The Bigger They Come, the Harder They Fall — On the Little Guy

Posted on November 27th, 2014 by Dan Rampe

NAFCU

The Impact of Major and Local Breaches on Two Nevada Credit Unions

Former Speaker of the House, the late Tip O’Neill, famously said “All politics is local.” In a manner of speaking the same can be said of data breaches. JPMorgan Chase, Home Depot, Target, Neiman Marcus and other high-profile breaches affected tens or hundreds of millions. However, how a local credit union handles the fallout from a major or local breach is what’s really important to that institution’s customers.

Using research provided by the National Association of Federal Credit Union’s “October Economic and CU Monitor” and interviews with executives at two Nevada credit unions, Chris Sieroty on reviewjournal.com offers an overview of how two local credit unions deal with breaches. The following has been excerpted from Sieroty’s piece and edited to fit our format. You may find the complete, unedited article by clicking on this link.

More than 20 percent of plastic exposed

[A] majority of credit unions say local data breaches have affected their operations according to a survey by the National Association of Federal Credit Union’s October Economic and CU Monitor. [And] large national retailer breaches, such as those that occurred at Target and Home Depot, have exposed 20.6 percent of member payment cards, on average. The NAFCU estimates the Target breach cost credit unions nearly $30 million.

Small breaches cause big pain

“Small, local breaches may not garner the same headlines, but they can be just as damaging for smaller financial institutions like credit unions,” the six-page report says. “A wide majority of respondents (84.4 percent) were impacted by a local data breach during the last two years.” [And]

…most credit unions expect to spend more on data breach costs in 2015 than they did this year.

A CU CEO speaks out

“The impact of the recent card breaches has been significant,” said Wayne Tew, president and CEO of Clark County Credit Union. “Since the two most recent breaches, we have been re-issuing cards with changed expiration dates and CVV codes.”

Tew said Clark County Credit Union continues to receive daily alerts with small numbers of cards that have been breached. Clark County Credit Union operates five branches in Southern Nevada with 33,000 members and about $500 million in assets.

“To avoid any legal implications, I will refer to the breaches as coming from Party A and Party B without stating which is which,” Tew said. “To date, we have re-issued 2,440 cards due to the breach at Party A and 3,670 due to the breach at Party B.”

Losses to fraud

Direct fraud losses for Clark County Credit Union from Party A breaches so far total $22,123.76 and $830 from Party B, with more coming in.

Business as usual?

“Unfortunately, the losses are becoming a regular part of doing business,” Tew said. “Safeguards we put in place are to re-issue the cards as soon as we receive notice of possible compromise of the card.”

Another CU CEO speaks out

Brad Beal, president and CEO of One Nevada Credit Union, said in both the Target and Home Depot breaches the credit union has had to reissue debit and credit cards.

“We try to time the re-issues in such a manner as to minimize inconvenience for our members,” Beal said. “Sadly, we (have) some members who have had their cards reissued for both breaches, which multiplies the inconvenience for them.”

75,500 members could be at risk

Based in Las Vegas, One Nevada Credit Union has $800 million in assets, 75,500 members and 15 branches in Clark, Washoe and Nye counties.

“From the credit union’s viewpoint, we first must assess the magnitude of the breach, our potential loss exposure, and the cost of potentially reissuing cards,” Beal said. “These assessments require the attention of a number of our management personnel, and must be performed rather quickly.”

Monitoring transaction activity

“As to the credit union, we monitor consumer transactions carefully, watching for transactions that are inconsistent with each cardholder’s usual activity,” Beal said. “The cardholder is then promptly contacted to verify the legitimacy of any transaction that seems out of the ordinary.”

Beal said by closely monitoring consumer transactions, One Nevada Credit Union can “usually detect breaches before the merchant announces them.”

When asked if data breaches were becoming a cost of doing business, Beal said, “Absolutely not.” He said the credit union is opposed to simply accepting breaches as part of their normal business.

Strengthen data security at point of card use

“Ultimately, consumers end up paying for breaches,” Beal said. “Strengthened data security at the point of card use would go a long way to reducing these breaches, strengthening the security and reliability of our nation’s automated payment systems, and eliminating consumer inconvenience and frustration.”

Need federal standards

Beal said federal standards for merchant data security should be adopted. Tew also called for strengthening data security.

Retailers should be held responsible for losses

“The greatest safeguard would be for the retailers to have some responsibility to cover the losses incurred by the financial institutions,” Tew said. “If they would put in place the same required security systems financial institutions do, the breaches would diminish.”

Tew said retailers are proud to boast that their customers will not suffer any loss, often implying that they, the retailers, are eating the cost.

“I consider that to be deceptive business practice,” Tew said, “What retailers do not reveal is that they don’t suffer any hard losses because the costs are borne by the card issuing credit unions and banks.”

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

 

 

 

 

What Would Holiday Shopping Be without Cybercrime? Retailers Are Trying to Find Out.

