A hack attack against an Irish loyalty programme firm, Loyaltybuild, has led to the theft of the full credit card details of at least 376,000 consumers, says the country's data protection watchdog.
According to the results of a preliminary investigation by the Office of the Data Protection Commissioner (ODPC), credit card and – contrary to all payment storage rules - CVV details were held unencrypted on Loyaltybuild's systems in the run-up to attacks in the middle of October.
CVV - Card Verification Value - numbers are the three-digit security code found on the back of a credit or debit card, used to prove that a customer making an online purchase has physical possession of the card. They are an important anti-fraud measure.
The ODPC said it had also found that the personal details of a further one million people had been swiped. It is not known why the loyalty card scheme was retaining customers' credit card payment data.
The inspection team confirmed the extent of the breach in which the full card details of over 376,000 customers were taken of which over 70,000 were Supervalu Getaway customers and over 8,000 were AXA Leisure Break customers. The details of an additional 150,000 clients were potentially compromised. The inspection team also confirmed that name, address, phone number and email address of 1.12 million clients were also taken. The initial indications are that these breaches were an external criminal act.
A follow-up statement by the ODPC indicates that the Loyaltybuild breach, already worse than first feared, took place in mid-October and may affect the customers of Loyaltybuild's clients elsewhere in Europe.
Loyaltybuild acknowledged the breach, which it blamed on a "sophisticated criminal attack". It said that it had informed both its clients and Irish police (Gardaí). For its part, Loyaltybuild apologised for any "distress or inconvenience" caused by the breach and said it was "working around the clock with our security experts to get to the bottom of this and to further enhance our security in order to protect our valued customers". The firm has also drafted in external data forensics experts.
SuperValu and AXA have suspended their respective schemes in the wake of the breach, RTE reports. Loyaltybuild runs special offers and loyalty schemes for retailers and service providers in the UK, Scandinavia and Switzerland. Many of the schemes offered through its service involve heavily discounted holiday breaks or hotel stays.
Getaway Breaks customers and those who signed up to a hotel promotion with Stena Line are among those affected by the breach.
Data Protection Commissioner Billy Hawkes told the Irish Times that Loyaltybuild had stored financial information in unencrypted form, along with the three-digit security code printed on customers’ credit and debit cards. We put this specific accusation to Loyaltybuild but have yet to hear back from the firm.
Consumers are advised to examine card transactions since mid-October for unauthorised purchases as well as being extra-vigilant about the possibility of more than usually plausible phishing attacks that take advantage of the leaked personal information.
Two Irish banks – AIB and Permanent TSB – told RTE that they had already uncovered evidence of possible card fraud linked to the Loyaltybuild breach, reportedly the largest compromise of its type to hit the Emerald Isle.
Tom Davison, technical director at firewall and security appliance firm Check Point, commented: "This breach is far more extensive than originally thought, with details of over a million customers exposed. People need to check their credit card statements, and be very cautious about clicking on links in emails which claim to be from LoyaltyBuild or its affiliates, no matter how authentic they seem to be. There’s a very real risk that attackers will use the details exposed in the attack to send phishing emails to users, to try to harvest more sensitive data," he added.
Other security firms criticised Loyaltybuild for failing to follow industry best practice.
“It’s unclear why Loyaltybuild stored the compromised credit card information in the first place,” said Gene Meltser, technical director for Neohapsis Labs, the research arm of mobile and cloud security services firm Neohapsis. “In general, loyalty based programs function by rewarding users for specific purchasing activity, and to do that, loyalty rewards programmes only need to correlate a member’s account information, such asa name, to purchasing activity records related to the reward in question."
"In an overwhelming majority of cases, it is unnecessary to store detailed credit card data, and in absolutely all cases it is prohibited to store the 3- or 4-digit codes, or CVV values, off the credit card. To store this data unencrypted would not only be fundamentally prohibited under PCI-DSS requirements, but also demonstrating considerable negligence in protecting customer and payment data,” he added. ®