Category Archives: Dan Berger

Breach at Sonic Drive-In May Have Impacted Millions of Credit, Debit Cards

Sonic Drive-In, a fast-food chain with nearly 3,600 locations across 45 U.S. states, has acknowledged a breach affecting an unknown number of store payment systems. The ongoing breach may have led to a fire sale on millions of stolen credit and debit card accounts that are now being peddled in shadowy underground cybercrime stores, KrebsOnSecurity has learned.

sonicdrivein

The first hints of a breach at Oklahoma City-based Sonic came last week when I began hearing from sources at multiple financial institutions who noticed a recent pattern of fraudulent transactions on cards that had all previously been used at Sonic.

I directed several of these banking industry sources to have a look at a brand new batch of some five million credit and debit card accounts that were first put up for sale on Sept. 18 in a credit card theft bazaar previously featured here called Joker’s Stash:

This batch of some five million cards put up for sale Sept. 26, 2017 on the popular carding site Joker's Stash has been tied to a breach at Sonic Drive-In

This batch of some five million cards put up for sale today (Sept. 26, 2017) on the popular carding site Joker’s Stash has been tied to a breach at Sonic Drive-In. The first batch of these cards appear to have been uploaded for sale on Sept. 15.

Sure enough, two sources who agreed to purchase a handful of cards from that batch of accounts on sale at Joker’s discovered they all had been recently used at Sonic locations.

Armed with this information, I phoned Sonic, which responded within an hour that it was indeed investigating “a potential incident” at some Sonic locations.

“Our credit card processor informed us last week of unusual activity regarding credit cards used at SONIC,” reads a statement the company issued to KrebsOnSecurity. “The security of our guests’ information is very important to SONIC. We are working to understand the nature and scope of this issue, as we know how important this is to our guests. We immediately engaged third-party forensic experts and law enforcement when we heard from our processor. While law enforcement limits the information we can share, we will communicate additional information as we are able.”

Christi Woodworth, vice president of public relations at Sonic, said the investigation is still in its early stages, and the company does not yet know how many or which of its stores may be impacted.

The accounts apparently stolen from Sonic are part of a batch of cards that Joker’s Stash is calling “Firetigerrr,” and they are indexed by city, state and ZIP code. This geographic specificity allows potential buyers to purchase only cards that were stolen from Sonic customers who live near them, thus avoiding a common anti-fraud defense in which a financial institution might block out-of-state transactions from a known compromised card.

Malicious hackers typically steal credit card data from organizations that accept cards by hacking into point-of-sale systems remotely and seeding those systems with malicious software that can copy account data stored on a card’s magnetic stripe. Thieves can use that data to clone the cards and then use the counterfeits to buy high-priced merchandise from electronics stores and big box retailers.

Prices for the cards advertised in the Firetigerr batch are somewhat higher than for cards stolen in other breaches, likely because this batch is extremely fresh and unlikely to have been canceled by card-issuing banks yet.

Dumps available for sale on Joker’s Stash from the “FireTigerrr” base, which has been linked to a breach at Sonic Drive-In. Click image to enlarge.

Most of the cards range in price from $25 to $50, and the price is influenced by a number of factors, including: the type of card issued (Amex, Visa, MasterCard, etc); the card’s level (classic, standard, signature, platinum, etc.); whether the card is debit or credit; and the issuing bank.

I should note that it remains unclear whether Sonic is the only company whose customers’ cards are being sold in this particular batch of five million cards at Joker’s Stash. There are some (as yet unconfirmed) indications that perhaps Sonic customer cards are being mixed in with those stolen from other eatery brands that may be compromised by the same attackers.

The last known major card breach involving a large nationwide fast-food chain impacted more than a thousand Wendy’s locations and persisted for almost nine months after it was first disclosed here. The Wendy’s breach was extremely costly for card-issuing banks and credit unions, which were forced to continuously re-issue customer cards that kept getting re-compromised every time their customers went back to eat at another Wendy’s.

Part of the reason Wendy’s corporate offices had trouble getting a handle on the situation was that most of the breached locations were not corporate-owned but instead independently-owned franchises whose payment card systems were managed by third-party point-of-sale vendors.

According to Sonic’s Wikipedia page, roughly 90 percent of Sonic locations across America are franchised.

Dan Berger, president and CEO of the National Association of Federally Insured Credit Unions, said he’s not looking forward to the prospect of another Wendy’s-like fiasco.

“It’s going to be the financial institution that makes them whole, that pays off the charges or replaces money in the customer’s checking account, or reissues the cards, and all those costs fall back on the financial institutions,” Berger said. “These big card breaches are going to continue until there’s a national standard that holds retailers and merchants accountable.”

Financial institutions also bear some of the blame for the current state of affairs. The United States is embarrassingly the last of the G20 nations to make the shift to more secure chip-based cards, which are far more expensive and difficult for criminals to counterfeit. But many financial institutions still haven’t gotten around to replacing traditional magnetic stripe cards with chip-based cards. According to Visa, 58 percent of the more than 421 million Visa cards issued by U.S. financial institutions were chip-based as of March 2017.

Likewise, retailers that accept chip cards may present a less attractive target to hackers than those that don’t. In March 2017, Visa said the number of chip-enabled merchant locations in the country reached two million, representing 44 percent of stores that accept Visa.