Posted on November 26th, 2014 by Dan Rampe

Holiday Shopping

PwC Survey of 758 American Companies Says $4.1 Billion Being Spent This Year to Stop Hackers

To date this year, there have been 679 major data breaches, a 25 percent increase over the same time frame a year ago, which is more than enough reason for companies to increase their investments in cybersecurity. As a matter of fact, at the current rate, the PricewaterhouseCoopers survey says spending on security could increase by another $2 billion by 2017.

In her article on detroitnews.com, Lauren Abdel-Razzaq has interviewed a number of experts to examine where and how security dollars are being spent. The following has been excerpted from her piece and edited to fit our format. You may find the complete article by clicking on this link.

Newest trends for keeping a step ahead of cybercrime

Karl Volkman, chief technology officer at [IT services company, SRV Network Inc. says] “bringing on security consultants, expanding cybersecurity staffing, and researching the newest trends to stay ahead of cybercriminals.”

More spent on cybersecurity than employee benefits or marketing

“As hackers become more advanced, global institutions will have no choice but to keep up,” says Volkman. “Dollars spent on cybersecurity could eclipse dollars spent on marketing or employee benefits. Nothing is out of the realm of possibility at this point.”

Security and customer loyalty go hand-in-hand

[Craig Peasley, head of product marketing for eBay Enterprise notes,] “Retailers need to make security and privacy of utmost importance. And if they do, they can leverage this data to provide a better customer experience that ultimately increases loyalty.”

Results of eBay Enterprise survey

Of the companies eBay Enterprise surveyed, 65 percent of larger retailers said they had heightened concerns about data security, and 77 percent said they have not experienced a security breach.

Considering last year’s $148M breach, how is Target coping?

[Target CEO Brian Cornell] said the company has bolstered its IT and compliance staffs and invested in new technology to better protect data. However…Target will not begin accepting EMV cards…until early next year. The retailer also is beefing up security on Target debit cards; the rollout for that is also planned for early next year.

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

 

 

 

 

 

 

UK Millennials Ready to “Pay Their Dues” Via Mobile

Posted on November 25th, 2014 by Dan Rampe

Millennials

New Report Says Prime-Demographic Millennials Are Much More Positive about Mobile Payments than Any Other Age Group

JWT Intelligence, which conducts research and analysis of emerging trends, found that millennials in the UK are most receptive to making payments using a mobile device.

In a story on the JWT Intelligence study that ran on thepaypers.com (link to article), the research organization discovered that UK internet users 18 to 34 had a much more positive attitude toward mobile payments than any other age group. Just about half (48 percent) said they would use their mobile phones for small transactions. That number is well above the 29 percent average across all age groups.

From time immemorial (okay maybe only since marketing people kept track of these things), 18 to 34 have been virtually iconic numbers. Except for people pushing cemetery plots at one end and Teenage Mutant Ninja Turtles at the other, success is generally measured in who best reaches that market segment. Therefore, finding out millennials are the most avid supporters of mobile payments is great news for the mobile payment industry and marketers who take advantage of the technology.

Other things learned from the study about millennial habits is that 24 percent said they had used a mobile app, while 10 percent said they had used their mobile phone in a “tap to pay” scenario. The over thirty-fives “scored” just 5 percent in those same categories.

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

 

 

 

Black Friday, Sofa Sunday and Cyber Monday Will Be Red-Letter Days for Cybercrime

Posted on November 24th, 2014 by Dan Rampe

Black Friday and Cyber Monday

ThreatMetrix Predicts Mobile Transactions and Account Takeovers Will Turn Holiday Shopping into “the Nightmare before Christmas,” Chanukah and Kwanza

This year is expected to be one of the hottest shopping seasons on record. In fact, the National Retail Federation expects a 4.1 increase in sales. Translated into hard cash, that’s roughly $616.9 billion — more than enough incentive for cybercriminals to go all out looking soft spots to attack on e-commerce sites.

Cybercrime migrating from POS to online

And, with the adoption of in-store technologies like EMV and Apple pay making it harder for criminals to make a living doing point-of-sale fraud, e-commerce businesses can anticipate many of those criminals to shift their expertise into online crime.

To help e-commerce businesses protect themselves and their customers before the holiday shopping season goes into full swing, ThreatMetrix offers these predictions, observations and suggestions:

Transactions at the table: Increase in mobile shopping starts before the turkey’s done

Last week, the “ThreatMetrix Cybercrime Report: Q4 2014” found that mobile represents nearly one-third of all activity on The ThreatMetrix® Global Trust Intelligence Network (The Network). Combine that with the fact that Adobe has predicted the season’s lowest prices will pop up on Thanksgiving Day and consumers can expect to see a lot of mobile shopping taking place during their Thanksgiving feasts, spilling over into “Sofa Sunday.”

This poses a huge opportunity for fraudsters because mobile users are more likely to store credit card data with retailers, a prime target for account takeover attacks. Another challenge is that retailers are more likely to reduce risk thresholds for mobile devices to avoid false positives.

