Entries Tagged "security standards"

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Ed Felten on the NSA Disclosures

Ed Felten has an excellent essay on the damage caused by the NSA secretly breaking the security of Internet systems:

In security, the worst case—the thing you most want to avoid—is thinking you are secure when you’re not. And that’s exactly what the NSA seems to be trying to perpetuate.

Suppose you’re driving a car that has no brakes. If you know you have no brakes, then you can drive very slowly, or just get out and walk. What is deadly is thinking you have the ability to stop, until you stomp on the brake pedal and nothing happens. It’s the same way with security: if you know your communications aren’t secure, you can be careful about what you say; but if you think mistakenly that you’re safe, you’re sure to get in trouble.

So the problem is not (only) that we’re unsafe. It’s that “the N.S.A. wants to keep it that way.” The NSA wants to make sure we remain vulnerable.

Posted on September 12, 2013 at 6:05 AMView Comments

PCI Lawsuit

This is a first:

…the McCombs allege that the bank, and the payment card industry (PCI) in general, force merchants to sign one-sided contracts that are based on information that arbitrarily changes without notice, and that they impose random fines on merchants without providing proof of a breach or of fraudulent losses and without allowing merchants a meaningful opportunity to dispute claims before money is seized.

It’s the first known case to challenge the heart of the self-regulated PCI security standards ­ a system that requires businesses accepting credit and debit card payments to implement a series of technological steps to secure data. The controversial system, imposed on merchants by credit card companies like Visa and MasterCard, has been called a “near scam” by a spokesman for the National Retail Federation and others who say it’s designed less to secure card data than to profit credit card companies while giving them executive powers of punishment through a mandated compliance system that has no oversight.

The PCI standards are probably the biggest non-government security standard. It’ll be interesting to see how this turns out.

Posted on January 16, 2012 at 9:58 AMView Comments

FIPS 140-2 Level 2 Certified USB Memory Stick Cracked

Kind of a dumb mistake:

The USB drives in question encrypt the stored data via the practically uncrackable AES 256-bit hardware encryption system. Therefore, the main point of attack for accessing the plain text data stored on the drive is the password entry mechanism. When analysing the relevant Windows program, the SySS security experts found a rather blatant flaw that has quite obviously slipped through testers’ nets. During a successful authorisation procedure the program will, irrespective of the password, always send the same character string to the drive after performing various crypto operations—and this is the case for all USB Flash drives of this type.

Cracking the drives is therefore quite simple. The SySS experts wrote a small tool for the active password entry program’s RAM which always made sure that the appropriate string was sent to the drive, irrespective of the password entered and as a result gained immediate access to all the data on the drive. The vulnerable devices include the Kingston DataTraveler BlackBox, the SanDisk Cruzer Enterprise FIPS Edition and the Verbatim Corporate Secure FIPS Edition.

Nice piece of analysis work.

The article goes on to question the value of the FIPS certification:

The real question, however, remains unanswered ­ how could USB Flash drives that exhibit such a serious security hole be given one of the highest certificates for crypto devices? Even more importantly, perhaps ­ what is the value of a certification that fails to detect such holes?

The problem is that no one really understands what a FIPS 140-2 certification means. Instead, they think something like: “This crypto thingy is certified, so it must be secure.” In fact, FIPS 140-2 Level 2 certification only means that certain good algorithms are used, and that there is some level of tamper resistance and tamper evidence. Marketing departments of security take advantage of this confusion—it’s not only FIPS 140, it’s all the security standards—and encourage their customers to equate conformance to the standard with security.

So when that equivalence is demonstrated to be false, people are surprised.

Posted on January 8, 2010 at 7:24 AMView Comments

Merchants Not Storing Credit Card Data

Now this is a good idea:

In a letter sent Thursday to the Payment Card Industry (PCI) Security Standards Council, the group responsible for setting data-security guidelines for merchants and vendors, the National Retail Federation requested that member companies be allowed to instead keep only the authorization code and a truncated receipt, the NRF said in a statement.

