Entries tagged with “PCI DSS”.


A major national insurance company announced this week that its network had been compromised and more than 1 million customer records were stolen. Among the data included in the breach are “people’s names and a combination of Social Security numbers, driver’s license numbers, their date of birth, and possibly marital status, gender, and occupation, as well as the names and addresses of employers.”  A company spokesperson said that there is no evidence that credit card information or medical information was involved in the breach.  Affected individuals are being notified and offered free credit monitoring services.

It is interesting to note that this is the latest compromise in which sensitive personal information was stolen, while credit card data seems not have been involved.  A few months ago, South Carolina had a similar type of incident in which social security and banking information was compromised, while the encrypted cardholder data remained secure.  Now, I don’t have any details or knowledge of these events outside what is printed in the releases or articles, but it does leave me thinking of a very important reminder: PCI DSS only addresses cardholder data, not any other sensitive personal information.  Birth dates, routing numbers, social security numbers and other sensitive are left out in the cold with respect to PCI DSS, though they merit just as much, if not more, protection than cardholder data.

PCI DSS only applies to cardholder data.  It provides a baseline of protection for credit and debit card information.  Nowhere in its requirements does the PCI DSS require companies to protect social security numbers, bank routing information, birthdates or any other sensitive information.  Many companies take great pains to comply with PCI DSS and the standard has done a lot of positive things for an industry that desperately needed to implement strong security.  However, simply being PCI DSS compliant does not mean that all the sensitive data in an organization’s environment is protected.  A serious obstacle to overall security arises when companies believe that compliance with PCI DSS equates to security.

PCI DSS provides a good launching point for security initiatives.  Many of the requirements contained in the standards are best practices (if not requirements) for other types of data, as well.  It is tempting, particularly with so much focus on compliance, to focus on PCI DSS and cardholder data to the exclusion of everything else.  It’s important to remember, though, that companies have many types of data in their networks.  Companies would be well-served to conduct a data inventory, find out what they really need and what they don’t need to keep.  If it is needed, then it should be adequately protected. If it is not needed, it shouldn’t be stored.  Excess data is excess liability.

“The times are tough now, just getting tougher  - This old world is rough, it’s just getting rougher - Cover me, come on baby, cover me” – Bruce Springsteen 1984

Businesses work very hard to build their brand.   Small businesses are no different.  Establishing trust and loyalty among the customer base is essential to the longevity of any business.  Many companies focus on marketing and sales relationships to ensure that connection between customer and company continues to grow.  Social media, direct mailings, radio and tv advertising, print advertising, and data security and privacy policies all contribute to the growth of brand trust.  What a minute!  Did I say data security and privacy policies?  You betcha!  This is what I like to refer to as “brand security.”  Businesses spend an inordinate amount of time and money on establishing a brand that customers trust.  One of the fastest ways to lose that trust is to suffer a data security breach or to violate customer privacy.  For that reason, I often refer to data security and privacy programs as “brand cover.”

I’m going to borrow heavily, and probably poorly, from law enforcement and military actions here.  When you go into action, you generally have a forward team and then you have a team that provides “cover.”  This team keeps an eye out for threats that may not be visible or apparent to the forward team, but pose significant risk.  In the business world, one can think of your sales and marketing efforts as the forward team, while data security and privacy programs provide the cover.  You marketing and sales efforts move the company forward and increase awareness.  Your data security and privacy programs help to mitigate unseen, and sometimes unknown, risks to your brand’s integrity.  In fact, some larger organizations, particularly not-for-profits, are more concerned about brand damage in the event of a security or privacy compromise, than they are the fines that may be associated.

For small businesses, implementing and enforcing data security and privacy policies can seem daunting.  The Better Business Bureau, though, has put together a primer for businesses to help them develop these programs.  If you accept debit and credit card transactions, you can look for services to help minimize how much of that sensitive payment data your business stores.  You can also undertake an inventory to see just what data you are collecting and storing and how you are protecting it.  You can also evaluate the partners that you use and how you share data with them. Understanding your data can ultimately serve as a very effective means of protecting your company, your brand, and your customers.

When we talk about the protection of data, particularly sensitive personal information like credit card or social security numbers, we often focus on “digital data.”  By digital data, I mean that data that is stored in our networks and computers, our POS systems and other “networked” appliances.  It’s easy to lose sight of the fact that copiers, printers, and fax machines are often “networked appliances,” complete with memory.  That means that it is conceivable that when you send a fax or make a copy, that appliance could retain that data in its memory.  As a result, that appliance now represents a point of vulnerability for the network.