Alisdair Faulkner observes

“Cybercriminals follow the flow of money, and this Thanksgiving, a very high number of transactions will take place through mobile channels,” said Alisdair Faulkner, chief products officer, ThreatMetrix. “Unfortunately, it can be difficult for retailers to use IP geo-location data to ensure mobile transactions are authentic. Instead, retailers should try to leverage trust intelligence networks to recognize customers with good mobile purchasing history, and complement with finer grained authentication intelligence available within a native mobile application. Retailers should also ensure that their mobile applications have not been injected by malware.”

The lump of coal in the stocking: Account takeover in the wake of high profile data breaches

Over the past year, there’ve been countless numbers of data breaches with hundreds of millions of user accounts compromised: 40 million in the Target breach, 60 million in the Home Depot breach, a whopping 1.2 billion passwords stolen by a Russian cybercrime ring. Stolen identities as a result of these and other breaches will play a major role in helping cybercriminal account takeovers this holiday season.

Retailers have to ensure that in real time they have a system in place to differentiate between trusted customers and cybercriminals. The system should be able to identify suspicious login patterns, risky or compromised devices and devices disguising their geo-location. Additionally, these systems shouldn’t add friction to the user experience or trap trusted customers in a fraud net.

Faulkner notes

“Unfortunately, many consumers use the same login credentials across multiple websites, which means that when those credentials fall into the hands of cybercriminals through data breaches or malware, all of their accounts and likely all of their credit cards will be compromised,” said Faulkner. “This sadly means that cybercriminals this year could end up having the merriest holiday season of all.”

In 2013, ThreatMetrix screened one-quarter of all Black Friday transactions in the U.S.

Last year using The Network, its global data repository, ThreatMetrix screened one in four of all U.S. e-commerce transactions on Black Friday to help retailers protect their customers from cyberfraud. The Network analyzes more than 850 million monthly transactions, and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites. It is the most comprehensive data repository of its kind, using its real-time analytics to evaluate logins, payments, new account registrations, remote access attempts and other transactions for validity.

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

 

Unconventional Wisdom on EMV

Posted on November 24th, 2014 by Dan Rampe

EMV

Two Javelin Analysts Argue EMV Will Not Shift Cybercriminals’ M.O.s From P.O.S. to Online

Everybody knows that when EMV becomes the American standard next October, beaten cybercriminals will drop Point of Sale theft like a hot rock and take to the hills or try their collective hands at online fraud and thievery. P.O.S. crime goes down, online crime goes up. Everybody knows that, right? Wrong.

Two Javelin Strategy & Research analysts, Nick Holland, retail payments practice lead and Al Pascual, fraud and security practice lead just don’t buy into the conventional wisdom. In his piece on digitaltransactions.net, John Stewart explains the analysts’ reasons for bucking convention. The following has been excerpted from his piece and edited to fit our format. You may find the complete, unedited article by clicking on this link.

Sticking a pin in the balloon

“The balloon-squeezing mythology [squeeze a balloon at one end and it expands at the other] needed to be revisited with a fresh set of eyes. Does this idea that EMV forces fraud to other areas still hold water? We had our doubts.”

They’re heeere (Think the classic line from Poltergeist)

The “missing” factor, argue[d] Holland and Pascual…is the explosive growth of e-commerce. In other words, rapidly rising volume in this channel has already attracted plenty of fraudsters in recent years, a trend that will only continue with or without EMV in physical stores. “They’re already there,” [said] Holland. “They already leapt online years ago.”

Half of all transaction fraud online

To buttress their point, Holland and Pascual point to current e-commerce fraud statistics. In the United States, online traffic accounts for just 8.5% of all electronic-transaction volume, yet nearly half of all transaction fraud occurs online.

Multitasking

Fraudsters, in their nefarious way, tend to be multitaskers, attacking all forms of payments in all channels opportunistically. EMV has proven itself effective in other countries against counterfeit-card fraud at the point of sale. But to Holland and Pascual, the idea that criminals confine themselves to just that form of fraud, and then move on to card-not-present crime only when frustrated by EMV, is naïve.

e-Commerce fraud soaring

[e-Commerce] fraud in the United States is due to soar, even if the move to EMV will have little to do with it. If volume drives fraud, and if, as predicted by Javelin, online volume grows to more than 10% of all e-payments within three years, then card-not-present fraud can only grow much worse. “Card-not-present fraud is already very big and will get bigger,” warns Holland.

Same-day delivery delivers fraud

Exacerbating this problem, he says, is the nascent trend toward same-day or even faster delivery. While this trend promises greater convenience for consumers, it opens new opportunities for fraudsters with stolen payment credentials, Holland warns.

“Increasingly, you’ve got this situation where you’re shopping locally but accessing inventory globally,” he notes. “[There’re] clearly avenues of fraud there, particularly when you’re getting the goods within hours. Certainly, the time between instigating payment and the delivery of the goods is short and rapidly truncating. The fraud-mitigation response needs to be tailored to that.”

