New Bill Seeks Basic IoT Security Standards

Lawmakers in the U.S. Senate today introduced a bill that would set baseline security standards for the government’s purchase and use of a broad range of Internet-connected devices, including computers, routers and security cameras. The legislation, which also seeks to remedy some widely-perceived shortcomings in existing cybercrime law, was developed in direct response to a series of massive cyber attacks in 2016 that were fueled for the most part by poorly-secured “Internet of Things” (IoT) devices.

iotc

The IoT Cybersecurity Improvement Act of 2017 seeks to use the government’s buying power to signal the basic level of security that IoT devices sold to Uncle Sam will need to have. For example, the bill would require vendors of Internet-connected devices purchased by the federal government make sure the devices can be patched when security updates are available; that the devices do not use hard-coded (unchangeable) passwords; and that vendors ensure the devices are free from known vulnerabilities when sold.

The bill, introduced by Sens. Steve Daines (R-Mont.), Cory Gardner (R-Colo.), Mark Warner (D-Va.) and Ron Wyden (D-Wyo.), directs the White House Office of Management and Budget (OMB) to develop alternative network-level security requirements for devices with limited data processing and software functionality. In addition, it requires each executive agency to inventory all Internet-connected devices in use by the agency.

The bill’s provisions would seem to apply to virtually any device that has an Internet connection and can transmit data. Under the proposal, an IoT device has a fairly broad definition, being described as “a physical object that is capable of connecting to and is in regular connection with the Internet;” and one that “has computer processing capabilities that can collect, send or receive data.”

According to the bill’s core sponsors, the measure already has the support of several key legislative technology groups, including the Center for Democracy & Technology (CDT), Mozilla, and the Berklett Cybersecurity Project at Harvard University’s Berkman Klein Center for Internet & Society.

Those advocates were no doubt involved in shaping other aspects of this legislation, including one that exempts cybersecurity researchers engaging in good-faith research from liability under the Computer Fraud and Abuse Act (CFAA), a dated anti-cybercrime law that many critics say has been abused by government prosecutors and companies to intimidate and silence security researchers.

Perhaps the most infamous example of prosecutorial overreach under the CFAA comes in Aaron Swartz, a Harvard research fellow who committed suicide after being hounded by multiple CFAA fraud charges by state and federal prosecutors for downloading a large number of academic journals.

Specifically, the bill would “exempt cybersecurity researchers engaging in good-faith research from liability under the Computer Fraud and Abuse Act and the Digital Millennium Copyright Act when in engaged in research pursuant to adopted coordinated vulnerability disclosure guidelines,” according to a statement released by Sen. Warner (link added).

The measure also directs the Department of Homeland Security to issue guidelines regarding cybersecurity coordinated vulnerability disclosure policies to be required by contractors providing connected devices to the U.S. government.

Last fall, Sens. Warner and others pinged federal regulators at the U.S. Federal Trade Commission (FTC) and the U.S. Federal Communications Commission (FCC) to see if something more could be done about the proliferating threat from poorly-security IoT devices.

At the time, the world had just witnessed two of the largest cyberattacks the Internet had ever seen (including one against this Web site). Those attacks were launched with the help of IoT devices — mostly cheap security cameras and Internet routers — that were hacked thanks largely to user accounts which could not be removed and which were configured to be remotely accessible over the Internet.

A full text of the Senate proposal is available here.

From https://krebsonsecurity.com/2017/08/new-bill-seeks-basic-iot-security-standards/

Suspended Sentence for Mirai Botmaster Daniel Kaye

Last month, KrebsOnSecurity identified U.K. citizen Daniel Kaye as the likely real-life identity behind a hacker responsible for clumsily wielding a powerful botnet built on Mirai, a malware strain that enslaves poorly secured Internet of Things (IoT) devices for use in large-scale online attacks. Today, a German court issued a suspended sentence for Kaye, who now faces cybercrime charges in the United Kingdom.

Daniel Kaye's Facebook profile page.

Daniel Kaye’s Facebook profile page.

In February 2017, authorities in the United Kingdom arrested a 29-year-old U.K. man on suspicion of knocking more than 900,000 Germans offline in a Mirai attack in November 2016. Shortly after that 2016 attack, a hacker using the nickname “Bestbuy” told reporters he was responsible for the outage, apologizing for the incident.

