Category Archives: Uncategorized

Credit card breach at Dells resort imacts thousands of cards

State Journal Staff
Wisconsin State Journal
September 13, 2011

A Wisconsin company that supplies arcade equipment and vending machines to businesses said hackers broke into its credit-card processing systems at resorts in Tennessee and Wisconsin.

Vacationland Vendors Inc. said Monday up to 40,000 credit and debit cards used in its arcades may have been affected.

Company spokesman Bill Bray said the resorts were Wilderness Waterpark Resort in Wisconsin Dells and the Smokies Resort in Sevierville, Tenn.

The company said it shut down its card-processing systems at both arcades when it discovered the March 22 breach. The company is issuing warnings to patrons who used a credit or debit card at either arcade between Dec. 12, 2008, and May 25, 2011, and is advising those patrons to be on the lookout for unauthorized activity on their bank statements and credit-card bills.

Wis. lawmaker wants texts added to no-call list

Associated Press
Janesville Press Gazette
September 1, 2011

MADISON, Wis. (AP) — A Republican lawmaker from Racine would like to see Wisconsin’s no-call law expanded to cover text messages.

State Sen. Van Wanggaard has drafted a bill that would add text messaging to the definition of solicitation for people who sign up for the no-call list.

The list allows people to remove their phone numbers from telemarketing lists. The program’s website says signing up will help reduce, but not necessarily eliminate, telemarketing calls.

Wanggaard notes that many cellular customers have to pay for incoming text messages. He says his measure would bring the law into the 21st century.

AT&T/T-Mobile Merger Blocked by DOJ

PBS Nightly Business Report
August 31, 2011

The giant merger between AT&T (NYSE: T) and T-Mobile got disconnected today. Susie, the Justice Department filed a lawsuit to block this $39 billion deal.

But in the end, the government called the deal bad for consumers, saying “price, quality and innovation would be diminished if the merger between the number two and number four wireless carriers took place.”

Now today’s lawsuit by the Department of Justice is the biggest challenge yet to this merger, which has faced earlier criticism. The FCC, for one, echoed concerns about competition. AT&T (NYSE: T) stock did fall on the news, down almost 4 percent today. The bulls, though, came calling for Sprint, the competitor here, sending its stock up nearly 6 percent.

AT&T (NYSE: T) tied up its merger with T-Mobile with a pretty political bow. There were promises to build out wireless broadband in rural America, an Obama administration priority. Labor unions were part of the team, 5,000 call center jobs would be brought back to the United States.

But today, Justice Department anti-trust lawyers bucked the political pressure and decided four mobile phone companies was as low as they would go.

There’s a quip from a famous old anti-trust lawyer that used to say the difference between Republicans and Democrats after all the fancy econometrics is Democrats want to see four competitors and Republicans are satisfied with three. I don’t know if that’s true, but that’s where we’ve gotten with this case, is a determination that we need to at least now have four national players with this level of competition.

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UWM computers hacked; data on 75,000 exposed

Stanley A Miller II
August 10, 2011
Milwaukee Journal Sentinel

A computer system at the University of Wisconsin-Milwaukee was hacked and bugged with malicious software, potentially exposing the names and Social Security numbers of about 75,000 students, faculty and staff, the school announced Wednesday.

UWM officials said, however, that investigators have no evidence that data was viewed or stolen, and the school is sending letters Wednesday to those potentially affected by the security breach.

“Talking to the forensic experts, we don’t believe the motive was identity theft,” said Tom Luljak, UWM’s vice chancellor for university relations. “We are a research institution with a significant number of projects under way. It is theorized that this may have been an attempt to look at work being done.”

The school’s technology staff discovered on May 25 that software allowing backdoor access into a UWM database was lurking on a system used for scanning and viewing documents. That system, Luljak said, is an image bank used by several departments for managing a variety of documents, including applications processing.

Luljak said the school isn’t sure how long the malicious software sat on the system before being discovered, but officials think it was for a “short period of time.” The malicious software was installed remotely, Luljack said, and the infected server was immediately shut down.

“We don’t believe anyone got access to the image bank,” Luljak said. “There is no evidence that the hackers actually looked at or retrieved any information.”

The school contacted local and federal law enforcement authorities soon afterward and discovered June 30 that a database had been exposed. Luljak said that although the data included names and Social Security numbers, it didn’t contain any financial data or academic information such as student grades.

“Because of the nature of the malware, our concern was it would provide access to other servers,” Luljak said. “We think it might have been more of a fishing operation.”

Luljak said it took time to determine the specifics of the security breach, noting the school’s experts worked “virtually around the clock.”

“Our responsibility, we believe, is to be completely transparent to those affected,” Luljack said.

The school has set up a website at with information about the security breach, as well as a hotline at (800) 349-8518.

Thieves Found Citigroup Site an Easy Entry

Nelson D. Schwartz and Eric Dash
New York Times
June 13, 2011

Think of it as a mansion with a high-tech security system — but the front door wasn’t locked tight.