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

 

 

MasterCard and Visa to Drop Pop-up Window Passwords

Posted on November 21st, 2014 by Dan Rampe

MC and Visa

Taking a Page from the ThreatMetrix Playbook, the Credit Card Giants Are Moving to Non-Intrusive, Effective Authentication Systems

More than a year ago, ThreatMetrix was warning that the day of the password had passed (See the ThreatMetrix news release titled “2013: The Year of the Password Apocalypse” ) and advised:

  • Integrating Login and Payment Screening for a single view of the customer whether he/she does a guest checkout on a friend’s iPad or uses a registered credit card on a mobile device.
  • Leveraging Shared Intelligence Networks to passively recognize both valuable customers and cyberthreats based on anonymized shared intelligence of device and persona reputation and behavior.
  • Implementing Trust Tags to associate user accounts and devices with additional context by tagging to see, for example, if a registered user’s email and password was compromised on another sit

Now MasterCard and Visa are transitioning out of their present systems, MasterCard SecureCode and Verified by Visa, which are based on the 3D protocol. Under the 3D protocol, a user had to enter a password in a pop-up window so the card issuer could confirm the user’s identity before the transaction was completed.

In her piece on independent.ie, Sophie Curtis points out that systems using the 3D protocol are “unpopular with online shoppers, because [shoppers are required] to use complex passwords that are easy to forget, and can be difficult to tell whether the pop-ups are legitimate or fraudulent [in other words whether somebody is attempting to capture the shopper’s password].”

Curtis goes on to discuss the new systems Visa and MasterCard are introducing. The following has been excerpted from her piece and edited to fit our format. You may find the full article by clicking on this link.

Invisible authentication

A new invisible authentication [reduces] the reliance on passwords as a means of verifying identity.

In the event that authentication is needed, cardholders will be able to identify themselves with the likes of one-time passwords or fingerprint biometrics, rather than committing static passwords to memory.

Facial and voice recognition apps

MasterCard is also piloting commercial tests for facial and voice recognition apps to authenticate cardholders, and conducting trials of a wristband which authenticates a cardholder through their unique cardiac rhythm.

“All of us want a payment experience that is safe as well as simple, not one or the other,” said Ajay Bhalla, president of enterprise security solutions at MasterCard.

“We want to identify people for who they are, not what they remember. We have too many passwords to remember and this creates extra problems for consumers and businesses.”

Adoption expected in 2015

The new protocol could be adopted in 2015 and will gradually replace the current 3D Secure protocol.

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

 

 

ThreatMetrix Cybercrime Report: Q4 2014 Examines Cyberattacks Detected by “The Network”

Posted on November 20th, 2014 by Dan Rampe

Standard-Header-AF

Report Marks Trends Leading up to Holiday Shopping and Identifies Top Concerns such as Account Takeover and Customer Friction

Hot off the presses, or more accurately, straight out of cyberspace, comes the “ThreatMetrix Cybercrime Report: Q4 2014” detailing Q3 cyberattacks discovered by the ThreatMetrix Global Trust Intelligence Network (The Network) which analyzes more than 850 million monthly transactions, and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

Now leveraging real-time, anonymized data from The Network across industries, the Report, having samples from close to a billion transactions offers a representative summary of activity that includes account creation, payment and login fraud.

E-commerce holiday season shopping threats

With emphasis on the e-commerce industry and based on current attack trends, card-not-present, account takeover and fraudulent account registration attacks were in no small way associated with countless high profile data breaches in the past year. This trend will likely accelerate during the upcoming $600 billion holiday shopping season.

While many reports discuss cyberthreat trends such as malware, massive data breaches or the total economic impact of cybercrime, the ThreatMetrix Cybercrime Report: Q4 2014 is the first of its kind to analyze how often stolen and compromised identities are used in the commission of additional cybercrimes.

Alisdair Faulkner, chief products officer, ThreatMetrix

“In addition to payment fraud this holiday shopping season, our biggest concern is the spike in the number of account takeovers we are seeing on retail websites. ThreatMetrix data shows an upswing in account takeover activity in the wake of recent massive data breaches – and most retailers will be caught unprepared.

“Previously, guest checkouts represented the highest risk, but due to the prevalence of data breaches and the convenience of storing credit cards to make mobile purchases easier, fraudsters have found it just as easy to use a stolen username and password as it is to use compromised credit card information that has a shorter life span before being shut down. Even strong PCI compliance and encryption means little when cybercriminals utilize stolen password and email combinations to compromise customer accounts. Retailers need to leverage a shared global network of trust intelligence to differentiate between trusted and suspicious transactions.”

e-Commerce high-risk transactions

In comparison to other industries, e-commerce falls in the middle when it comes to high-risk transactions with 4 percent of all transactions labeled as high-risk. Overall, high-risk transactions and logins are typically rejected outright by ThreatMetrix customers.

e-Commerce transactions by percentage and risk:

  • 7 percent account creation, with 5.2 percent high risk
  • 14 percent account login, with 5.5 percent high risk
  • 79 percent payment, with 3.4 percent high risk

Financial Services Industry Cybercrime and Customer Friction

The Report examines financial services transactions and authentication attempts. While only 1 percent of transactions and logins are labeled as high-risk, financial services tolerate a higher threshold of risk at point of login and instead intercept attempted money transfers or rely on intrusive step-up authentication solutions to provide extra assurances.