Prosecutors in Europe had withheld Kaye’s name from the media throughout the trial. But a court in Germany today confirmed Kaye’s identity as it handed down a suspended sentence on charges stemming from several failed attacks from his Mirai botnet — which nevertheless caused extensive internet outages for ISPs in the U.K., Germany and Liberia last year.

On July 5, KrebsOnSecurity published Who is the GovRAT Author and Mirai Botmaster BestBuy. The story followed clues from reports produced by a half-dozen security firms that traced common clues between this BestBuy nickname and an alter-ego, “Spiderman.”

Both identities were connected to the sale of an espionage tool called GovRAT, which is documented to have been used in numerous cyber espionage campaigns against governments, financial institutions, defense contractors and more than 100 corporations.

That July 5 story traced a trail of digital clues left over 10 years back to Daniel Kaye, a 29-year-old man who had dual U.K. and Israeli citizenship and who was engaged to be married to a U.K. woman.

A “mind map” tracing some of the research mentioned in this post.

Last week, a 29-year-old identified by media only as “Daniel K” pleaded guilty in a German court for launching the attacks that knocked 900,000 Deutsche Telekom customers offline. Prosecutors said Daniel K sold access to his Mirai botnet as an attack-for-hire service.

The defendant reportedly told the court that the incident was the biggest mistake of his life, and that he took money in exchange for launching attacks in order to help start a new life with his fiancee.

Today, the regional court in the western city of Cologne said it would suspend the sentence of one year and eight months against Kaye, according to a report from Agence France Presse.

While it may seem that Kaye was given a pass by the German court, he is still facing criminal charges in Britain, where authorities have already requested his extradition.

As loyal readers here no doubt know, KrebsOnSecurity last year was massively attacked by the first-ever Mirai botnet — an attack which knocked this site offline for almost four days before it came back online under the protection of Google’s Project Shield service.

In January 2017, this blog published the results of a four-month investigation into who was likely responsible for not only for writing Mirai, but for leaking the source code for the malware — spawning dozens of competing Mirai botnets like the one that Kaye built. To my knowledge, no charges have yet been filed against any of the individuals named in that story.

From https://krebsonsecurity.com/2017/07/suspended-sentence-for-mirai-botmaster-daniel-kaye/

Gas Pump Skimmer Sends Card Data Via Text

Skimming devices that crooks install inside fuel station gas pumps frequently rely on an embedded Bluetooth component allowing thieves to collect stolen credit card data from the pumps wirelessly with any mobile device. The downside of this approach is that Bluetooth-based skimmers can be detected by anyone else with a mobile device. Now, investigators in the New York say they are starting to see pump skimmers that use cannibalized cell phone components to send stolen card data via text message.

Skimmers that transmit stolen card data wirelessly via GSM text messages and other mobile-based communications methods are not new; they have been present — if not prevalent — in ATM skimming devices for ages.

But this is the first instance KrebsOnSecurity is aware of in which such SMS skimmers have been found inside gas pumps, and that matches the experience of several states hardest hit by pump skimming activity.

The beauty of the GSM-based skimmer is that it can transmit stolen card data wirelessly via text message, meaning thieves can receive real-time transmissions of the card data anywhere in the world — never needing to return to the scene of the crime. That data can then be turned into counterfeit physical copies of the cards.

Here’s a look at a new skimmer pulled from compromised gas pumps at three different filling stations in New York this month. Like other pump skimmers, this device was hooked up to the pump’s internal power, allowing it to operate indefinitely without relying on batteries.

A GSM-based card skimmer found embedded in a gas pump in the northeastern United States.

A GSM-based card skimmer found embedded in a gas pump in the northeastern United States.

It may be difficult to see from the picture above, but the skimmer includes a GSM-based device with a SIM card produced by cellular operator T-Mobile. The image below shows the other side of the pump skimmer, with the SIM card visible in the upper right corner of the circuitboard:

The reverse side of this GSM-based pump skimmer shows a SIM card from T-Mobile.

The reverse side of this GSM-based pump skimmer shows a SIM card from T-Mobile.

It’s not clear what type of mobile device was used in this skimmer, and the police officer who shared these images with KrebsOnSecurity said the forensic analysis of the device was ongoing.

Here’s a close-up of the area around the SIM card:

GSMpumpskimcloseup2

The officer, who shared these photos on condition of anonymity, said this was thought to be the first time fraud investigators in New York had ever encountered a GSM-based pump skimmer.

