Target Makes Information Security Changes

Target Corp announced an overhaul of its information security processes and the departure of its chief information officer as the retailer tries to re-gain customers and investors after a massive data breach late last year.

CIO Beth Jacob is the first high-level executive to leave the company following the breach, which led to the theft of about 40 million credit and debit card records and 70 million other records of customer details.

Jacob, who comes from a sales background and has been CIO since 2008, will be replaced by an external hire, according to sources at Target.

“It’s a decision that should have been made by the CEO on January 1, not through the resignation of an employee that overlooked critical weakness in the operating model,” Belus Capital Advisors CEO Brian Sozzi said.

The breach at Target was the second largest at a U.S. retailer, after the theft of more than 90 million credit cards over about 18 months was uncovered in 2007 at TJX Cos Inc, operator of the T.J. Maxx and Marshalls chains.

Hacking has become a major concern for retailers in the United States. In the latest reported breach, beauty products retailer and distributor Sally Beauty Holdings Inc said on Wednesday its network had been hacked but no card or customer data appeared to have been stolen.

Target Chief Executive Gregg Steinhafel said the company would elevate the role of chief information security officer as part of its plan to tighten its security.

The company will also look externally to fill that position as well as the new position of chief compliance officer.

Steinhafel said Target would be advised by security consultant Promontory Financial Group as it evaluates its technology, structure, processes and talent.

“I believe this is definitely a measure in restoring faith and really showing that they are taking the breach seriously,” Heather Bearfield, who runs the cybersecurity practice for accounting firm Marcum LLP, told Reuters.

Target, the third-largest U.S. retailer, said last week customer traffic had started to improve this year after falling significantly toward the end of the holiday shopping season when news of the cyber attack spooked shoppers.

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SEC Plans Cybersecurity Meeting

The Securities and Exchange Commission said that its making plans to conduct a roundtable next month to discuss cybersecurity, after massive retailer breaches refocused the attention of the business community and policymakers on the area.

The SEC said that it would hold the event on March 26 to talk about the challenges cyber threats pose for market participants and public companies.

Recent breaches at Target Corp and Neiman Marcus have sparked concern from lawmakers and revived a long-running spat among retailers and banks over who should bear the cost of consumer losses and technology investments to improve security.

Last Thursday, trade groups for the two industries announced they are forming a partnership to work through the disputes.

U.S. lawmakers have also considered weighing in on how consumers should be notified of data theft. But progress on legislation is not guaranteed in a busy election year.

The SEC in 2011 drafted informal staff-level guidance for public companies to use when considering whether to disclose cyber attacks and their impact on a company’s financial condition.

SEC Chair Mary Jo White last year told Congress that her agency was reviewing whether a more robust disclosure process is needed. But she told reporters last fall she felt the guidance appeared to be working well and that she didn’t see an immediate need to create a rule that mandates public reporting on cyber attacks.

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Adobe Data Found Online

A computer security firm has discovered data it says belongs to some 152 million Adobe Systems Inc user accounts, suggesting that a breach reported a month ago is much larger than Adobe has so far disclosed and is one of the largest on record.

LastPass, a password security firm, said that it has found email addresses, encrypted passwords and password hints stored in clear text from Adobe user accounts on an underground website frequented by cyber criminals.

Adobe said last week that attackers had stolen data on more than 38 million customer accounts, on top of the theft of information on nearly 3 million accounts that it disclosed nearly a month earlier.

The maker of Photoshop and Acrobat software confirmed that LastPass had found records stolen from its data center, but downplayed the significance of the security firm’s findings.

While the new findings from LastPass indicate that the Adobe breach is far bigger than previously known, company spokeswoman Heather Edell said it was not accurate to say 152 million customer accounts had been compromised because the database attacked was a backup system about to be decommissioned.

She said the records include some 25 million records containing invalid email addresses, 18 million with invalid passwords. She added that “a large percentage” of the accounts were fictitious, having been set up for one-time use so that their creators could get free software or other perks.

She also said that the company is continuing to work with law enforcement and outside investigators to determine the cost and scope of the breach, which resulted in the theft of customer data as well as source code to several software titles.

The company has notified some 38 million active Adobe ID users and is now contacting holders of inactive accounts, she said.

Paul Stephens, director of policy and advocacy for the non-profit Privacy Rights Clearinghouse, said information in an inactive database is often useful to criminals.

He said they might use it to engage in “phishing” scams or attempt to figure out passwords using the hints provided for some of the accounts in the database. In some cases, people whose data was exposed might not be aware of it because they have not accessed the out-of-date accounts, he said.

“Potentially it’s the website you’ve forgotten about that poses the greater risk,” he said. “What if somebody set up an account with Adobe ten years ago and forgot about it and they use the same password there that they use on other sites?”

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Are CCTV Cameras Hackable?

When the nosy British bought CCTV cameras, worried citizens were told that they could not be hacked.

Now a US security expert says he has identified ways to remotely attack high-end surveillance cameras used by industrial plants, prisons, banks and the military. Craig Heffner, said he discovered the previously unreported bugs in digital video surveillance equipment from firms including Cisco, D-Link and TRENDnet.

They could use it as a pivot point, an initial foothold, to get into the network and start attacking internal systems. Heffner said that it was a significant threat as somebody could potentially access a camera and view it. Or they could also use it as a pivot point, an initial foothold, to get into the network and start attacking internal systems.

