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    TJX: Data Theft Began in 2005; Data Taken from 2003

    By
    Evan Schuman
    -
    February 21, 2007
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      The mountains of data apparently taken from $15 billion retailer TJX were taken a lot earlier than had previously been announced, with the intrusions starting in 2005 and some of the impacted transactions dating back to 2003, TJX said in a statement issued Feb. 21.

      As TJX works its way through various investigations from a group of state attorneys general, congressional inquiries and several class-action lawsuits, details about the timing of the initial data breach (and any subsequent data breaches), how long it had gone on before it was detected and how long consumer information was stored will prove critical.

      Although questions about how the breach happened are important, some of the probes will also explore how this substantial a breach could have gone on for so long.

      The last official statements from TJX said the breach—now being referred to as “an intrusion”—started in May 2006 and that they were not discovered until mid-December 2006.

      The Feb. 21 statement said “TJX now believes its computer system was also intruded upon in July 2005 and on various subsequent dates in 2005. TJX continues to believe there was no compromise of customer data after mid-December 2006.”

      An earlier sentence in the statement said the intrusion took place “from May 2006 to January 2007,” suggesting that the intrusions were allowed to continue from December 2006 through some point in January 2007, potentially to allow law enforcement to try and track a suspect.

      Another crucial area of the probes that was addressed Feb. 21 was the age of the data that was accessed.

      TJX has yet to say how the data was accessed or where it was accessed from, such as from a central point or an offsite backup location. For example, if the data was accessed from backup files that were stored off-site, that might be seen differently.

      The statement also detailed transaction data breaches impacting data much older than May 2006.

      “In addition to the customer data (TJX) previously reported as compromised, (TJX) now believes that information regarding portions of the credit and debit card transactions at its U.S., Puerto Rican and Canadian stores (excluding debit card transactions with cards issued by Canadian banks) from January 2003 through June 2004 was compromised,” the statement said.

      TJX “had previously reported that the 2003 transaction data had potentially been accessed. For most of the transactions from September 2003 through June 2004, some of the card information was masked at the time of the transaction, making that portion unavailable to the intruder. Names and addresses were not included with the credit and debit card data believed compromised.”

      /zimages/3/28571.gifRead more here about the TJX data probe.

      Among the data breaches in this incident that apparently do not involve either credit or debit cards, TJX had reported that drivers license information—used by brick-and-mortar managers to process returns without receipts—had been accessed. The statement from Feb. 21 added that “TJX has found additional drivers license numbers together with related names and addresses that it believes were compromised. This information was associated with unreceipted merchandise returns at its T.J. Maxx, Marshalls and HomeGoods stores in the U.S. and Puerto Rico for the last four months of 2003 and May and June 2004.”

      Mark Rasch, the managing director for technology at FTI Consulting in Washington, D.C. and a former federal prosecutor for high-tech crimes, said the continuing piecemeal disclosures from TJX of deeper and deeper penetrations of older data is potentially making a bad situation much worse.

      “Its one thing to shoot yourself in the foot. Its another thing to reload,” Rasch said. “And its quite another thing to go get another gun.”

      Rasch argued that the original data breach—and the inability to quickly learn of the ongoing breach—was the foot-shooting. The way the investigation was initially handled was the reloading and the Feb. 21 statement that “what we said before wasnt true” is the “getting another gun,” Rasch said.

      “Its not only a matter of what is communicated but how it is communicated. This raises more questions than it answers,” he said.

      Paula Rosenblum, a longtime retail technology analyst who today serves as the VP/Research and Content for the Retail Systems Alert Group, described the latest version of the breach as “frankly stunning in scope.”

      But Rosenblum stressed that the greater concern is what hint this gives as to the state of security readiness of other large—and some not-so-large—retailers.

      “The bigger questions are who else? and when? TJX has a mature IT shop with conservative practices, yet their data has been stolen for years. How many other retailers, who might not be quite as careful, are already being breached?” she asked.

      So many multi-channel retailing systems were put together with baling wire and packing tape, Im sure many have security holes. Also, as retailers move from dial-up or proprietary networks to open networks and wireless connectivity, the risks go up exponentially. This should be a call to action for all retailers to get serious about data security.”

      Chris Noell, the CEO of security consulting firm TruComply, said he still has significant concerns about TJXs current security state.

      In the statement, TJXs president was quoted as saying, “Based on everything we have done, I believe customers should feel safe shopping in our stores.” Noell said he found that statement less than reassuring.

      “This is nice, and Im sure TJX is more secure today than they were before they discovered the breach. But how secure are they? Could they pass a PCI DSS audit right now?” Noell asked. “Until TJX has been validated as compliant by a Qualified Security Assessor, trusting them with credit card data is an act of faith.”

      In other news surrounding the TJX probe, the multi-state probe headed by Massachusetts is proceeding, but the number of participating states is still being described only as “more than 30,” said Emily LaGrassa, communications director for the Massachusetts Attorney Generals office.

      One state that is now among that group is Rhode Island, which had been planning on pursuing an independent investigation, said Michael J. Healey, public information director for Rhode Islands Attorney Generals office.

      Retail Center Editor Evan Schuman can be reached at Evan_Schuman@ziffdavis.com.

      /zimages/3/28571.gifCheck out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.

      Evan Schuman
      Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
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