Skimmers used at all three New York filling stations impacted by the scheme included T-Mobile SIM cards, but the investigator said analysis so far showed the cards held no other data other than the SIM’s card’s unique serial number (ICCID).

KrebsOnSecurity reached out to weights and measures officials in several states most heavily hit by pump skimming activity, including Arizona, California and Florida.

Officials in all three states said they’ve yet to find a GSM-based skimmer attached to any of their pumps.

Skimmers at the pump are most often the work of organized crime rings that traffic in everything from stolen credit and debit cards to the wholesale theft and commercial resale of fuel — in some cases from (and back to) the very fuel stations that have been compromised with the gang’s skimming devices.

Investigators say skimming gangs typically gain access to station pumps by using a handful of master keys that still open a great many pumps in use today. In a common scenario, one person will distract the station attendant as fuel thieves pull up alongside the pump in a van with doors that obscure the machine on both sides. For an in-depth look at the work on one fuel-theft gang working out of San Diego, check out this piece.

There are generally no outward signs when a pump has been compromised by a skimmer, but a study KrebsOnSecurity published last year about a surge in pump skimming activity in Arizona suggests that skimmer gangs can spot the signs of a good mark.

Fraud patterns show fuel theft gangs tend to target stations that are close to major highway arteries; those with older pumps; and those without security cameras, and/or a regular schedule for inspecting security tape placed on the pumps.

Many filling stations are upgrading their pumps to include more physical security — such as custom locks and security cameras. In addition, newer pumps can accommodate more secure chip-based payment cards that are already in use by all other G20 nations.

But these upgrades are disruptive and expensive, and some stations are taking advantage of recent moves by Visa to delay adding much-needed security improvements, such as chip-capable readers.

Until late 2016, fuel station owners in the United States had until October 1, 2017 to install chip-capable readers at their pumps. Under previous Visa rules, station owners that didn’t have chip-ready readers in place by then would have been on the hook to absorb 100 percent of the costs of fraud associated with transactions in which the customer presented a chip-based card yet was not asked or able to dip the chip (currently, card-issuing banks and consumers eat most of the fraud costs from fuel skimming).

But in December 2016, Visa delayed the requirements, saying fuel station owners would now have until October 1, 2020 to meet the liability shift deadline.

The best advice one can give to avoid pump skimmers is to frequent stations that appear to place an emphasis on physical security. More importantly, some pump skimming devices are capable of stealing debit card PINs as wellso it’s good idea to avoid paying with a debit card at the pump.

Armed with your PIN and debit card data, thieves can clone the card and pull money out of your account at an ATM. Having your checking account emptied of cash while your bank sorts out the situation can be a huge hassle and create secondary problems (bounced checks, for instance).

From https://krebsonsecurity.com/2017/07/gas-pump-skimmer-sends-card-data-via-text/

How a Citadel Trojan Developer Got Busted

A U.S. District Court judge in Atlanta last week handed a five year prison sentence to Mark Vartanyan, a Russian hacker who helped develop and sell the once infamous and widespread Citadel banking trojan. This fact has been reported by countless media outlets, but far less well known is the fascinating backstory about how Vartanyan got caught.

For several years, Citadel ruled the malware scene for criminals engaged in stealing online banking passwords and emptying bank accounts. U.S. prosecutors say Citadel infected more than 11 million computers worldwide, causing financial losses of at least a half billion dollars.

Like most complex banking trojans, Citadel was marketed and sold in secluded, underground cybercrime markets. Often the most time-consuming and costly aspect of malware sales and development is helping customers with any tech support problems they may have in using the crimeware.

In light of that, one innovation that Citadel brought to the table was to crowdsource some of this support work, easing the burden on the malware’s developers and freeing them up to spend more time improving their creations and adding new features.

Citadel users discuss the merits of including a module to remove other parasites from host PCs.

Citadel users discuss the merits of including a module to remove other parasites from host PCs.

Citadel boasted an online tech support system for customers designed to let them file bug reports, suggest and vote on new features in upcoming malware versions, and track trouble tickets that could be worked on by the malware developers and fellow Citadel users alike. Citadel customers also could use the system to chat and compare notes with fellow users of the malware.