Erasing the data is the easiest way to secure it from theft. But, of course, the issue is more complicated than that, and there’s lots of politics. See the article for details.

Posted on October 15, 2007 at 2:05 PM

Visa and Amex Drop CardSystems

Remember CardSystems Solutions, the company that exposed over 40 million identities to potential fraud? (The actual number of identities that will be the victims of fraud is almost certainly much, much lower.)

Both Visa and American Express are dropping them as a payment processor:

Within hours of the disclosure that Visa was seeking a replacement for CardSystems Solutions, American Express said Tuesday it would no longer do business with the company beginning in October.

The biggest problem with CardSystems’ actions wasn’t that it had bad computer security practices, but that it had bad business practices. It was holding exception files with personal information even though it was not supposed to. It was not for marketing, as I originally surmised, but to find out why transactions were not being authorized. It was disregrading the rules it agreed to follow.

Technical problems can be remediated. A dishonest corporate culture is much harder to fix. This is what I sense reading between the lines:

Visa had been weighing the decision for a few weeks but as recently as mid-June said that it was working with CardSystems to correct the problem. CardSystems hired an outside security assessor this month to review its policies and practices, and it promised to make any necessary upgrades by the end of August. CardSystems, in its statement yesterday, said the company’s executives had been “in almost daily contact” with Visa since the problems were discovered in May.

Visa, however, said that despite “some remediation efforts” since the incident was reported, the actions by CardSystems were not enough.

And this:

CardSystems Solutions Inc. “has not corrected, and cannot at this point correct, the failure to provide proper data security for Visa accounts,” said Rosetta Jones, a spokeswoman for Foster City, Calif.-based Visa….

Visa said that while CardSystems has taken some remediating actions since the breach was disclosed, those could not overcome the fact that it was inappropriately holding on to account information—purportedly for “research purposes”—when the breach occurred, in violation of Visa’s security rules.

At this point, it is unclear what MasterCard and Discover will do.

MasterCard International Inc. is taking a different tack with CardSystems. The credit card company expects CardSystems to develop a plan for improving its security by Aug. 31, “and as of today, we are not aware of any deficiencies in its systems that are incapable of being remediated,” spokeswoman Sharon Gamsin said.

“However, if CardSystems cannot demonstrate that they are in compliance by that date, their ability to provide services to MasterCard members will be at risk,” she said.

Jennifer Born, a spokeswoman for Discover Financial Services Inc., which also has a relationship with CardSystems, said the Riverwoods, Ill.-based company was “doing our due diligence and will make our decision once that process is completed.”

I think this is a positive development. I have long said that companies like CardSystems won’t clean up their acts unless there are consequences for not doing so. Credit card companies dropping CardSystems sends a strong message to the other payment processors: improve your security if you want to stay in business.

(Some interesting legal opinions on the larger issue of disclosure are here.)

Posted on July 21, 2005 at 11:49 AMView Comments

CardSystems Exposes 40 Million Identities

The personal information of over 40 million people has been hacked. The hack occurred at CardSystems Solutions, a company that processes credit card transactions. The details are still unclear. The New York Times reports that “data from roughly 200,000 accounts from MasterCard, Visa and other card issuers are known to have been stolen in the breach,” although 40 million were vulnerable. The theft was an intentional malicious computer hacking activity: the first in all these recent personal-information breaches, I think. The rest were accidental—backup tapes gone walkabout, for example—or social engineering hacks. Someone was after this data, which implies that’s more likely to result in fraud than those peripatetic backup tapes.

CardSystems says that they found the problem, while MasterCard maintains that they did; the New York Times agrees with MasterCard. Microsoft software may be to blame. And in a weird twist, CardSystems admitted they weren’t supposed to keep the data in the first place.