Financial services transactions by percentage and risk:

  • 2 percent account creation, with 1.7 percent high risk
  • 83 percent account login, with 0.7 percent high risk
  • 15 percent payment, with 0.5 percent high risk

Faulkner notes

“Attacks aimed at financial services are more targeted and result in much higher losses and possible brand damage than e-commerce ‘spray-and-pay’ attacks – meaning randomly targeting as many victims as possible.

“Financial services businesses are dominated by higher authentication requirements, making it more difficult for fraudsters to attack. As a result, attacks leveraging malware are much more common and the challenge for most financial institutions has shifted from the detection of anomalous account access to stopping valid customers from being caught in the fraud net.”

EMV and Apple Pay move threat online

While EMV, Apple et al. will cut down on point-of-sale fraud such as that caused by recent data breaches, more secure in-store payments will increasingly push fraud online and e-commerce and financial services executives must be prepared to protect against such risks.

Media industry faces highest percentage of high-risk transactions

Consisting of social media, content streaming and online dating websites, the media industry is subject to 9 percent of high-risk transactions, the highest percentage of all industries examined.

Media transaction by percentage and risk:

  • 6 percent account creation, with 4.6 percent high risk
  • 66 percent account login, with 6.2 percent high risk
  • 28 percent payment, with 3.7 percent high risk

Adds Faulkner

“The media industry has the highest incidence rate of high-risk transactions due to the low authentication threshold – often only consisting of a username and password combination. Such identities can easily be compromised due to using the same login credentials across websites and a significant number of data breaches exposing these login combinations.”

Mobile represents one-quarter of all activity in The Network

For the Report, total mobile activity was also examined for the prevalence and breakdown of cyberthreats. According to ThreatMetrix data, mobile represents nearly one-third of all activity on The Network. However, while cybercriminals target mobile, this channel still has much lower risk rates than desktop.

“As iPhone, Android and tablet usage continues to increase among consumers, mobile will represent an equal opportunity channel for cybercrime activity,” said Faulkner. “Cybercriminals always go where the money is and as more transactions turn to mobile, they will create new, sophisticated strategies to target this channel.”

Android versus iOS as targets

The report found that while Android represents a much higher percentage in terms of market and browser share, iOS (iPhone and iPad) generates nearly twice the number of payments, logins and authentications of all mobile operating systems combined. Specifically, 64 percent of mobile transactions are either iPhone or iPad transactions. Additionally, 48 percent of mobile attacks target iOS devices.

Top attacks by transaction type

Leveraging activity across industries for both mobile and desktop, the Report identified top attacks by transaction type and found spoofing (IP address, geolocation, identity and device spoofing) is the most common type of attack across payments, account login and account creation.

Cybercrime in all its guises

As a whole, cybercrime is a multi-billion dollar industry, which consists of organized cybercrime, nation states and many types of hackers. Given the widespread prevalence of cybercrime and no signs of its slowing down, businesses need to place an emphasis on understanding the types of attacks that occur once identities are compromised. In addition, no business – no matter the industry or size – can afford to stand alone in the fight against cybercrime. Rather, businesses must leverage a global network of trust intelligence to assure they have the best resources available to differentiate between authentic and fraudulent transactions without disrupting the customer experience with added friction.

To learn more, download the “ThreatMetrix Cybercrime Report: Q4 2014” eBook: http://goo.gl/6wUWrV

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

 

 

 

 

What Good Can Come from a Data Breach? Experience.

Posted on November 13th, 2014 by Dan Rampe

Data Breach

An Expert Reporter Interviewed Security Experts to Come Up with 6 Lessons Learned from Past Data Breaches That Could Help Stop Future Ones

Einstein said “The only source of knowledge is experience.” While Oscar Wilde observed that “Experience is simply the name we give our mistakes.”

When it comes to data breaches, both Einstein and Wilde are right on target (The reference to Target in this instance was purely coincidental…maybe) . Anyway, without mistakes, there wouldn’t be breaches. But from those breaches comes the experience to avoid mistakes in the future.

In her piece on csoonline.com, Maria Korolov, a veteran tech reporter, interviewed a number of security professionals to pass along what they learned from studying the score of high-profile breaches that retailers, banks, consumers, government agencies et al. have suffered. The following has been excerpted from her piece and edited to fit our format. You may find the full article by clicking on this link.

Six lessons

1. It’s time to take staffing seriously

The biggest security hole in information security might not be technical at all.