It was this very interactive nature of Citadel’s support infrastructure that FBI agents would ultimately use to locate and identify Vartanyan, who went by the nickname “Kolypto.” The nickname of the core seller of Citadel was “Aquabox,” and the FBI was keen to identify Aquabox and any programmers he’d hired to help develop Citadel.

In June 2012, FBI agents bought several licenses of Citadel from Aquabox, and soon the agents were suggesting tweaks to the malware that they could use to their advantage. Posing as an active user of the malware, FBI agents informed the Citadel developers that that they’d discovered a security vulnerability in the Web-based interface that Citadel customers used to keep track of and collect passwords from infected systems (see screenshot below).

A screenshot of the Citadel botnet panel.

A screenshot of the Web-based Citadel botnet control panel.

Aquabox took the bait, and asked the FBI agents to upload a screen shot of the bug they’d found. As noted in this September 2015 story, the FBI agents uploaded the image to file-sharing giant Sendspace.com and then subpoenaed the logs from Sendspace to learn the Internet address of the user that later viewed and downloaded the file.

The IP address came back as the same one they had previously tied to Aquabox. The other address that accessed the file was in Ukraine and tied to Vartanyan. Prosecutors said Vartanyan’s address soon after was seen uploading to Sendspace a patched version of Citadel that supposedly fixed the vulnerability identified by the agents posing as Citadel users.

Mark Vartanyan. Source: Twitter.

Mark Vartanyan. Source: Twitter.

“In the period August 2012 to January 2013, there were in total 48 files uploaded from Marks IP to Sendspace,” reads a story in the Norwegian daily VG that KrebsOnSecurity had translated into English here (PDF). “Those files were downloaded by ‘Aquabox’ with 2 IPs (193.105.134.50 and 149.154.155.81).”

Investigators would learn that Vartanyan was a Russian citizen who’d grown up in Ukraine. At the time of his arrest, Mark was living in Norway, which later extradited him to the United States for prosecution. In March 2017, Vartanyan pleaded guilty to one count of computer fraud, and was sentenced on July 19 to five years in federal prison.

Another Citadel developer, Dimitry Belorossov (a.k.a. “Rainerfox”), was arrested and sentenced in 2015 to four years and six months in prison after pleading guilty to distributing Citadel.

Early in its heydey, some text strings were added to the Citadel Trojan which named Yours Truly as the real author of Citadel (see screenshot below). While I obviously had no involvement in writing the trojan, I have written a great deal about its core victims — mainly dozens of small businesses here in the United States who saw their bank accounts drained of hundreds of thousands or millions of dollars after a Citadel infection.

A text string inside of the Citadel trojan. Source: AhnLab

A text string inside of the Citadel trojan. Source: AhnLab

From https://krebsonsecurity.com/2017/07/how-a-citadel-trojan-developer-got-busted/

Exclusive: Dutch Cops on AlphaBay ‘Refugees’

Following today’s breaking news about U.S. and international authorities taking down the competing Dark Web drug bazaars AlphaBay and Hansa Market, KrebsOnSecurity caught up with the Dutch investigators who took over Hansa on June 20, 2017. When U.S. authorities shuttered AlphaBay on July 5, police in The Netherlands saw a massive influx of AlphaBay refugees who were unwittingly fleeing directly into the arms of investigators. What follows are snippets from an exclusive interview with Petra Haandrikman, team leader of the Dutch police unit that infiltrated Hansa.

Vendors on both AlphaBay and Hansa sold a range of black market items — most especially controlled substances like heroin. According to the U.S. Justice Department, AlphaBay alone had some 40,000 vendors who marketed a quarter-million sales listings for illegal drugs to more than 200,000 customers. The DOJ said that as of earlier this year, AlphaBay had 238 vendors selling heroin. Another 122 vendors advertised Fentanyl, an extremely potent synthetic opioid that has been linked to countless overdoses and deaths.

In our interview, Haandrikman detailed the dual challenges of simultaneously dealing with the exodus of AlphaBay users to Hansa and keeping tabs on the giant increase in new illicit drug orders that were coming in daily as a result.

The profile and feedback of a top AlphaBay vendor.

The profile and feedback of a top AlphaBay vendor.

KrebsOnSecurity (K): Talk a bit about how your team was able to seize control over Hansa.

Haandrikman (H): When we knew the FBI was working on AlphaBay, we thought ‘What’s better than if they come to us?’ The FBI wanted [the AlphaBay takedown] to look like an exit scheme [where the proprietors of a dark web marketplace suddenly abscond with everyone’s money]. And we knew a lot of vendors on AlphaBay would probably come over to Hansa when AlphaBay was closed.