The official, John M. Perry, chief executive of CardSystems Solutions…said the data was in a file being stored for “research purposes” to determine why certain transactions had registered as unauthorized or uncompleted.

Yeah, right. Research = marketing, I’ll bet.

This is exactly the sort of thing that Visa and MasterCard are trying very hard to prevent. They have imposed their own security requirements on companies—merchants, processors, whoever—that deal with credit card data. Visa has instituted a Cardholder Information Security Program (CISP). MasterCard calls its program Site Data Protection (SDP). These have been combined into a single joint security standard, PCI, which also includes Discover, American Express, JCB, and Diners Club. (More on Visa’s PCI program.)

PCI requirements encompass network security, password management, stored-data encryption, access control, monitoring, testing, policies, etc. And the credit-card companies are backing these requirements up with stiff penalties: cash fines of up to $100,000, increased transaction fees, orand termination of the account. For a retailer that does most of its business via credit cards, this is an enormous incentive to comply.

These aren’t laws, they’re contractual business requirements. They’re not imposed by government; the credit card companies are mandating them to protect their brand.

Every credit card company is terrified that people will reduce their credit card usage. They’re worried that all of this press about stolen personal data, as well as actual identity theft and other types of credit card fraud, will scare shoppers off the Internet. They’re worried about how their brands are perceived by the public. And they don’t want some idiot company ruining their reputations by exposing 40 million cardholders to the risk of fraud. (Or, at least, by giving reporters the opportunity to write headlines like “CardSystems Solutions hands over 40M credit cards to hackers.”)

So independent of any laws or government regulations, the credit card companies are forcing companies that process credit card data to increase their security. Companies have to comply with PCI or face serious consequences.

Was CardSystems in compliance? They should have been in compliance with Visa’s CISP by 30 September 2004, and certainly they were in the highest service level. (PCI compliance isn’t required until 30 June 2005—about a week from now.) The reality is more murky.

After the disclosure of the security breach at CardSystems, varying accounts were offered about the company’s compliance with card association standards.

Jessica Antle, a MasterCard spokeswoman, said that CardSystems had never demonstrated compliance with MasterCard’s standards. “They were in violation of our rules,” she said.

It is not clear whether or when MasterCard intervened with the company in the past to insure compliance, but MasterCard said Friday that it had now given CardSystems “a limited amount of time” to do so.

Asked about compliance with Visa’s standards, a Visa spokeswoman, Rosetta Jones, said, “This particular processor was not following Visa’s security requirements when we found out there was a potential data compromise.”

Earlier, Mr. Perry of CardSystems said his company had been audited in December 2003 by an unspecified independent assessor and had received a seal of approval from the Visa payment associations in June 2004.

All of this demonstrates some limitations of any certification system. One, companies can take advantage of interpersonal and intercompany politics to get themselves special treatment with respect to the policies. And two, all audits rely to a great extent on self-assessment and self-disclosure. If a company is willing to lie to an auditor, it’s unlikely that it will get caught.

Unless they get really caught, like this incident.

Self-reporting only works if the punishment exceeds the crime. The reason people accurately declare what they bring into the country on their customs forms, for example, is because the penalties for lying are far more expensive than paying any duty owed.

If the credit card industry wants their PCI requirements taken seriously, they need to make an example out of CardSystems. They need to revoke whatever credit card processing license CardSystems has, to the maximum extent possible by whatever contracts they have in place. Only by making CardSystems a demonstration of what happens to someone who doesn’t comply will everyone else realize that they had better comply.

(CardSystems should also face criminal prosecution, but that’s unlikely in today’s business-friendly political environment.)

I have great hopes for PCI. I like security solutions that involve contracts between companies more than I like government intervention. Often the latter is required, but the former is more effective. Here’s PCI’s chance to demonstrate their effectiveness.

Posted on June 23, 2005 at 8:55 AMView Comments

Sidebar photo of Bruce Schneier by Joe MacInnis.