Seattle: Capitol Hill credit card fraud wave tied to Broadway Grill

The investigation into more than 100 reported cases of credit card fraud across Capitol Hill has identified a Broadway restaurant as one "point of interest." Like the victims who have had their bank and credit accounts hit for fraudulent charges in the thousands of dollars, Capitol Hill's Broadway Grill is also a victim in this wave as personal and business accounts related to the restaurant have been compromised along with accounts of a not-yet-known number of customers who ate and drank at the popular eatery.

We received the following statement from one of the partners behind the Broadway Grill, Matthew Walsh:

We take this issue very seriously and are working with both the Seattle Police Department as well as the Secret Service to find the people who have done this to everyone and have them stopped.

We have gone above and beyond to make sure that our network is completely secure and that this sort of thing can't happen to any of our customers, there has been no decline in credit/debit card use because of our actions to ensure safety. Not only were our personal accounts compromised but our business savings and operating accounts have also been compromised.

We are a tiny little company trying to manage this huge monster of a restaurant and for someone to swoop in and try to completely wipe our accounts is a really scary thing. I am seriously worried about the future of our business without the support of our community. We have been growing by leaps and bounds since I took over in June, not only in our new menu and food quality but also in our day to day operation. It is my hope that we have touched enough lives over the years to be able to count on our beloved customers for their support and continued patronage in this difficult time.

We do not know yet if Broadway Grill represents the only breached business on the Hill or if investigators have identified others in the area. On Monday, CHS reported that the Secret Service's Electronic Crimes Task Force had identified and "reduced" the threat from what the lead agent called a "point of interest" in the Capitol Hill area.

We have checked with Kroger, the parent company for QFC, about any involvement in the investigation. A QFC spokesperson told CHS he ws not aware of any contact between investigators and either of the Broadway stores. "To my knowledge, we have not been contacted by police. When we are, we will work with them," the spokesperson said earlier this week.

Meanwhile, the situation is widespread enough and people are so wary that large area institutions are dealing with relatively sizable numbers of victims. We talked to Seattle University about a a growing number of Seattle University students and employees who have experience problems with financial accounts in recent days. But Mike Sletten director of public safety for the campus, told us that the cases he is aware of all appear to be part of the Capitol Hill wave. "They all reflect that Capitol Hill theme," Sletten said.

PCI-Compliant Stores a Minority

Companies cite encryption, security-event logging, and data in transit issues as the most challenging compliance elements.

A new survey revealed that less than 50 percent of businesses that process 20,000 or more credit or debit card purchase transactions a year are compliant with the Payment Card Industry Data Security Standards, American Banker reports.

Computerworld Inc., a Massachusetts provider of technology information, surveyed 123 businesses on behalf of nuBridges Inc., a company that provides data security products, and 57% of respondents reporting that they had a PCI initiative in place, yet only 37 percent of those were PCI compliant. Twenty-eight percent of respondents said that they were planning a PCI strategy while a remarkable 15 percent indicated that they had no plans to address PCI compliance.

Respondents said that the most difficult compliance component is encryption (cited by 41 percent of respondents), followed by security-event logging (40%) and data in transit (38%).  NACS

Lessons Learned From PCI Compliance

Assessors reveal mistakes companies make with data security standard.
Whether you think PCI is a useful standard that makes our credit card data safer or a credit card industry whitewash that merely creates the illusion of security, PCI compliance is a fact of life.

As part of PCI compliance, companies that process a high volume of credit card transactions must submit to an annual assessment by a qualified security assessor, or QSA. For example, Visa requires it of merchants that process 6 million or more transactions. Assessors work for third-party organizations and generally visit companies to examine their processes and determine whether they comply with PCI rules.

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Forbes CIO Mykolas Rambus talks about managing cost cutting, the changing role of the CIO, building leadership within, and his company's high priority on mining intelligence from vast amounts of data.

To help companies get ready for a an evaluation, we asked QSAs to describe common problems they encounter when working with IT groups on PCI compliance. What follows are five best practices to help companies better prepare for an assessment and maintain compliance. Information Week

PCI Compliance: A Moment In Time

When it comes to PCI compliance, merchants and software vendors alike often make the mistake of viewing their compliance as a "checklist" rather than an ongoing process. Too many people assume that PCI compliance is achieved once. In reality, however, it is maintained, through vigilant adaptation to both PCI requirements and evolving security threats.