He will show how to exploit these bugs at the Black Hat hacking conference, which starts on July 31 in Las Vegas. Heffner said he has discovered hundreds of thousands of surveillance cameras that can be accessed via the public internet.

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Is Apple Really Security Conscious?

Is Apple proving how clueless it is about security by backing a method of replacing passwords with fingerprint readers?

Just days after a scandal where a South American hospital was staffed by phantom doctors who used silicon fingers of their colleagues to convince administrators’ finger print readers that they were working, Apple has decided that they are the perfect form of security.

Word on the street is that Apple is said to be planning to introduce an iPhone that can be unlocked by the owner’s fingerprint. Speculation about Apple’s plans for fingerprint recognition began last summer when the iPhone maker bought bio-metric security firm AuthenTec for $335 million.

It is believed that the iPhone 5S will have a fingerprint chip under the Home button, to “improve security and usability.” Meanwhile in an engineering journal, two Google security experts outlined plans for an ID ring or smartphone chip that could replace online passwords, which is a lot sexier than fingerprint scanning.

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ID Theft Projected To Cost $21B

A new audit of the Internal Revenue Service (IRS) has discovered that the agency paid refunds to criminals who filed fraudalent tax returns, in some cases on behalf of people who had died, according to the Treasury Inspector General for Tax Administration (TIGTA), which is part of the U.S. Treasury.

The IRS stands to lose as much as US$21 billion in revenue over the next five years due to identity theft, according to TIGTA’s audit, dated July 19 but publicized on Thursday.

TIGTA noted that the IRS did not agree with the $21 billion figure, but wrote that the figure does include estimated savings from new fraud control filters. Without new controls, TIGTA estimated losses of $26 billion.

Part of problem is that the IRS is not gathering enough data about fraud trends, such as how a return was filed, income information from W-2 forms, the amount of refunds and where those refunds were sent, TIGTA said.

“We found that $8.1 million in potentially fraudulent tax refunds involved tax returns filed from one of five addresses,” the audit said.

The IRS said it detected 938,664 fake tax returns during the 2011 processing year, which would have cost $6.5 billion. While TIGTA said the figure was “substantial,” it believes the IRS doesn’t know how many identity thieves are filing bogus returns and how much money is lost.

The IRS has implemented new fraud detection measures, but TIGTA found that institutional procedures were undermining those efforts. For example, taxpayers can begin filing returns in mid-January, but third parties that have information linked to those tax returns do not have to file until March 31.

The IRS is contacting some taxpayers to verify their identity. That simple measure stopped the issuance of $1.3 billion in potentially fraudulent tax returns as of April 19, TIGTA said.

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1 In 5 U.S. PCs Have No Antivirus Protection

Nearly a fifth of Windows PCs in the U.S. lack any active security protection, an antivirus vendor stated on Wednesday, citing numbers from a year-long project.

“The scale of this is unprecedented,” argued Gary Davis, the director of global consumer product marketing for McAfee, talking about the scope of his company’s sampling of PC security.

McAfee took measurements from scans of more than 280 million PCs over the last 12 months, and found that 19.3% of all U.S. Windows computers browsed the Web sans security software. Owners of those systems downloaded and used McAfee’s free Security Scan Plus, a tool that checks for antivirus programs and enabled firewalls.

Globally, the average rate was 17%, putting the U.S. in the top 5 most-unprotected countries of the 24 represented in the scans.

Of the unprotected PCs in the U.S., 63% had no security software at all, while the remaining 37% had an AV program that was no longer active. The latter were likely trial versions of commercial antivirus software that had expired.

Antivirus trials are a fact of life in the Windows world. Most new machines come with security software that runs for a limited time. Some new Dell PCs, for example, come with a 30-day trial of McAfee’s Security Center program.

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SecureID CRACKED?

An analyst has come up with a technique that clones the secret software token that RSA’s SecurID uses to generate one-time passwords.

Sensepost senior security analyst Behrang Fouladi said that the discovery has important implications for the safekeeping of the tokens. Fouladi demonstrated another way determined attackers could circumvent protections built into SecurID. By reverse engineering software used to manage the cryptographic software tokens on computers running Windows, he found that the secret “seed” was easy for people with control over the machines to locate and copy. He provided step-by-step instructions for others to follow in order to demonstrate how easy it is to create clones that mimic verbatim the output of a targeted SecurID token.

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RSA To Replace SecureID Tokens

In an acknowledgement of the severity of its recent systems breach, RSA Security said Monday that it will replace SecureID tokens for any customer that asks.

Customers have been left to ponder whether or not to trust RSA’s security tokens since March, when the company confirmed that it had been hacked and issued a vague warning to its customers. Then, two weeks ago, government contractor Lockheed Martin was reportedly forced to pull access to its virtual private network after hackers compromised the SecureID technology.

In a letter sent to customers Monday, RSA confirmed that the Lockheed Martin incident was related to SecureID. Information “taken from RSA in March had been used as an element of an attempted broader attack on Lockheed Martin,” RSA Executive Chairman Art Coviello stated in the letter.

Coviello said the company remains “highly confident in the RSA SecureID product,” but acknowledged that the recent Lockheed Martin attack and general concerns over hacking, “may reduce some customers’ overall risk tolerance.”

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