Stolen Records, Data Prices Decline

The number of compromised electronic records fell sharply last year, according to a report scheduled to be released by Verizon Business on Wednesday, with the cooperation of the U.S. Secret Service.

Bryan Sartin, director of investigative response for Verizon Business, said in a phone interview that the number of electronic records compromised through data breaches (over 143 million records) in 2009 was about half what it was in 2008 (285 million).

Verizon's report attributes some of the decline to law enforcement success, such as the 2008 arrest of Alberto Gonzales, who participated in some of the largest breaches known, including incidents affecting TJX Corporation and Heartland Payment Systems.

But the report also says that the decline is a function of market saturation. There was so much stolen data floating around in 2008 that supply outstripped demand.

"The information black market is only so big," said Sartin. "There are only so many crooks out there. So much data leaked out that basic supply and demand kicked in and the value of that data dropped."

Sartin said the average price per record had gone from $9-$14 a few years ago to $0.10-$0.20 today.

However, as the Secret Service notes in the report, data prices are highly variable, depending upon quality, freshness, quantity and completeness. The Secret Service says stolen data may sell for $1 for "cvv2s" -- credit card number, expiration date, name, address, and CVV2 code on the back of the card -- to $15 or more for "dumps" -- the electronic data on a credit card's magnetic stripe -- of high-quality cards.

Regardless of price, data breaches continue to bedevil companies and consumers.

One of the more startling findings is that none of the 141 breaches from 2009 investigated by either Verizon (57) or the U.S. Secret Service (84) involved a patchable vulnerability.

"Verzion and the Secret Service have no credible of evidence of patchable vulnerabilities being exploited," said Sartin.

Instead, the breaches tended to be attributable to easily fixed problems that should have been spotted. Specifically, 85% of attacks were not considered to be highly difficult, 86% of victims had evidence of the breach in their log files, and 96% of breaches were avoidable through simple or intermediate controls.

"There's no obvious evidence that ingenuity and sophistication are increasing in attacks," said Sartin.

It turns out that misuse of privileges represents a more common threat vector than hacking or malware, albeit one that doesn't tend to lead to the loss of a large number of records.

What this suggests is that a lot of security money is misspent. Sartin said it is common for companies that get victimized to buy new technology when they really should be working with their employees to use the technology they already have but aren't fully utilizing.

Some other key findings: Most breaches (60%) are discovered by outsiders after a long period of time; organized criminal groups were behind 85% of the data stolen in 2009; and insiders went from being an exaggerated threat to a meaningful one, but mainly in cases of collusion with external attackers.

The full report should be posted on the Verizon Business Web site.