Re: [Dataloss] Study: About One-Fifth ofBreached Entities Were PCI-Compliant

["Al" <macwheel99 () wowway com>]

Thanks for corrections to my understandings.
It is evident that we are talking about multiple reports and data sets, from
which different conclusions may be drawn.

I have not looked at ALL the Verizon reports, but I think it was last year
they said that PCI was NOT the purpose of the report, it was to analyze how
the places got breached, which they had insider data on.  The PCI
perspective there was kind of an after-thought, because of high public
interest in that dimension.  That's what I meant by "secondarily."

There's a lot of places at risk of breaches, with absolutely no obligation
to have PCI, because they do not handle credit card data.  The VA for
example.  Social Security #s on every USA veteran got breached.  PCI not
relevant.  Whose data set is that in?  Inspector General for that Agency.

There's places that got breached in recent years, in my community, which I
have knowledge of, which never made it into the news media, and PCI not
required.  At the time of the breaches, there was no legal requirement to
report the incident, except for the last one on this list.
*       State of Indiana Tax System Hacked.  I found out because the
quarterly filings of data and tax $ from my employer was one of the data
sets and $ which got absconded.
*       An insurance company whose medical records got breached.  I found
out because MY records included in being accessed by unknown volume of 3rd
parties, which they believe could include any of their customers, and anyone
who breached any of them.
*       A series of hacking incidents where I have had running battles with
management regarding our security policies, and am extremely constrained in
what I may say about situation.  We are operating with minimum stuff of each
OS.  Security Logs are a pain to decipher by IT people, let alone
non-technical management. Security consultants challenged some of my
interpretations, I showed them evidence, then they told management that my
interpretations not only correct, situation worse than I had painted due to
confluence of multiple risks.  I had reported them individually.
Consultants confirmed each and explained combination impact.
*       I downloaded an FBI annual report, then later was notified by CSI.
Sorry, the info they asked from me, to register for downloads, that info got
breached.
*       A distributor of goods to grocery chains.  I found out because the
IT leadership involved gave a "lessons learned" seminar that I attended.
Their financial records for payroll and bank accounts were drained.  The FBI
did apprehend a mule.  They had called the FBI because the names of
employees were being used in distant cities to make substantial withdrawals.
*       There was also a test breach, where the federal gov hacked into
local public utility company, then blasted the company for not reporting the
hack promptly.  I learned about that from a similar "lessons learned"
seminar at a local business computer association, for IT people.  This was
the ONLY local breach I am aware of where there was ANY obligation to report
to any government authority.

We got to see in Verizon reports that some places took what most people
would consider reasonable minimum precautions such as anti-virus, firewall,
regularly updated, encryption, internal reviews to catch violations, etc.
and they still got breached.  We also got to see that some breached places
had not taken such minimum precautions.  There was also statistics on HOW
the breach got in ... what kinds of attacks most prevalent.

There are confidentiality agreements, where a place that got breached is not
going to let investigators go public with who they are, and how they screwed
up, unless there's court order demanding they do so, because it just opens
the door to more lawsuits.

I also recall that one of the breaches to a retailer occurred on the exact
same day the PCI auditors were on the premises, giving the retailer a
passing grade.  The PCI auditors did not catch it.  It was a case of back
tracking a breach & finding out when it happened.  I don't think we found
out in that case what company the PCI auditors were from, or if any auditors
would be likely to do any different.

Cases reported to Secret Service or FBI tend to be distorted sub-set, where
amount of $ is considerable documented, certain crimes suspected in first
place.

-
Al Mac
-----Original Message-----
From: Alex Hutton [mailto:alex () alexhutton com] 
Sent: Monday, August 30, 2010 4:21 PM
To: Al
Cc: Chris Walsh; Jake Kouns; dataloss-discuss
Subject: Re: [Dataloss-discuss] [Dataloss] Study: About One-Fifth ofBreached
Entities Were PCI-Compliant

Discussion inline.

Hi Al

On Sun, Aug 29, 2010 at 11:28 PM, Al <macwheel99 () wowway com> wrote:

> If you read the actual Verizon reports,

I'm somewhat familiar with them.


which come out at least annually,
> Verizon is in the business of serving the needs of their customer clients.
>
> We do not have a directory of their customers, other than inference from
> someone whose e-mail address has the word "verizon" in there.
>
> They do not reveal statistics like "We have X million customers of which X
> thousand were knowingly breached."

I think you're confused as to the nature of the data set.  Many/most
of our IR clients are not otherwise Verizon Cybertrust services
customers.  In addition, this year's report includes 3 years of USSS
data.  As such, there is very little information such a statistic
would offer, really.

> They will not reveal any info that could identify which of their customers
> were knowingly breached.
>
> They do not have data on businesses that are not their customers.

Actually, we do.  The data set now includes 3 years of USSS data.

> Their analysis focused primarily on what was wrong, which contributed to
the
> known breach at some company, and how easy it would have been to prevent
it.

The "easy" stat is subjective and interesting, but not a primary focus IMHO.

> Only secondarily did they inquire if the company was they officially in
PCI
> compliance at the time of the known breach.

I'm not sure what you're implying by the term "secondarily", but if
the company had PCI concerns, the IR team is obliged to do a
post-mortem for the card brands.  This is certainly more of a focus
(and less opinionated) than the "easy" stats.

So for example, some site might
> be in PCI compliance at one micro-second, then a second later they get
> breached.

If you buy into the jargon that compliance is the ongoing state of the
security program, and that "validation" is simply the state of nature
assessment - then (and I'm pretty sure I wrote this in the PCI section
of the DBIR) what "compliance" means is that the victim had achieved
validation at last assessment.  It does not mean they were "compliant"
at point of breach (personal note: I *despise* this semantic game -
it's not of our -VZ's- own design, but something our industry does for
some reason).

This means either:
> .       The PCI is good stuff, they lost their security, then got
breached;
> .       There is something not in PCI standards that should be;
> .       The PCI audit was flawed;
> .       Someone is not being truthful.

> It is evident to me from Verizon reports that some of the so-called
> PCI-compliant places that were breached, had either flawed audits, or
> someone is lying.

Or (more likely) they let compliance lapse.  I'm currently working on
another study, and one of the interesting things the data shows us is
year-to-year compliance.  Just because you were validated last year
does not mean you get/will have a clean IROC the next time around.

Finally, there's more wiggle-room.  Many validation exercises use
samples.... We'll leave this for another topic in another thread.

This is irrespective of whether there's room for
> improvement in PCI standards.

And it's too early to say what degree of security the DSS allows.
IMHO there is, however, room for improvement in _all_ our "infosec"
standards :

http://securityblog.verizonbusiness.com/2009/09/22/re-imagining-information-
security-standards/

> I kept saying "knowingly breached" because in lots of cases a company did
> not reveal to the world that it got breached, instead it was processing
some
> data for some 3rd party, like credit card info, and theft of that data was
> traced back to a company that officially did not know anything was wrong.

Well, you have the Verizon data set and DLDB - what do you mean by
"lots"?  I can tell you that I wouldn't characterize our data set as
having a significant representation of that specific scenario.

> So what are the odds that any company that has not yet been discovered, by
> 3rd party thefts, to be in breach condition?

Almost certain.  44% of our incidents took "months" to "years" to
discover the compromise.

> -
>
> Al Mac

<snip>
>
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