Using the Citigroup customer Web site as a gateway to bypass traditional safeguards and impersonate actual credit card holders, a team of sophisticated thieves cracked into the bank’s vast reservoir of personal financial data, until they were detected in a routine check in early May.

That allowed them to capture the names, account numbers, e-mail addresses and transaction histories of more than 200,000 Citi customers, security experts said, revealing for the first time details of one of the most brazen bank hacking attacks in recent years.

The case illustrates the threat posed by the rising demand for private financial information from the world of foreign hackers.

In the Citi breach, the data thieves were able to penetrate the bank’s defenses by first logging on to the site reserved for its credit card customers.

Once inside, they leapfrogged between the accounts of different Citi customers by inserting vari-ous account numbers into a string of text located in the browser’s address bar. The hackers’ code systems automatically repeated this exercise tens of thousands of times — allowing them to capture the confidential private data.

The method is seemingly simple, but the fact that the thieves knew to focus on this particular vulnerability marks the Citigroup attack as especially ingenious, security experts said.

One security expert familiar with the investigation wondered how the hackers could have known to breach security by focusing on the vulnerability in the browser. “It would have been hard to prepare for this type of vulnerability,” he said. The security expert insisted on anonymity because the inquiry was at an early stage.

The financial damage to Citigroup and its customers is not yet clear. Sean Kevelighan, a bank spokesman, declined to comment on the details of the breach, citing the ongoing criminal investigation. In a statement, he said that Citigroup discovered the breach in early May and the problem was “rectified immediately.” He added that the bank had initiated internal fraud alerts and stepped up its account monitoring.

The expertise behind the attack, according to law enforcement officials and security experts, is a sign of what is likely to be a wave of more and more sophisticated breaches by high-tech thieves hungry for credit card numbers and other confidential information.

That is because demand for the data is on the rise. In 2008, the underground market for the data was flooded with more than 360 million stolen personal records, most of them credit and debit files. That compared with 3.8 million records stolen in 2010, according to a report by Verizon and the Secret Service, which investigates credit card fraud along with other law enforcement agencies like the Federal Bureau of Investigation.

Now, as credit cards that were compromised in the vast 2008 thefts expire, thieves are stepping up efforts to find new accounts.

As a result, prices for basic credit card information could rise to several dollars from their current level of only pennies.

“If you think financially motivated breaches are huge now, just wait another year,” said Bryan Sartin, who conducts forensic investigations for Verizon’s consulting arm.

The kind of information the thieves are able to glean is shared in online forums that are a veritable marketplace for criminals. Networks that three years ago numbered several thousands users have expanded to include tens of thousands of hackers.

“These are online bazaars,” said Pablo Martinez, deputy special agent in charge of the Secret Service’s criminal investigation division. “They are growing exponentially and we have seen the entire process become more professional.”

For example, some hackers specialize in prying out customer names, account numbers and other confidential information, Mr. Martinez said. Brokers then sell that information in the Internet bazaars. Criminals use it to impersonate customers and buy merchandise. Finally, “money mules” wire home the profits through outlets like Western Union or MoneyGram.

“It’s like ‘Mission Impossible’ when they select the teams,” said Mark Rasch, a former prosecutor who is now with CSC, an information technology services firm. “And they don’t know each other, except by hacker handle and reputation.”

In the Citi attack, the hackers did not obtain expiration dates or the three-digit security code on the back of the card, which will make it harder for thieves to use the information to commit fraud.

Not every breach results in a crime. But identity theft has ranked first among complaints to the Federal Trade Commission for 11 consecutive years, with 1.34 million in 2010, twice as many as the next category, which is debt collection.

Many of these attacks have their origins in Eastern Europe, including Russia, Belarus, Ukraine and Romania. In fact, the security expert familiar with the Citi breach said it originated in the region, though he would not specify the country.

In Russia,, is one of the larger forums for Eastern European hackers today, with nearly 13,300 registered members, according to Cyveillance. is larger, and has more than 58,000 members. In addition, attacks by Romanian hackers have grown noticeably more advanced recently, according to security experts.

On HackZone, one seller who called himself “zoloto” promised “all cards valid 100%” and that they would be sold only one time.

Underscoring the multinational nature of these rings, American law-enforcement agencies have also been putting more investigators overseas.

“The only way to address a global issue is to address it globally with your partners,” said Gordon M. Snow, assistant director of the F.B.I.’s Cyber Division.

The Secret Service established a presence in Tallinn, Estonia, last month, and has embedded agents with Ukrainian authorities since the beginning of the year. The F.B.I. has embedded agents in the Netherlands, Estonia, Ukraine and Romania, and works closely with its counterparts in Australia, Germany and Britain.

But even officials at these agencies acknowledge that as fast as they move, the hackers’ strategies are evolving at Silicon Valley speed.

“With every takedown, they regroup,” said J. Keith Mularski, a supervisory special agent with the F.B.I.

Rep. Mary Bono Mack proposes data breach legislation

Tony Romm
June 13, 2011

Companies that are breached by hackers who steal consumer information would have to notify customers within 48 hours of assessing and identifying the intrusion under a new data security bill by Rep. Mary Bono Mack.