The ability of these devices to store data should also be a consideration with looking to lease or buy previously used equipment, particularly when buying or leasing used POS equipment.  You may be introducing someone else’s liability into your secure environment.  This is where having proper policies and procedures becomes vitally important.  Merchants should have a process for evaluating security options on the device or equipment (does it allow for overwriting or encrypting the data in memory?); security procedures should also be in place to ensure that the device memory is regularly overwritten to avoid data leakage.

The PCI DSS specifically requires that companies “Protect Stored Cardholder Data Wherever it is Stored.”  Unfortunately, as our businesses grow, that often means that our cardholder data environment grows along with it.  Information security policies and processes become more and more important.  It can also be helpful to find strategies for limiting the size of the cardholder data environment.

Recent reports indicate that small businesses tend to overlook the threat of a data security breach.  Controlscan, a company that specializes in assisting small and medium sized businesses with PCI compliance issues, recently completed a study in cooperation with Merchant Warehouse.  The findings indicate that close to 80% of the surveyed merchants felt that they had little to no risk of a breach.  What’s more, according to ControlScan’s CEO Joan Herbig, close to half of the merchants surveyed hadn’t even heard of the PCI DSS.  These findings indicate a serious lack of communication between ISOs and Acquirers and their small merchants.

Since 2006, all organizations that store, process, or transmit cardholder data have been required to comply with the data security requirements contained within the Payment Card Industry Data Security Standard.  In fact, the Payment Card Industry Security Standards Council has even created a microsite dedicated to educating small merchants on the PCI DSS and their obligations under that standard.  The ramifications of non-compliance are many and can be overwhelming even for large merchants.  Should a breach occur, the fines, fees, and penalties can quickly add up and in many cases have put companies out of business.

This post could easily take on an alarmist tone.  Some might say that it already has.  Regardless, though, small merchants must comply with the same set of standards to which large companies are beholden.  How can one do that with comparatively limited resources?  By trying to limit the places in the merchant system that store, process, and transmit cardholder data.  Using a solution that processes payment card transactions using point to point encryption (P2PE) and tokenization can serve two objectives – making the data more secure, and reducing the burden of complying with the PCI DSS.

If you are a small merchant and you haven’t heard about PCI DSS or aren’t sure what you should do, reach out to your ISO or Acquirer.  They can explain what the standard requires and how you can achieve compliance.

Barnes and Noble has reported that PIN entry devices in dozens of its stores have been hacked.  According to the company, one device in each of 63 different stores  had been compromised. The company said that its website and purchase made on the Nook were not impacted by the breach.    Reports indicate that the stores involved in the compromise were located in California, Connecticut, Florida, Illinois, Massachusetts, New Jersey, New York, Pennsylvania and Rhode Island. B&N is working with banks to notify affected customers.    The company acted swiftly in disconnecting the devices in all of its more than 700 stores once the breach was discovered. Further, the company altered the process for using a card to a more secure method.  Rather than swiping the card, the consumer will now hand the cashier the card to be swiped, a process the company believes to be more secure.

There are two security issues at play here. The first is the question of physical security.  How many times have you walked into a grocery store, or any store for that matter, and used the PIN pad device without the assistance of the clerk?  While that certainly adds convenience, it can also introduce risk.  The following video demonstrates just how easy it can be to compromise a PIN pad machine.

As you can see, without the proper physical security, attaching a skimming device or tampering with the machine can take just a matter of seconds. If you are accepting cards it is vitally important to think about the physical security of the data, as well as the technical security.  If you use a mobile device, ensure that it is with you at all times.  If it is not with you, it should be locked in a secured location.  If you are using a Point of Sale solution or a PIN pad device, make sure that it is secured to the counter and that you can tell whether or not the device has been altered.  In the video above, the clerk noticed that machine had been tampered with and was able to prevent the theft of data.

The second issue at play here is the technical aspect of security.  This is of particular consequence, because thieves that are able to access full card data can make counterfeit cards and the volume of fraudulent transactions increases significantly.  To counter this, the PCI SSC has drafted a number of documents specifically aimed at protecting PIN pad devices.  You can find all of the PCI SSC security documents on the Library section of their website.

Security of transaction data is not an “online only” problem.  Thieves are able to extrapolate physical theft into credit card fraud.  That means the physical instruments that we use to accept credit card transactions must be afforded the same level of protection as the systems in which we store that data (e.g. databases or POS applications).