“Roughly 40 percent of security roles are vacant in 2014,” said Jacob West, CTO of Hewlett Packard’s Enterprise Security Products. “And when you look at senior security roles, that vacancy rate is nearly 49 percent. No matter what technology we use, no matter how we try to secure our systems, if we’re going into this war with almost half of our army unstaffed, we’re going to see our adversaries be successful.”

West was referring to a study published this spring by the Ponemon Institute and sponsored by HP, which also showed that 70 percent of respondents said that their security organizations were understaffed. The chief reason? According to 43 percent of respondents, the organizations weren’t offering competitive salaries.

Companies might want to reconsider their security staffing budgets in the wake of another Ponemon study, sponsored by IBM and published in May, which showed that the average total cost of a data breach increased 15 percent to $3.5 million, and the average cost paid for each lost or stolen record containing sensitive and confidential information increased more than 9 percent from $136 in 2013 to $145 in this year’s study.

2. Know your code

Over the past 10 years, many organizations have adopted software security best practices, building in security at a fundamental level. However, that only applies to code they write themselves.

“One of the big points that was really brought to light this year …is that enterprises don’t write the majority of software themselves,” said HP’s West. “Software is in fact composed rather than written. We take commercial components and open source components and build a little bit of proprietary on top of that.”

As a result, some organizations spent weeks – even months – trying to inventory their systems and figure out where they’d used the vulnerable version of SSL.

Organizations need to start with a thorough understanding of what applications they’re using, where and how they’re using them, and their relative importance. Automated scanning systems might help with some of this, but at the end of the day, “the rubber has to hit the road,” West said. “It takes human effort.”

3. Pen tests are lies

Penetration tests are a common part of security audits. In fact, they’re required under the Payment Card Industry Data Security Standard.

“Every single company that’s been breached has had a penetration test report that says that people can’t get in – or if they can get it, it’s not important,” said J.J. Thompson, CEO of Rook Security, a penetration testing company in Indianapolis.

So why aren’t penetration tests exposing potential security holes so that companies can fix them?

“It’s very simple,” said Thompson. “Penetration test reports are generally lies.”

Or, to be less blunt, penetration testers are more constrained in what they can and cannot do, compared to actual hackers. “You can’t impersonate someone because that’s not how we do things here,” Thompson said. “You can’t set up a phishing site associated with a Facebook profile because that’s going too far.”

Actual hackers – who are already breaking the law anyway, by hacking into a company – might not be averse to breaking other laws, as well. A white hat security firm might be less willing to, say, get into a company by going after the systems of its customers or vendors. Or impersonate government officials, or damage equipment, or hijack actual social media accounts owned by friends or family members of company employees.

4. Physical security, meet cybersecurity

Agents of a foreign group recently went after an organization on the East Coast, circumventing firewalls, extracting data on its leadership, and getting information about upcoming events – and the facilities where those events would be taking place.

“Authorities believed it was part of the pre-operational planning of the group,” said John Cohen, who until recently was the anti-terrorism coordinator and acting undersecretary for intelligence and analysis at the Department of Homeland Security.

“There’s a blending together of physical security and cybersecurity,” said Cohen, who is now the chief strategy adviser at Frisco, Texas-based security vendor Encryptics LLC.

It can go the other way, too, with a physical break-in opening the way to digital theft via compromised equipment.

Enterprise security must become more holistic. The thieves who broke into a field office could have been looking for easy-to-fence electronics, or they could have been planting keyloggers.

5. Plan for failure, Part 1

If you knew with certainly that hackers were going to get into your systems, what would you do differently? After this year’s high-profile breaches, a lot of people are asking themselves that question, and starting to look at security differently.

“The way that I look at it, and the people I talk to on a day to day basis look at it, there’s a switch in mentality,” said Scott Barlow, the chair of the CompTIA’s IT Security Community and vice president of product management at Boston’s Reflexion Networks, Inc. “Businesses are assuming that their data will be exposed, or is already exposed, and they’re taking steps.” Those steps include encrypting data on employee desktops, in file servers, even email.

And a process called tokenization replaces bank card numbers with randomly generated codes, or tokens, even before they leave point of sale devices. Only the payment processor knows the real numbers – the retailers get tokens, which are completely worthless to any hackers who break into their systems.

That turns the payment processors into targets – but then, they always have been.

“Guys are already going after us,” said Paul Kleinschnitz, senior vice president and general manager of Cyber-security Solutions for FirstData, which accounts for about 40 percent of the payment processing in the U.S.

Meanwhile, the Targets and the Home Depots will be insulated from the risk of losing the payment data.

“We are pulling that burden away form the merchants and managing it,” Kleinschnitz said.

6. Plan for failure, Part 2

If JP Morgan can be breached, every company is vulnerable. “Even if you have the best security in place, there’s still a chance that you may be breached,” said Peter Toren, an attorney specializing in computer crimes at Washington D.C. law firm Weisbrod Matteis & Copley. Toren was also a federal prosecutor for eight years, in the Justice Department’s computer crimes division.

