"We deeply regret and are very sorry that some of our customers' payment cards were used fraudulently after making purchases at our stores," Katz wrote. "We have taken steps to notify those affected customers for whom we have contact information. We aim to protect your personal and financial information."

In mid-December, the retailer's credit-card processor notified the company that its customers had become the victims of fraud. On Jan. 1, an incident response firm hired by Neiman Marcus found evidence of the intrusion, the company said in its statement.

The admission that Neiman Marcus systems had been compromised follows a massive breach at retail giant Target, which the company confirmed in late December. According to statements, attackers breached Target's systems and stole as many as 110 million records, including 40 million credit- and debit-card accounts, from its systems. Similar to the Neiman Marcus breach, scrapers were involved in the Target attack.

Unlike Target's breach, which lasted approximately 20 days, the attack on Neiman Marcus was active for a longer period, from July 16 and Oct. 30, 2013, the company stated. During that time, malware inside the company's network collected details of 1.1 million card accounts.

Target and Neiman Marcus are not the only retailers to have been targeted by cyber-criminals in the past year, the FBI has reportedly stated. In a confidential report sent to retailers, the federal law enforcement agency said that at least 20 retailers were attacked by criminal groups, according to a Reuters article. The groups are using malware that infects and steals information from point-of-sale terminals, the report confirmed.

On Jan. 21, the National Retail Federation, which represents retail chains in 45 countries, sent a letter to Congress stating that the attacks show that it's time to adopt more secure payment card technologies. "Chip and PIN" technology, which stores card details on a chip embedded in a payment card, has been embraced in Europe, but historically U.S. retailers have balked at the cost of the hardware needed to process transactions at the point of sale.

That has now changed, the NRF stated.

"Only by working together will consumers' financial data be protected from criminals—that is why it is time for our partners in the card industry to invest in next generation technology to secure sensitive bank card data," Matthew R. Shay, president and CEO of the NRF, stated in the letter. "Adopting 'PIN and Chip' security measures in the U.S. ... would be a good start."

Robert Lemos

Robert Lemos

Robert Lemos is an award-winning freelance journalist who has covered information security, cybercrime and technology's impact on society for almost two decades. A former research engineer, he's...