K: Where was Hansa physically based?

H: We knew the Hansa servers were in Lithuania, so we sent an MLAT (mutual legal assistance treaty) request Lithuania and requested if we could proceed with our planned actions in their country. They were very willing to help us in our investigations.

K: So you made a copy of the Hansa servers?

H: We gained physical access to the machines in Lithuania, and were able to set up some clustering between the [Hansa] database servers in Lithuania and servers we were running in our country. With that, we were able to get a real time copy of the Hansa database, and then copy over the Web site code itself.

K: Did you have to take Hansa offline for a while during this process?

H: No, it didn’t really go offline. We were able to create our own copy of the site that was running on servers in the Netherlands. So there were two copies of the site running simultaneously.

The now-defunct Hansa Market.

The now-defunct Hansa Market.

K: At a press conference on this effort at the U.S. Justice Department in Washington, D.C. today, Rob Wainwright, director of the European law enforcement organization Europol, detailed how the closure of AlphaBay caused a virtual stampede of former AlphaBay buyers and sellers taking their business to Hansa Market. Tell us more about what that influx was like, and how you handled it.

H: Yes, we called them “AlphaBay refugees.” It wasn’t the technical challenge that caused problems. Because this was a police operation, we wanted to keep up with the orders to see if there were any large amounts [of drugs] being ordered to one place, [so that] we could share information with our law enforcement partners internationally.

K: How exactly did you deal with that? Were you able to somehow slow down the orders coming in?

H: We just closed registration on Hansa for new users for a few days. So there was a temporary restriction for being able to register on the site, which slowed down the orders each day to make sure that we could cope with the orders that were coming in.

K: Did anything unexpected happen as a result?

H: Some people started selling their Hansa accounts on Reddit. I read somewhere that one Hansa user sold his account for $40. The funny part about that was that sale happened about five minutes before we re-opened registration. There was a lot of frustration from ex-AlphaBay users that weren’t allowed to register on the site. But we also got defended by the Hansa community on social media, who said it was a great decision by us to educate certain AlphaBay users on Hansa etiquette, which doesn’t allow the sale of things permitted on AlphaBay and other dark markets, such as child pornography and firearms.

K: You mentioned earlier that the FBI wanted AlphaBay users to think that the reason for the closure of that marketplace was that its operators and administrators had conducted an ‘exit scam’ where they ran off with all of the Bitcoin and virtual currency that vendors and buyers had stored in their marketplace wallets temporarily. Why do you think they wanted this to look like an exit scam?

H: The idea was to hit the dark markets even harder when they think the’re just moving to another market and it turns to be law enforcement. Breaking the trust, so that [users] would not feel safe on a dark market.

K: It has been reported that just a few days ago the Hansa market administrators decided to ban the sale of Fentanyl. Were Dutch police involved in that at all?

H: It was a combination of things. One of the site’s employees or moderators started a discussion about this drug. We obviously also had our own opinion about it. It was a pretty good dialogue between us and the Hansa moderators to ban this from the site, and [that decision received] a lot of support from the community. But we didn’t instigate that discussion.

K: Have the Dutch police arrested anyone in connection with this investigation so far?

H: Yes, we identified several people in the Netherlands using the site, and there have already been several arrests made [tied to] Fentanyl.

K: Can you talk about whether your control over Hansa helped you identify users?

H: We did use some technical tricks to find out who people are, but we can’t go into that a lot because the investigation is still going on. But we did try to change the behavior [of some Hansa users] by asking for things that helped us to identify a lot of people and money.

K: What is your overall strategy in all of this?

H: Our strategy is that we want people to know that the Dark Web is not an anonymous place for criminals. Don’t think you can just buy or sell your drugs there without eventually getting caught by law enforcement. We want people to know you’re not safe on the Dark Web. Sooner or later we will come to get you.

From https://krebsonsecurity.com/2017/07/exclusive-dutch-cops-on-alphabay-refugees/

After AlphaBay’s Demise, Customers Flocked to Dark Market Run by Dutch Police

Earlier this month, news broke that authorities had seized the Dark Web marketplace AlphaBay, an online black market that peddled everything from heroin to stolen identity and credit card data. But it wasn’t until today, when the U.S. Justice Department held a press conference to detail the AlphaBay takedown that the other shoe dropped: Police in The Netherlands for the past month have been operating Hansa Market, a competing Dark Web bazaar that enjoyed a massive influx of new customers immediately after the AlphaBay takedown.

