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The Wall Street Journal is reporting that the TJX break-in started in July 2005 with a wireless hack of a Marshalls in St. Paul, Minn, where the thieves "pointed a telescope-shaped antenna toward the store and used a laptop computer to decode data streaming through the air between hand-held price-checking devices, cash registers [POS presumably]and the store's computers. That helped them hack into the central database of Marshalls' parent, TJX Cos. in Framingham, Mass., to repeatedly purloin information about customers." The news that the attack was wireless is not unexpected, as wireless attacks have become very popular means of attacking retail chains and because hints that the TJX attacks were wirelessly based have been frequent. But the level of specifics in the Journal story are surprising. The story also said that an auditor found that TJX "failed to install firewalls and data encryption on many of its computers using the wireless network, and didn't properly install another layer of security software it had bought." That software could very well have been encryption software from Ingrian Networks. We have reported that Ingrian had sold software to TJX, which hadn't installed it at the time the data breach was discovered. One PCI auditor who has been involved in the TJX probe couldn't confirm all of the details in the Journal but said that a wireless hack is not surprising, as it's the most common attack method with retail chains today. "By focusing on those little handheld (pricecheck) guns and their interactions with the database controller, you can capture IP addresses. That's your gateway," the auditor told StorefrontBacktalk. [Note to readers: We typically resist referring to ourselves in text, but it's necessary here to differentiate what our sources told us from what the Journal is quoting sources as telling them.] Even if a store IT manager is watching the traffic, the source said, it often won't even look suspicious. "They won't see any difference between you and one of their handheld devices." The Journal also reported that the attackers performed "most of their break-ins during peak sales periods to capture lots of data" and then "used that data to crack the encryption code" and then they "digitally eavesdropped on employees logging into TJX's central database in Framingham and stole one or more user names and passwords. With that information, they set up their own accounts in the TJX system and collected transaction data including credit-card numbers into about 100 large files for their own access. They were able to go into the TJX system remotely from any computer on the Internet," according to sources who spoke with the Journal. "They were so confident of being undetected that they left encrypted messages to each other on the company's network, to tell one another which files had already been copied and avoid duplicating work." The Journal also referenced a Sept. 29 audit report that it wasn't PCI compliance. " The auditor's report cited the outmoded WEP encryption and missing software patches and firewalls. Then on Dec. 18, another auditor found anomalies in the company's card data. At that point, TJX hired forensics experts from International Business Machines Corp. and General Dynamics Corp. and notified the U.S. Secret Service, which spent a month trying to catch the hackers in the act. But the data thefts stopped and the hackers had obscured their whereabouts by using the Internet addresses of private individuals and public places such as coffee houses. Investigators did find traces of the hackers: altered computer files, suspicious software and some mixed-up data such as time stamps in the wrong order."
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Over the last month, I've been struck by an unusually large number of reader E-mails that fundamentally question whether E-Commerce will ever truly work: Whether it will consistently make money, be profitable and be, well, worth all of the effort.
If the slip of a lip can sink a ship, perhaps a retailer's flick of the click can kill a prestigious campaign mighty quick. The best way for a retail chain to make a customer happy is to offer him/her a program that few others can get. And the best way to undermine that—as Best Buy discovered on Wed. (Sept. 3)—is to then accidentally make that offer to every single reward customer you have.
It looks like Amazon is no longer backing up its pricing, putting an end to its Post-Order Price Guarantee — a policy that allowed customers to recover the difference from an Amazon price drop within 30 days of a purchase. As of Monday (Sept. 1), customers who place orders on Amazon.com are not offered the 30-day guarantee, a customer service representative confirmed.
Security is nothing if not filled with seeming contradictions, and the latest version of PCI—slated to be officially unveiled next month (October)—is highlighting a beauty: To most effectively protect payment-card-related systems, protection must be focused on anything that is not related to payment card data.
Quite a few retailers have been involved in site changes to make the Web more accessible to those with vision difficulties, but Target has been the most aggressive in fighting such efforts. As such, Target's settlement has an especially strong chance of pressuring retailers to aggressively embrace such changes.
Wal-Mart on Wednesday (Sept. 3) launched what it dubbed the Walmart Smart Network—a series of next-generation digital-ad systems—to 2,700 stores. The funky aspect of this rollout is that all 27,000 screens will be centrally controlled via an Internet Protocol Television connection.
Site navigation problems and unpleasant booking engines are driving customers away from online travel sites and pushing them through the doors of traditional, more personable travel agencies. Even though sales for online travel sites are growing, fewer travelers are actually booking their trips online.
A TJX senior executive is apparently trying to push chip-and-PIN, arguing that cyberthieves are focused on the United States partly because we haven't adopted it. "Criminals, I believe, are focusing on the countries that haven't added that higher level of security," TJX Vice Chairman Donald G. Campbell said.
Calvin Klein finally gave its HTML blessing to E-Commerce, offering its first for-sale items on its Web site, although the E-Commerce launch is U.S.-only. Anyone visiting from outside the United States will be routed to the existing corporate brochure site.
