News
News
4/29/2005
04:16 PM
Connect Directly
RSS
E-Mail
50%
50%

Data Losses Blamed On Stores And Software

Poor security practices and software flaws may leave data open to theft or loss

The recent disclosures that customer information was lost or stolen from retailers have led security experts to focus on two areas: poor security practices by the retailers and weaknesses in the software used to process credit-card payments.

Retail Ventures Inc. and Polo Ralph Lauren Corp. are the latest in a string of companies to report that customer credit-card information may have been stolen or lost. But a lawsuit involving IBM has highlighted the importance of what's known as Track II data, which contains customer and account information.

BJ's Wholesale Club sued IBM last year for allegedly failing to turn off a feature in its payment software that stored Track II data from a credit card's magnetic stripe after a transaction was approved. As a result, BJ's claims, Track II data on cards belonging to customers who made transactions between July 2003 and February 2004 may have been stolen and misused. A BJ's spokeswoman declined to comment, saying the case is pending.

Storage and retention of Track II data is expressly forbidden by Visa. "Track II data should never be stored," says Bill Pittman, president of TPI Software LLC, one of seven payment-software vendors whose applications have been validated by Visa.

Another of the companies, Radiant Systems Inc., modified its apps to delete Track II data, says Andy Heyman, president of Radiant's hospitality division. It has added 128-bit encryption to safeguard all other information.

All merchants are required to comply with credit-card company security rules. But some, known as level-four merchants, aren't required to validate their compliance. "Some of the recent breaches have occurred at level-four merchants," says Mike Petitti, senior VP of marketing at Ambiron TrustWave, which provides security assessments. "There's a need to address those risks."

Comment  | 
Print  | 
More Insights
The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - July 22, 2014
Sophisticated attacks demand real-time risk management and continuous monitoring. Here's how federal agencies are meeting that challenge.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A UBM Tech Radio episode on the changing economics of Flash storage used in data tiering -- sponsored by Dell.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.