The normal home page for the dark Web market Hansa has been replaced by this message from U.S. law enforcement authorities.

The normal home page for the dark Web market Hansa has been replaced by this message from U.S. law enforcement authorities.

U.S. Attorney General Jeff Sessions called the AlphaBay closure “the largest takedown in world history,” targeting some 40,000 vendors who marketed a quarter-million listings for illegal drugs to more than 200,000 customers.

“By far, most of this activity was in illegal drugs, pouring fuel on the fire of a national drug epidemic,” Sessions said. “As of earlier this year, 122 vendors advertised Fentanyl. 238 advertised heroin. We know of several Americans who were killed by drugs on AlphaBay.”

Andrew McCabe, acting director of the FBI, said AlphaBay was roughly 10 times the size of the Silk Road, a similar dark market that was shuttered in a global law enforcement sting in October 2013.

As impressive as those stats may be, the real coup in this law enforcement operation became evident when Rob Wainwright, director of the European law enforcement organization Europol, detailed how the closure of AlphaBay caused a virtual stampede of former AlphaBay buyers and sellers taking their business to Hansa Market, which had been quietly and completely taken over by Dutch police one month earlier — on June 20.

“What this meant…was that we could identify and disrupt the regular criminal activity that was happening on Hansa Market but also sweep up all of those new users that were displaced from AlphaBay and looking for a new trading plot form for their criminal activities,” Wainwright told the media at today’s press conference, which seemed more interested in asking Attorney General Sessions about a recent verbal thrashing from President Trump.

“In fact, they flocked to Hansa in droves,” Wainwright continued. “We recorded an eight times increase in the number of human users on Hansa immediately following the takedown of AlphaBay. Since the undercover operation to take over Hansa market by the Dutch Police, usernames and passwords of thousands of buyers and sellers of illicit commodities have been identified and are the subject of follow-up investigations by Europol and our partner agencies.”

On July 5, the same day that AlphaBay went offline, authorities in Thailand arrested Alexandre Cazes — a 25-year-old Canadian citizen living in Thailand — on suspicion of being the creator and administrator of AlphaBay. He was charged with racketeering, conspiracy to distribute narcotics, conspiracy to commit identity theft and money laundering, among other alleged crimes.

Alexandre Cazes, standing in front of one of four Lamborghini sports cars he owned. Image: Hanke.io.

Alexandre Cazes, standing in front of one of four Lamborghini sports cars he owned. Image: Hanke.io.

Law enforcement authorities in the US and abroad also seized millions of dollars worth of Bitcoin and other assets allegedly belonging to Cazes, including four Lamborghini cars and three properties.

However, law enforcement officials never got a chance to extradite Cazes to the United States to face trial. Cazes, who allegedly went by the nicknames “Alpha02” and “Admin,” reportedly committed suicide while still in custody in Thailand.

This story will be updated throughout the day. In the meantime, the Justice Department has released a redacted copy of the indictment against Cazes (PDF), as well as a forfeiture complaint (PDF).

From https://krebsonsecurity.com/2017/07/after-alphabays-demise-customers-flocked-to-dark-market-run-by-dutch-police/

Trump Hotels Hit By 3rd Card Breach in 2 Years

Maybe some of you missed this amid all the breach news recently (I know I did), but Trump International Hotels Management LLC last week announced its third credit-card data breach in the past two years. I thought it might be useful to see these events plotted on a timeline, because it suggests that virtually anyone who used a credit card at a Trump property in the past two years likely has had their card data stolen and put on sale in the cybercrime underground as a result.

On May 2, 2017, KrebsOnSecurity broke the story that travel industry giant Sabre Corp. experienced a significant breach of its payment and customer data tied to bookings processed through a reservations system that serves more than 32,000 hotels and other lodging establishments. Last week, Trump International Hotels disclosed the SABRE breach impacted at least 13 Trump Hotel properties between August 2016 and March 2017. Trump Hotels said it was first notified of the breach on June 5.

A timeline of Trump Hotels’ credit card woes over the past two years. Click to enlarge.