It seems clear that most retailers are adopting one of two distinctly different strategies when it comes to data security and compliance. Let's label them Cost-Effective Compliance (CEC) and Compliance-Driven Security (CDS). Both approaches are based on best practices and solid risk management principles. But, GuestView Columnist David Taylor argues, they lead to quite different spending patterns, technology decisions and business cultures.
A retail IT lesson from the world of politics? Maybe. Web tracking firm Keynote was studied the text message blast sent by the U.S. presidential campaign of Barack Obama, the one in which his campaign promised to tell supporters his VP selection before it was broadly announced.
Has Amazon decided what it wants to be when it grows up? More to the point, are there indications that it has now decided that one thing it does not want to be is yet another thin-margined retailer?
The IT chief at Netflix has pointed the finger of blame for its site problems last month at "a database corruption event in our shipping system." The problem prevented customers from receiving their DVDs for about three days.
Almost a year after TJX settled with banks and bank associations impacted by the worst data breach in credit card history, another bank has come forward with its own lawsuit against the retailer, claiming the incident compromised some 4,000 of its customer accounts.
The number of data breaches reported as of Aug. 22 of this year has already surpassed the total number in all of 2007, including a new one from Macy's impacting some 4,100 customers.
On the best-paid list of CIOs at publicly held companies, Best Buy's Bob Willett ($4.7 million), Home Depot's Bob DeRodes ($4.3 million) and Kohl's Thomas Kingsbury ($2.5 million) stand at the top, doing the pocket-protector crowd proud.
With the frequent product changes executed by any large e-tailer's site, the tech hurdles of launching a mirror site in another language can be daunting. But this challenge has created a small industry of companies that are trying to facilitate rapid globalization for e-tailers.
JCPenney is testing the Australian waters a bit with an online push. The retailer has a local URL and an Australian company handling all operations, but it's still shipping merchandise from the States and asking Australian shoppers to wait "12 to 14 working days. This "request" prompted one Australian publication to ask "whether Australians would be prepared to wait two weeks to receive something purchased online."
In an overall down market where the 150-store Nordstrom chain is seeing a 4.3 percent sales drop, online operations are accounting for 15 percent, hitting almost 8 percent of all sales. Company execs there now project online to soon top 10 percent.
The new version of PCI due out in October will let the outdated WEP wireless security standard stick around for almost two more years, while also reducing the required frequency of firewall rule reviews.
It's late on a Friday night and as Jane Smith walks into her local grocery frozen food aisle, she notices a neighbor walking away carrying a frozen pizza, right near a digital advertisement for 20 percent off of a Budweiser six-pack. Jane reaches into the freezer to grab her favorite Häagen-Dazs vanilla ice cream but notices that the digital ad instantly changes to hawk 40 percent off fresh apple pie in the bakery section.
It's generally accepted that any key economic issue—whether it's a housing slump, rising gas prices or tax refund checks—can have a sharp impact on business spending. But the IHL Group is floating an interesting theory that recent gas price hikes are going to have a very specific and direct impact on IT spending next year.
After years of trials with only the rarest evidence of CFO-friendly RFID ROI, shelf stock monitoring is quickly emerging as "the first major application of RFID in retail with a strong business case," according to a new report from London-based RFID analyst firm IDTechEx.
While North American retail execs are planning for trivial—if any—IT investment increases this year, with "more than one-quarter of retailers expecting lower IT spending," more than half of their Asian Pacific counterparts are preparing for significantly higher IT spending, according to new Forrester numbers released this week. A bit of the Tortoise and the Hare perhaps?
A gang of data thieves in Ireland has well learned the lesson that the best place to hide is in plain sight. The group hit a large number of retailers throughout Ireland and grabbed more than 20,000 payment cards by placing skimmers on card-swipes by wearing what appeared to be maintenance uniforms and saying that they were performing bank repairs.
These days, when U.S. government officials want to ask questions about privacy and data security, it's never clear if they want to protect consumers' privacy or learn the best way to violate it themselves. But retail execs who want hints can drop by a Sept. 22 hearing at the U.S. Federal Trade Commission's Washington, D.C., headquarters.
Retailers who are worried about RFID security problems will have more details available to them now that a federal judge has killed a gag order on MIT students who had identified flaws in Boston's contactless RFID subway cards.
Based on the PCI Standards Committee's official hints about what will be in the 1.2 release, it appears that clarifying when and how virtualized servers can be PCI compliant didn't make the cut. But before the server and security geeks start lighting their torches and getting all "vigilante" on the card brands, let GuestView Columnist David Taylor make his case for why it won't matter in the slightest.
As major chains are doubling up their focus on computer-savvy young consumers, some are finding their aversion to avatars giving in to their adoration of avarice.
A "persistent and mysterious technical glitch" has severely disrupted business operations at the massive online film rental site Netflix, "potentially affecting millions of its customers."