Source: KrebsOnSecurity

Fast Food Chain Arby’s Acknowledges Breach

Sources at nearly a half-dozen banks and credit unions independently reached out over the past 48 hours to inquire if I’d heard anything about a data breach at Arby’s fast-food restaurants. Asked about the rumors, Arby’s told KrebsOnSecurity that it recently remediated a breach involving malicious software installed on payment card systems at hundreds of its restaurant locations nationwide.

arbys2A spokesperson for Atlanta, Ga.-based Arby’s said the company was first notified by industry partners in mid-January about a breach at some stores, but that it had not gone public about the incident at the request of the FBI.

“Arby’s Restaurant Group, Inc. (ARG) was recently provided with information that prompted it to launch an investigation of its payment card systems,” the company said in a written statement provided to KrebsOnSecurity.

“Upon learning of the incident, ARG immediately notified law enforcement and enlisted the expertise of leading security experts, including Mandiant,” their statement continued. “While the investigation is ongoing, ARG quickly took measures to contain this incident and eradicate the malware from systems at restaurants that were impacted.”

Arby’s said the breach involved malware placed on payment systems inside Arby’s corporate stores, and that Arby’s franchised restaurant locations were not impacted.

Arby’s has more than 3,330 stores in the United States, and roughly one-third of those are corporate-owned. The remaining stores are franchises. However, this distinction is likely to be lost on Arby’s customers until the company releases more information about individual restaurant locations affected by the breach.

“Although there are over 1,000 corporate Arby’s restaurants, not all of the corporate restaurants were affected,” said Christopher Fuller, Arby’s senior vice president of communications. “But this is the most important point: That we have fully contained and eradicated the malware that was on our point-of-sale systems.”

The first clues about a possible breach at the sandwich chain came in a non-public alert issued by PSCU, a service organization that serves more than 800 credit unions.

The alert sent to PSCU member banks advised that PSCU had just received very long lists of compromised card numbers from both Visa and MasterCard. The alerts stated that a breach at an unnamed retailer compromised more than 355,000 credit and debit cards issued by PCSU member banks.

“PSCU believes the alerts are associated with a large fast food restaurant chain, yet to be announced to the public,” reads the alert, which was sent only to PSCU member banks.

Arby’s declined to say how long the malware was thought to have stolen credit and debit card data from infected corporate payment systems. But the PSCU notice said the breach is estimated to have occurred between Oct. 25, 2016 and January 19, 2017.

Such a large alert from the card associations is generally a sign of a sizable nationwide breach, as this is likely just the first of many alerts Visa and MasterCard will send to card-issuing banks regarding accounts that were compromised in the intrusion. If history is any lesson, some financial institutions will respond by re-issuing thousands of customer cards, while other (likely larger) institutions will focus on managing fraud losses on the compromised cards.

The breach at Arby’s comes as many credit unions and smaller banks are still feeling the financial pain from fraud related to a similar breach at the fast food chain Wendy’s. KrebsOnSecurity broke the news of that breach in January 2016, but the company didn’t announce it had fully removed the malware from its systems until May 2016. But two months after that the company was forced to admit that many Wendy’s locations were still compromised.

B. Dan Berger, president and CEO of the National Association of Federal Credit Unions, said the number of cards that PSCU told member banks were likely exposed in this breach is roughly in line with the numbers released not long after news of the Wendy’s breach broke.

“Hundreds of thousands of cards is a big number, and with the Wendy’s breach, the alerts we were getting from Visa and MasterCard were in the six-digit ranges for sure,” Berger said. “That’s probably one of the biggest numbers I’ve heard.”

Berger said the Wendy’s breach was especially painful because the company was re-compromised after it scrubbed its payment systems of malicious software. Many banks and credit unions ended up re-issuing customer cards several times throughout last year after loyal Wendy’s customers re-compromised their brand new cards again and again because they routinely ate at multiple Wendy’s locations throughout the month.

“We had institutions that stopped approving debit and credit transactions through Wendy’s when they were still dealing with that breach,” Berger said. “Our member credit unions were eating the costs of fraud on compromised cards, and on top of that having to re-issue the same cards over and over.”

Point-of-sale malware has driven most of the major retail industry credit card breaches over the past two years, including intrusions at Target and Home Depot, as well as breaches at a slew of point-of-sale vendors. The malware sometimes is installed via hacked remote administration tools like LogMeIn; in other cases the malware is relayed via “spear-phishing” attacks that target company employees. Once the attackers have their malware loaded onto the point-of-sale devices, they can remotely capture data from each card swiped at that cash register.

Thieves can then sell that data to crooks who specialize in encoding the stolen data onto any card with a magnetic stripe, and using the cards to purchase high-priced electronics and gift cards from big-box stores like Target and Best Buy.

Readers should remember that they’re not liable for fraudulent charges on their credit or debit cards, but they still have to report the unauthorized transactions. There is no substitute for keeping a close eye on your card statements. Also, consider using credit cards instead of debit cards; having your checking account emptied of cash while your bank sorts out the situation can be a hassle and lead to secondary problems (bounced checks, for instance).


Source: KrebsOnSecurity