How a company reacts to that breach can make a big difference.

Both Target’s CEO and CIO lost their jobs this spring as a result of the problems the company had in dealing with the consequences of its $40 million payment card accounts breach late last year.

“It came out in drips,” said Toren. “It was the death of a thousand cuts.”

Companies need to be prepared to deal with a breach transparently and promptly – and preparations have to start long before a breach ever happens.

“They need to have a plan in place and work with a public relations firm beforehand,” he said. “Not just bring one in after the horse is out of the barn.”

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

The IRS Might Just Have Your Number…

Posted on November 7th, 2014 by Dan Rampe

IRS

…But Won’t Give It to You. Internal Revenue Service Not Providing PINs to All Taxpayers Who’ve Been ID Theft Victims.

The Treasury Inspector General for Tax Administration (TIGTA) issued a report saying the IRS is not providing personal identity numbers to all eligible taxpayers who have been victims of tax-related identity theft.

First issued in 2011, the Identity Protection Personal Identification Numbers (IP PINs) allowed the IRS to quickly process returns to prevent the misuse of taxpayers’ Social Security Numbers on fraudulent tax returns. While the program has been expanded, the IRS has still not provided enough PINs to meet the demand. In his article on accountingtoday.com, Michael Cohn reports on the TIGTA report and details how and whether the IRS will make changes to ensure all taxpayers are covered. The following has been excerpted from Cohn’s piece and edited to fit our format. You may find his complete article by clicking on this link.

Hundreds of thousands of taxpayers out of luck

[The] IRS did not provide an IP PIN to 532,637 taxpayers who had an identity theft indicator on their tax account indicating that the IRS resolved their case. The IRS also did not provide an IP PIN to 24,628 taxpayers who were potential victims because their personally identifiable information had been lost, breached or stolen by or from the IRS. In addition, IRS programming errors resulted in 32,274 taxpayers not receiving an IP PIN on a timely basis and the issuance of 13,220 IP PIN notices to deceased taxpayers.

How’s this supposed to work?

TIGTA also found that the IP PIN notices issued to 759,446 taxpayers for processing year 2013 did not provide taxpayers adequate instructions on the use of the number and its importance on a tax return.

The program continues to expand

TIGTA found that the IRS issued 1.2 million IP PINs to taxpayers to use in filing tax returns in 2014, up from 770,000 in 2013. In addition, taxpayers who used their IP PIN to file their tax returns claiming a refund in processing year 2013 had their returns processed in a time frame similar to the general population of return filers claiming a refund.

TIGTA recommendations

[TIGTA recommended that the] IRS should…revise its IP PIN issuance criteria to make eligible those taxpayers who have had their Personally Identifiable Information lost, breached, disclosed, or stolen and have authenticated themselves…. The report also recommended that the IRS ensure that the finalized IP PIN criteria are provided to the Applications Development function before each filing season; ensure that IP PIN criteria are accurately programmed; and revise the IP PIN issuance notice to explain the effect on processing a recipient’s tax return and refund when the number is not included on the filed tax return.

Are concerns adequately addressed?

The IRS indicated that individuals whose personally identifiable information was compromised are eligible to receive an IP PIN. However, the IRS’s Web site for its online IP PIN application still has not been updated to inform these individuals of this option….

Less than one percent victimized a second time

“The use of the IP PIN by taxpayers has been a major success, and as is noted in the audit report, protects taxpayers from being victims of identity theft while allowing their tax return to be processed in a time period similar to returns submitted without an IP PIN,” wrote Debra Holland, commissioner of the IRS’s Wage and Investment Division, in response to the report. “Our records indicate that less than one percent of taxpayers issued an IP PIN are a victim of identity theft again.”

Strict parameters for issuing PINs

The pin number is part of a larger strategic effort by the IRS to combat identity theft impacting the tax administration. [The IRS applies] a strict set of parameters to accounts that are determined eligible for a pin number, resulting in an extremely low recurrence of identity theft. For the 2013 filing season, [the IRS] enhanced…programming to increase efficiency and expanded the pin program to more than 770,000 taxpayers. For the 2014 filing season, [it] issued over 1.2 million pin numbers.

Why 530,000 taxpayers were not “PINned”

[The IRS said the] 530,000 taxpayers [who] did not receive IP PINS… were taxpayers identified by the IRS as having potentially suspicious activity on their accounts, rather than taxpayers [who] self-reported to the IRS….The IRS recognized these accounts as possibly being victimized and notified the taxpayers of [its] concerns.

However, [the agency] set very strict parameters to…accounts before an IP PIN [could be] issued in order to protect the integrity of the system. In this coming year, taxpayers identified by the IRS as having possible suspicious activity on their accounts will receive a letter inviting them to take part in [the] IP PIN program through an e-authentication process on [the IRS] website.