A closer look at PCI DSS requirements should make it quite clear that compliance is an ongoing exercise. For example, requirement 1 reads, "Install and maintain a firewall configuration to protect cardholder data." Requirement 5 mandates that you "Use and regularly update anti-virus software." Requirement 6 states that you "Develop and maintain secure systems and applications." Requirement 11 implores that you "Regularly test security systems and processes." And, of course, Requirement 12 states that you must "Maintain a policy that addresses information security."

Clearly, five of the twelve PCI requirements explicitly mention either maintaining or updating, which should make it clear to all paying attention that there is no finality to PCI compliance. Business Solutions

Analyst: PCI Security a Devil, 'Like No Child Left Behind'

BOSTON -- By obsessing about PCI security compliance and spending money on overly complex and underperforming defenses, companies are ignoring risk management and making themselves a target of state-sponsored cyber villains.

That was one of the main messages delivered by Joshua Corman, research director for enterprise security at The 451 Group, during that firm's 4th Annual Client Performance Conference Wednesday morning.

"Organizations have made PCI DSS and compliance in general the basis of their information security policies," he said. "They're basing security on sloppy logic from Visa and MasterCard and in the process are ignoring some very bad state-sponsored threats. As a community, we have not evolved at all."

He compared PCI DSS to No Child Left Behind, the education reform law championed by former President George W. Bush. The law has been criticized by some who believe it has stifled innovation in education and focused too much on standardized testing. CSO Online

Why Most PCI Self-Assessments Are Wrong

Another fantastic article I found in the archives of Even Shcuman's StorefrontBackTalk on PCI compliance written by David Taylor... it gives me the willies!

Written by David Taylor

The reason that so many PCI self-assessments are wrong is that they focus on the mainstream business processes of the company. They often ignore a lot of “back-channel” or “just-in-case” practices that result in card data coming into the company not protected by the various PCI and other data security measures to protect more mainstream applications, data repositories and processes.

Here are 3 examples, all of which come from personal experience:  StoreFrontBackTalk

Some PCI Compliance Facts

What is PCI DSS? The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements designed to ensure that ALL companies that process, store or transmit credit card information maintain a secure environment. Essentially any merchant that has a Merchant ID (MID). It is important to note, the payment brands and acquirers are responsible for enforcing compliance, not the PCI council.

To whom does PCI apply? PCI applies to ALL organizations or merchants, regardless of size or number of transactions, that accepts, transmits or stores any cardholder data (including non profits).

PCI compliance deadline? All merchants that store, processes or transmit cardholder data must be compliant now.

What are the PCI compliance ‘levels’? All merchants will fall into one of the four merchant levels based on Visa transaction volume over a 12-month period.

Merchant Level Description

1 Any merchant -- regardless of acceptance channel -- processing over 6M Visa transactions per year. Any merchant that Visa, at its sole discretion, determines should meet the Level 1 merchant requirements to minimize risk to the Visa system.

2 Any merchant -- regardless of acceptance channel -- processing 1M to 6M Visa transactions per year.

3 Any merchant processing 20,000 to 1M Visa e-commerce transactions per year.

4 Any merchant processing fewer than 20,000 Visa e-commerce transactions per year, and all other merchants -- regardless of acceptance channel -- processing up to 1M Visa transactions per year.


Level 4 merchant: You will have to refer to your merchant bank for their specific validation requirements and deadlines. All deadline enforcement will come from your merchant bank



Does PCI apply if I only accept credit cards over the phone? Yes. All business that store, process or transmit payment cardholder data must be PCI Compliant.

I’m in Canada do I have to worry about it? Canada’s deadline has come and gone. Both Canadian and UK merchants are required to be PCI compliant.

Is PCI compliance expensive? No, but non-compliance can be catastrophic. Non-compliance doesn’t just result in lofty fines, credit card replacement and audit fees. Consider the loss of business reputation and revenue.

70% of the cost of non-compliance was due to the loss of revenue!


What are the PCI Compliance Fines?