The proposal is called the Secure and Fortify Electronic Data Act and the California Republican plans to unveil a draft of the legislation Wednesday at a hearing before her Commerce, Manufacturing and Trade Subcommittee.

A version of the bill made public Monday shows it tracks closely with legislation that cleared the Energy and Commerce Committee on a bipartisan vote in 2010, but the proposal makes key tweaks to the bill’s scope.

Bono Mack’s plan would make clear that a broad range of entities — from companies to third-party data holders such as “contracted cloud providers” — are covered under her proposed data breach law. Those companies would have to put in place rules that ensure they only collect and store as much data as they need, according to a Republican memo circulated ahead of the hearing.

If those providers’ servers are breached, however, companies would be required to notify law enforcement within 48 hours of discovering the intrusion, “unless that breach is determined to be inadvertent,” according to the memo.

The affected firms would then have to inform consumers and the Federal Trade Commission, an agency with jurisdiction, within 48 hours of addressing, identifying and assessing the breach. The provision is meant to ensure companies promptly notify those affected, while still granting them the flexibility they may need to investigate the attack.

Companies that fail to conduct their own inquiries in a reasonable amount of time could face penalties by the FTC.

Those sorts of time targets were not as clearly spelled out in the data breach bill put forth by Rep. Bobby Rush (D-Ill.) in the previous Congress. That bill won bipartisan support but failed to clear a floor vote.

As expected, Bono Mack’s bill does not apply to companies that are covered by the security provisions in the Gramm-Leach-Bliley Act or the Health Insurance Portability and Accountability Act.

Still, the chairwoman’s new legislation arrives in response to a torrent of data breaches this year — hacks that have affected previously little-known companies, like Epsilon, and household names, like Sony.

Last week, that pattern continued as hackers targeted Citigroup and the International Monetary Fund.

The hearing Wednesday will mark Bono Mack’s third foray on the issue. Set to testify on the first of two panels is FTC Commissioner Edith Ramirez. A second panel of witnesses will feature Jason Goldman, counsel for telecommunications and e-commerce at the U.S. Chamber of Commerce; Robert Holleyman, president and CEO of the Business Software Alliance; Stuart Pratt, president and CEO of the Consumer Data Industry Association; and Marc Rotenberg, executive director of the Electronic Privacy Information Center.

Thousands of Citi customers at risk after hacker attack

June 9, 2011

Citigroup Inc said computer hackers breached the bank’s network and accessed the data of about 200,000 bank card holders in North America, the latest of a string of cyber attacks on high-profile companies.

Citi said the names of customers, account numbers and contact information, including email addresses, were viewed in the breach, which the Financial Times (newspaper operates behind a paywall) said was discovered by the bank in early May.

However, Citi said other information such as birth dates, social security numbers, card expiration dates and card security codes (CVV) were not compromised.

“We are contacting customers whose information was impacted. Citi has implemented enhanced procedures to prevent a recurrence of this type of event,” Sean Kevelighan, a U.S.-based spokesman, said by email.

“For the security of these customers, we are not disclosing further details.”

In the brief email statement, Citi did not say how the breach had occurred.

Another Citi spokesman, James Griffiths in Hong Kong, said the breach had affected 1 percent of North American card customers, which the bank’s annual report says total 21 million.

But like Japanese electronics and entertainment group Sony, which has declared several security breaches of its networks this year, Citi could come under fire for not telling customers sooner.

“It may be the bank’s business, but it’s the consumer’s personal information so consumers deserve to be told about security breaches immediately,” said Dan Simpson, a spokesman for Australia’s Consumer Action Law Centre, an advocacy group.

“It’s hard to see any reason why this sort of breach couldn’t have been disclosed much sooner.”

Growing concern
Citigroup joins a growing list of companies that have suffered cyber attacks.

Data storage firm EMC Ltd this week offered to replace millions of electronic keys after hackers used data from its RSA security division to break into the network of arms supplier and information technology provider Lockheed Martin.

Sony has reported several attacks, including one in which hackers accessed the personal information on 77 million PlayStation Network and Qriocity accounts.

Sony was criticized for a delay in telling account holders that their information had been stolen by hackers.

Google Inc last week revealed a major attack on its Gmail accounts targeting, among others, senior U.S. government officials that it said appeared to originate in China.

Washington has scrambled to assess if security had been compromised by the raid on Google’s Gmail system, reflecting increasing concerns among global policymakers about cyber security.

Citi said it had discovered the unauthorized access at Citi Account Online, an online banking service, through routine monitoring.

“It’s definitely a serious security breach when that amount of data’s been stolen from a bank,” said Sydney-based Ty Miller, chief technology officer of Pure Hacking, a network security company.

Citigroup global enterprise payments head Paul Galant, who previously ran the bank’s credit card unit, said in April that security breaches are a fact of life for financial institutions.

“Security breaches happen, they’re going to continue to happen … the mission of the banking industry is to keep the customer base safe and customers feeling secure about their financial transactions and payments,” he told Reuters in an interview.