Pilot program notifying taxpayers

Beginning in January 2014, the IRS began a pilot program that allowed some taxpayers to voluntarily receive a pin number via an online application. Next year, [the agency plans] on mailing notices to let taxpayers know that they may be eligible for a pin number.

The IRS also pointed to the impact of budget cuts on its ability to help taxpayers with these problems….Since 2010, the IRS budget has been reduced nearly $850 million. At the same time, [the IRS has] 13,000 fewer employees today than [it] did in 2010.

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.

 

 

 

 

Speakers in Place for Sold-Out ThreatMetrix Cybercrime Prevention Summit 2014

Posted on November 6th, 2014 by Dan Rampe

Summit-Header

With Theme of “Building Trust on the Internet,” ThreatMetrix Kicks Off Fourth Annual Summit of Industry Leaders

The largest event of its kind with more than 250 cybersecurity experts from around the world, ThreatMetrix’s Fourth Annual Cybercrime Prevention Summit 2014 currently runs through November 7th at La Quinta Resort and Club in Palm Springs, California.

Building Trust

To meet this ever-growing threat, the Summit will focus on building trust on the Internet for businesses and consumers through a collective, network approach to cybersecurity. ThreatMetrix’s Global Trust Intelligence Network, the world’s largest trusted identity network, enables such an approach by sharing anonymized threat intelligence from 850 million monthly transactions across more than 3,000 customers.

Bert Rankin, ThreatMetrix CMO

“This year’s summit comes on the heels of October’s National Cyber Security Awareness Month, which focused on increasing online safety through the shared responsibility of businesses, government entities and consumers,” said Bert Rankin, chief marketing officer, ThreatMetrix. “No business can stand alone in the fight against cybercriminals and global shared intelligence is a necessity to combat today’s sophisticated fraudsters. The summit comes at an ideal time for experts and peers to come together and discuss best practices for a collective approach cybersecurity. We’ve gathered some of the industry’s brightest minds for this event and can’t wait to get the conversation started.”

Prominent speakers. Top companies.

Speakers include the best and brightest cybersecurity minds from around the globe:

  • Matthew Durdel, risk manager, Walmart.com payments and risk, manager, Walmart
  • Byron Acohido, Pulitzer Prize-winning journalist and editor-in-chief, ThirdCertainty
  • Julie Conroy, research director, Aite Group
  • Scott Boding, senior director of fraud solutions product management, CyberSource
  • Garrett Goff, manager of global payments analytics and fraud, Netflix, Inc.
  • Michael Braatz, senior vice president of payments risk management, ACI Worldwide
  • Mark Nelsen, vice president risk products and business intelligence, Visa
  • Kelly White, vice president and information security manager, Zions Bancorporation
  • Shiva Nathan, director of platform and services, Intuit
  • John Green, director of fraud, eBay
  • Reed Taussig, CEO, ThreatMetrix
  • Alisdair Faulkner, chief products officer, ThreatMetrix
  • Andreas Baumhof, chief technology officer, ThreatMetrix

Meet professionals. Share experiences.

The conference puts together these and other industry experts, technologists and fraud prevention and cybersecurity professionals across a wide range of verticals providing attendees the opportunity to make direct, meaningful connections through various activities, ranging from speaking sessions to golfing and hiking activities.

Bert Rankin adds

“The cybersecurity landscape is changing rapidly, and businesses need to consider a new, strategic approach to keep themselves and their customers safe,” said Rankin. “Summit attendees will hear new strategies from innovative speakers and have the opportunity to discuss their own ideas in a relaxed setting. We are confident all attendees will return with a fresh perspective on how to combat evolving cybercrime threats.”

Panels of experts discuss topics that include:

  • What’s Next: Staying Ahead of Cybercrime
  • Building Alliances to Make Cybersecurity a Shared Responsibility
  • Advancing Consumer Authentication
  • The Quest to be One Step Ahead: Emerging Options for Authentication
  • Fraud Fighting Techniques from the World’s Largest Retailer
  • Layered Security and the Evolving Account Takeover Threat
  • Preventing and Detecting Fraud in a Massive Global Marketplace
  • Information Security as Counterinsurgency

To learn more, please visit http://www.cybercrimepreventionsummit.com/.

ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real-time identity and access analytics that leverage the world’s largest trusted identity network.

ThreatMetrix secures enterprise applications against account takeover, payment fraud, fraudulent account registrations, malware, and data breaches. Underpinning the solution is the ThreatMetrix® Global Trust Intelligence Network, which analyzes over 850 million monthly transactions and protects more than 210 million active user accounts across 3,000 customers and 15,000 websites.

The ThreatMetrix solution is deployed across a variety of industries, including financial services, enterprise, e-commerce, payments, social networks, government and insurance.

For more information, visit www.threatmetrix.com or call 1-408-200-5755.

Join the cybersecurity conversation by visiting the ThreatMetrix blogFacebookLinkedIn and Twitter pages.