How really to prepare for a credit card compromise (PCI) forensics investigation: A ex-QIRA speaks out - David Barnett

Preparing for a PCI forensic investigation
A ex-QIRA speaks out
Copyright 2010

Qualified Incident Response Assessor
They are the special investigation units of the Payment Card Industry who have PCI knowledge and forensic examination skills (supposedly)
What is a QIRA?

David Barnett
Sr. Security Architect, Orbitz WorldWide
also - Sr. Consultant, Blue-Lava - Financial crimes forensic/fraud
Ex Forensics Investigator for a QSA (QIRA)
Consultant/Educator for US Secret Service, DHS, FBI, and DoD.
Participant HoneyNet Project
[email_address] or [email_address] net Copyright 2010

Why this talk
Conversations with David Taylor from PCI Knowledge Base.
Provided a wealth of data from interviews and anonymous questionnaires.
Dave passed away suddenly from a heart attack on Oct 27, 2009.
Breach war stories have been done ad-nausea, poorly most of the time

Breaches effect all merchant levels

Level 4 Merchants

Multi-Site Franchises

Big Corporations

Incident Response Plans should basically the same for all merchant levels

Find the right lawyer
Pick your forensics investigator*
Know how to work with your merchant bank and the card associations
Ensure your software/hardware vendors, VARs, subcontractors, etc. take responsibility for their work
Prepare for the QIRA onsite investigation
*note - forensic (QIRA) vs. other forensic entities
Lessons from 100+ CC investigations

How did we get here?

In the beginning:
US Secret Service and Card Association saw individual breaches not the wider common attack trends
Investigated them as isolated breaches
Remediated as isolated cases
No or little breach trending

Let’s talk a little about breaches

The fundamental ways data breaches occur -
Theft or Loss of Physical Equipment: such as laptop computers or memory storage devices.
Illegal access to the systems or information: A data breach can occur through unlawful access to PII data by technological means such as hacking into existing computer systems.
Insiders: A data breach can be committed by current employees, ex-employees

Who is allowed to perform forensics
Only Qualified Incident Response Assessors
Master list at http://usa.visa.com/merchants/risk_management/cisp_if_compromised.html
The list has changed over the last few years - Last BIG update January 11, 2010 (only 3 companies when I was in the thick of it)
The process of who can be one and who can’t makes no sense at all - though looks to be improving
A credit card breach = PCI forensics onsite

How are merchants notified? or “Why are they picking on me?”
Almost all notification is due to the merchant ID being identified by one of the card brands as a Common Point of Purchase, typically referred to as (CPP) or Point of Compromise (POC)
This is the one method of how a merchant or processor can be identified as the breach point in a payment card fraud / compromise

In this case, the similarity is a single business where all of the stolen credit cards had been used before the cards had been involved in fraudulent activity. This could potentially be the sign of an employee skimming card numbers, or a breach in a database. There are always going to be coincidences involving data on a large scale, but because of the scale, it’s very difficult to end up with false positive fraud once a margin of error is established.

Card issuers may request that MasterCard initiate an investigation of a merchant for possible CPP activity at any time.
Acquiring banks have 5 business days to acknowledge a request from MasterCard for a CPP investigation and 30 calendar days to complete the investigation. Failure to respond may result in fines or assessments . $$$$
Only MasterCard , not a member bank, may designate a merchant location as a CPP and request that an acquiring bank conduct a CPP investigation. MasterCard will identify a merchant location as a CPP from one or more of the following sources:
Information received from law enforcement and investigative authorities
Card issuers in accordance with the established criteria
MasterCard systems, databases, and any other source deemed to be reliable

“Hello, you’ve been breached” Now what? Now what? Now what? Now what?

It is important to move swiftly
Follow your completed Data Breach Incident Response Plan
Document all ongoing events, all people involved, and all discoveries into a timeline for evidentiary use. The following is a list of actions that are going to need to be taken when a breach occurs:

Works with the compromised entity to obtain all potentially compromised account numbers.
Disseminates "at risk" account numbers (or data) to the issuing banks.
Begins monitoring the activity on the affected accounts.
Works with the appropriate law enforcement on the entity’s behalf.
Provides guidelines to the compromised entity to assist them in responding to the incident.
Works with the entity to identify security deficiencies.
Facilitates forensic investigation in a timely manner.
Ensures the entity takes corrective action to minimize the risk of future loss or theft of account information.
Works with the entity to verify PCI DSS compliance in an expedited timeframe.
Visa Fraud Investigations CISP Team has their own agenda, though they state the following:

Account Data Compromise Recovery (ADCR) process:
Visa validates whether validated compromise meets ADCR criteria (full track, 10,000+ US accounts, incremental magnetic stripe counterfeit fraud on accounts)
Visa calculates and advises the acquirer of its potential ADCR financial liability
If at the end of the issuer fraud reporting window Visa calculates actual fraud and operating expense liability due to each participating and impacted issuer Visa notifies acquirers and issuers of their respective liability and reimbursement