According to Verizon‘s latest annual Data Breach Investigations Report (DBIR), malware attacks on point-of-sale systems used at front desk and hotel restaurant systems “are absolutely rampant” in the hospitality sector. Accommodation was the top industry for point-of-sale intrusions in this year’s data, with 87% of breaches within that pattern.

Other hotel chains that disclosed this past week getting hit in the Sabre breach include 11 Hard Rock properties (another chain hit by multiple card breach incidents); Four Seasons Hotels and Resorts; and at least two dozen Loews Hotels in the United States and Canada.

ANALYSIS/RANT

Given its abysmal record of failing to protect customer card data, you might think the hospitality industry would be anxious to assuage guests who may already be concerned that handing over their card at the hotel check-in desk also means consigning that card to cybercrooks (e.g. at underground carding shops like Trumps Dumps).

However, so far this year I’ve been hard-pressed to find any of the major hotel chains that accept more secure chip-based cards, which are designed to make card data stolen by point-of-sale malware and skimmers much more difficult to turn into counterfeit cards. I travel quite a bit — at least twice a month — and I have yet to experience a single U.S.-based hotel in the past year asking me to dip my chip-based card as opposed to swiping it.

A carding shop that sells stolen credit cards and invokes 45's likeness and name. No word yet on whether this cybercriminal store actually sold any cards stolen from Trump Hotel properties.

A carding shop that sells stolen credit cards and invokes 45’s likeness and name. No word yet on whether this cybercriminal store actually sold any cards stolen from Trump Hotel properties.

True, chip cards alone aren’t going to solve the whole problem. Hotels and other merchants that implement the ability to process chip cards still need to ensure the data is encrypted at every step of the transaction (known as “point-to-point” or “end-to-end” encryption). Investing in technology like tokenization — which allows merchants to store a code that represents the customer’s card data instead of the card data itself — also can help companies become less of a target.

Maybe it wouldn’t be so irksome if those of us concerned about security or annoyed enough at getting our cards replaced three or four times a year due to fraud could stay at a major hotel chain in the United States and simply pay with cash. But alas, we’re talking about an industry that essentially requires customers to pay by credit card.

Well, at least I’ll continue to accrue reward points on my credit card that I can use toward future rounds of Russian roulette with the hotel’s credit card systems.

It’s bad enough that cities and states routinely levy huge taxes on lodging establishments (the idea being the tax is disproportionately paid by people who don’t vote or live in the area); now we have the industry-wide “carder tax” conveniently added to every stay.

What’s the carder tax you ask? It’s the sense of dread and the incredulous “really?” that wells up when one watches his chip card being swiped yet again at the check-out counter.

It’s the time wasted on the phone with your bank trying to sort out whether you really made all those fraudulent purchases, and then having to enter your new card number at all those sites and services where the old one was stored. It’s that awkward moment when the waiter says in front of your date or guests that your card has been declined.

If you’re brave enough to pay for everything with a debit card (bad idea), it may be the time you spend without access to cash while your bank sorts things out. It may be the aggravation of dealing with bounced checks as a result of the fraud.

I can recall a recent stay wherein right next to the credit card machine at the hotel’s front desk was a stack of various daily newspapers, one of which had a very visible headline warning of an ongoing credit card breach at the same hotel that was getting ready to swipe my card yet again (by the way, I’m still kicking myself for not snapping a selfie right then).

After I checked out of that particular hotel, I descended to the parking garage to retrieve a rental car. The garage displayed large signs everywhere warning customers that the property was not responsible for any damage or thefts that may be inflicted on vehicles parked there. I recall thinking at the time that this same hotel probably should have been required to display a similar sign over their credit card machines (actually, they all should).

“The privacy and protection of our guests’ information is a matter we take very seriously.” This is from boilerplate text found in both the Trump Hotels and Loews Hotel statements. It sounds nice. Too bad it’s all hogwash. Once again, the timeline above speaks far more about the hospitality industry’s attitudes on credit card security than any platitudes offered in these all-too-common breach notifications.

Further reading:

Banks: Card Breach at Trump Hotel Properties
Trump Hotel Collection Confirms Card Breach
Sources: Trump Hotels Breached Again
Trump Hotels Settles Over Data Breach: To Pay $50,000 for 70,000 Stolen Cards
Breach at Sabre Corp.’s Hospitality Unit

From https://krebsonsecurity.com/2017/07/trump-hotels-hit-by-3rd-card-breach-in-2-years/