• $3 to $10 per card for replacement costs
• $5,000 to $50,000 (or more) in compliance fines
• The payment brands may, at their discretion, fine an acquiring bank $5,000 to $100,000 per month for PCI compliance violations. The banks then pass the fines down to the merchant. The bank is likely to either terminate your business relationship or increase your transaction fees.

The average cost of a data breach for a Level 4 merchant averages $36,000 and can be as high as $50,000 (or more) for failure to meet PCI compliance.

Debit Or Credit? Neither

I stopped using my debit card altogether a couple of years ago out of an intense fear that I would never recoup the losses if my card was skimmed in the grocery-store line or compromised at TJ Maxx.

Now I casually slide my checkbook onto the card reader stand and perform that rare act of putting pen to paper while trying to avoid the annoyed stares of shoppers behind me in line who may lose a few seconds off their shopping time because I didn't use plastic.

But my check apparently isn't any safer. The Ponemon-Imperva study on PCI compliance report

released this week found that 55 percent of retailers and organizations who take credit cards don't bother securing their customers' Social Security numbers, driver's license numbers, and bank account details. And 79 percent of retailers surveyed had suffered at least one data breach.

Those aren't great odds.

Sure, even if you swipe your credit card at a retailer that's PCI-compliant, there's no guarantee your credit card won't get breached anyway. But more worrisome is the attitude of many of the retailers in the survey: most look at PCI as more of a "check-box" item than part of a strategic security initiative. If they're playing to the auditors, who's really minding the store and its customer data?

Then there are the opportunistic retailers. These companies are using PCI to parlay some other IT security purchases that they may not previously have had the funds for: "There's almost a dark side to this: they're putting things in the PCI basket that are really not PCI-critical and leveraging PCI for other security projects," says Brian Contos, chief security strategist at Imperva.

Dark Reading

PCI Survey Finds Some Merchants Don't Use Antivirus Software

Consumers face a greater risk of losing control of their data when doing business with smaller retailers, as many haven't made investments to comply with the Payment Card Industry's Data Security Standard (PCI DSS), according to a new survey.

The survey, which covered 560 U.S. and multinational organizations, asked respondents a variety of questions about their investments and deployment of technology to comply with PCI DSS, which was introduced in 2005. It's an industry standard created by major credit card companies that's designed to protect customer payment data.

The survey found that 55 percent of organizations only secured credit card information but not other data such as Social Security and driver's license numbers or bank account details. Also, only 28 percent of smaller companies between 501 to 1,000 employees comply with PCI DSS. That compares with more than 70 percent of large merchants with 75,000 or more employees that claimed they're compliant.

"If you go the larger organizations to do business, you are more likely to be secure today," said Amichai Shulman, CTO for Imperva, which makes security software for businesses to comply with PCI DSS. Imperva commissioned the survey from Ponemon Institute, a company that conducts research into privacy and information security policy.

The prime reason that companies don't comply with PCI DSS is cost, Shulman said. "They don't go to the effort to be compliant because it's all or nothing, so they currently do nothing," Shulman said.

Larger companies find it somewhat easier to handle the costs, he said. On average, companies spend about 35 percent of their IT security budgets on PCI DSS compliance.

Payment card companies mandate compliance, and most merchants are supposed to be compliant by now, according to information on the PCI Security Standards Council's Web site.

The survey turned up some other disconcerting results. Around 10 percent of the respondents who said they were PCI DSS compliant said they weren't using basic security software such as antivirus, firewalls and SSL (Secure Sockets Layers), Shulman said.

PCI doesn't prescribe the use of specific software products but instead promotes practices and general advice, such as using a firewall and antivirus. In recent years, vendors have developed products to make the implementation of PCI DSS easier. Still, the result was surprising and indicative of perhaps continuing confusion or difficulty some businesses are having with PCI DSS.

"I would find it very hard to explain why I'm not using SSL as part of my PCI compliance," Shulman said. "It seems to me that there is too much room for misinterpretation of the requirement, and companies are abusing it."

PCI DSS is in the process of being updated, and the survey will be used as input. The PCI Security Standards Council, which was set up by major credit card companies in 2006, is collecting feedback through Oct. 31 on changes to a new version of the standard, due for release in September 2010.
PC World