From Breach to Fraud - Typical Timeline

Merchant discovers account compromise and notifies it acquiring bank
Compromised (or suspected) accounts are uploaded into CAMS for monitoring
Visa investigates to determine if an account compromise has occurred and sends CAMS alerts to affected issuers to notify them of compromised accounts
Affected issuers monitor, block or close compromised accounts
Compromised Account Management System (CAMS):

Post notification, know what your expected to do, what you need to do, and the difference

Visa mandated steps in event of a suspected payment card data breach
Immediately contain and limit exposure
Alert all necessary parties immediately
Provide all compromised accounts to your merchant bank within 10 days
Provide an Incident Response Report within 3 days to your merchant bank

What your expected to do by the card associations
The development of an Incident Response Plan is mandated by the PCI DSS in Requirement 12.9:
12.9.1: Create an incident response plan
12.9.2: Test the plan at least annually
12.9.3: Designate specific personnel to be available on a 24/7 basis to respond to incidents
12.9.4: Provide appropriate training to staff with security breach response responsibilities
12.9.5: Include alerts from IDS, IP and file integrity monitoring systems
12.9.6: Develop processes to modify and evolve the IR plan according to lessons learned.

Focus areas during the forensic investigation
Determine the type of cardholder information at risk
Determine the how many cardholder information is /was at risk
Perform incident validation and assessment
Check for sensitive authorization data - Track data, CVV2 and PIN block storage
Review payment gateway, VisaNet endpoint security and risk
Preserve all electronic evidence
Perform an internal and external vulnerability scan
Was the merchant PCI compliant at the time of the breach

Be sure to contact - Be sure to contact -
Your internal information security group and incident response team.
Your merchant bank.
Your local office of the United States Secret Service.
If you do not know the exact name and/or contact information for your merchant bank, notify Visa Fraud Investigations and Incident Management group immediately at (650) 432-2978.

Provide all compromised Visa, Interlink, and Plus accounts to your merchant bank within 10 business days.
All potentially compromised accounts must be provided and transmitted as instructed by your merchant bank and Visa Fraud Investigations and Incident Management group.
Visa will distribute the compromised Visa account numbers to Issuers and ensure the confidentiality of entity and non-public information.
Within 3 business days of the reported compromise, provide an Incident Report document to your merchant bank

Know the key stakeholders

..and know them intimately Merchant POS Software/hardware Merchant Bank Card Association Payment Gateway Acquiring Bank Processor

Be Prepared to Answer the Following
Initial point of entry
Timeline of events
Intruder information
Data exfiltrated and exposed
Compromised accounts
Malware
Network architecture and application overview
Logging and monitoring
Investigative methods
Regulatory review
Encryption
Containment efforts

Per Visa - Identify and establish relationships agreements with key vendors, including:
Outside IT security forensics experts who can investigate if, when and how a breach occurred, and how to close and repair your system.
“Visa requires its partners to use external experts for this function, and doing so is critical to establishing credibility with the media, customers, investors and other key audiences. Also, consider using a different vendor from the one that may have done previous security assessments “

Identify how the breach happened, contain the breach, and implement a solution so it can not happen again
Notify appropriate people within the company
Notify External Agencies, within required time frames, such as:
›› Forensics Investigator
›› Law Enforcement
›› Affected vendors, suppliers
›› FTC
›› State Attorneys General (where applicable)
›› Consumers

Visa and MasterCard are not interested in forensics, they are interested in risk mitigation.
Visa maintains relationships with their QSA’s for a reason
Tend to work with the same people throughout the PCI-DSS world, for example, same people move from a QSA company to the PCI SSC (PCI Security Standards Council)
Creates an echo chamber
Lack of knowledge of modern forensics
Place artificial pressure on investigators to got out a compromise time frame
Rather wind down a case on lax evidence than determine the true causal effect of compromise and compromise patterns
Saw this all the time while a QIRA

Important breach issues Breach Issues Action Items
Mandated Breach Notification
Media reporting
Negative customer reaction
Cost associated with brand damage and lost revenue
Which States require notification
Hire firm for media coverage and creating early press releases
Early customer communications

Breach Fines (the ugly truth) (the ugly truth)

Stiff fines and penalties ranging from $10K-$500K per month for non-compliance
$500K fine per credit card data compromise incident if not PCI compliant
$100K fine if Visa is not immediately notified of as suspected data breach
If track data or other sensitive data elements was compromised, the merchant can be assessed the estimated cost of fraud under Visa’s ADCR Program as well as cost of card re-issuance (est. $7-$20 per card)
Potential termination of credit card processing privileges
Fines; according to the card associations

Monthly Prohibited Data Storage Violation Fines Months Months 1-3 Months 4-6 Months 7 and up Merchant Level 1 $10,000 $50,000 $100,000 Merchant Level 2 $5,000 $25,000 $50,000 $5,000 $25,000 $50,000 $5,000 $25,000 $50,000 $5,000 $25,000 $50,000 $5,000 $25,000 $50,000 $5,000 $25,000 $50,000 $5,000 $25,000 $50,000 Fines for Merchant Data Compromise Up to $600,000 for non-compliance with PCI DSS requirements.Issuer Recovery Cost of Fraud. Charges that occurred on all exposed cards from the compromised location.The cost of the forensic investigation.The cost to replace exposed credit cards. Up to $600,000 for non-compliance with PCI DSS requirements.Issuer Recovery Cost of Fraud. Charges that occurred on all exposed cards from the compromised location.The cost of the forensic investigation.The cost to replace exposed credit cards.

Large discrepancies in the per incident cost between large level 1 merchants and level 4 merchants
An average fine for a single food services merchant (a local bar) was $350k not including:
lawyers costs
Forensics assessment, incident investigation and containment
Upgrading non-compliant POS software & IT and security remediation and enhancements
Identity protection for impacted individuals (~$30 per person)
Cost associated with onsite validation for 1 year - now a Level 1 merchant
Class action lawsuits and liability in the event that privacy data was compromised
In reality, fines have been handed down with no consistency

The Heartland Data Breach Aftermath
"Visa sent customized settlement information packets to the affected financial institutions on January 14, 2010. In order to accept the settlement, a financial institution was required to affirmatively complete and return the settlement paperwork to Visa by January 29, 2010," said the statement from lawyers representing some of the impacted banks. "The offers--at least those reviewed by class counsel--appeared to be less than 10 cents on the dollar for most financial institutions and some at less than 1 cent on the dollar. "

Other issues to deal with

Make sure you know a qualified lawyer and call them immediately A good lawyer can make all the difference in the penalty phase

Does the lawyer have:
dedicated Internet law department?
In house forensics professional?
Know what PCI is?
Worked with and know key individuals at Visa/MasterCard, the banks, processors, etc.
How many digital crimes cases have they handled?
Interview your lawyer

Know your merchant bank’s Point of Contact for fraud /PCI
Call them. Get to know this person. Take them for a beer.
They will be involved early in the process, up until the very end.
They typically know their counter parts at the card associations
But wait, do you have a processor who isn’t your merchant bank? Better find out and give them a call too!
Ensure these people are your advocate.
Merchant Bank

Hardware/Software Vendors
For level 4 merchants this can be quite complicated

Where does the responsibility lay?

Large Merchants
Per incident costs typically lower than level 3 or 4 merchants
IT staff
Leverage with manufacturers
Media/Marketing Dept. to control the message

The “favorites” game
Several instances of medium to large size breaches which remain off all breach lists and in the media
Good legal representation early in the process
Tend to lay blame of the software/hardware vendors
Card Associations deathly afraid of Full Disclosure
These and other issues have lead to many complaints of the ADCR process
http://Datalossdb.org unofficial master record-keeper of breaches

In an interesting development, a handful of issuing banks impacted by the Heartland breach have filed a class action lawsuit against two acquiring banks related to Heartland Payment Systems. According to this article , the issuing banks are unhappy with Heartland's proposed settlement with Visa. This appears and to be an attempted end-run around the proposed $60 million settlement with Visa. It also may demonstrate that issuing banks are not satisfied with the dispute resolution mechanisms under the Visa Operating Regulations (the Account Data Compromise Recovery process estimated the loss at $140 million, yet the settlement was for only $60 million), and their ability to be made whole under those mechanisms. From 01/21/2010 www.infolawgroup.com

Breach Trends
Just as merchants shop for PCI assessors (QSA’s) merchants shop for QIRA’s
This tends to skew a specific company’s analysis

TrustWave Hospitality: 38%*Financial services: 19%Retail: 14%Food and beverage:13% Verizon CyberTrust Retail: 31% Financial services: 30% Food and beverage:14% Hospitality:6% Other: 17% Symantec Education: 27% Government: 20% Health care:15% Financial :14% .............

Trend Analysis
Trend numbers from each company by themselves should not be taken all that seriously
Some basic trends can be seen when viewed outside the confines of these companies
www.datalossdb.org is a good overall source for breach data but ... several breach cases I worked on and am aware of are not on their list

Definite trends can be seen when viewed outside the confines of each of the forensics company

Next up ..... banks
(February 16, 2010) A Michigan-based manufacturing firm is suing its bank after online crooks depleted the company's account by $560,000 via a series of unauthorized wire transfers last year.
The lawsuit is one of several that have been filed over the past few months involving banks and customers victimized by online theft. In this case, the theft occurred after an employee at EMI supplied the crooks with the company's online banking credentials in response to a phishing e-mail that purported to come from the bank.

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How really to prepare for a credit card compromise (PCI) forensics investigation: A ex-QIRA speaks out - David Barnett

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How really to prepare for a credit card compromise (PCI) forensics investigation: A ex-QIRA speaks out - David Barnett Presentation Transcript