51 UPS Stores' Point-of-Sale Systems Breached

UPDATED Aug. 22: United Parcel Service (UPS) confirmed Wednesday that point-of-sale systems at 51 of its 4,470 franchise stores were breached, resulting in the theft of credit card data involved in approximately 105,000 transactions. "Each franchised center location is individually owned and runs independent private networks that are not connected to other franchised center locations," according to UPS, in a statement.

Although UPS knows the number of transactions, it does not have all the information about the cardholders, and therefore will not be issuing individual breach notifications. Customers can check UPS.com for a list of affected stores.

July 31 the company investigated its networks after the Secret Service and Department of Homeland Security issued a report about threats in remote access software. This investigation led to the discovery that the systems were infected with Backoff, a malware family that goes after PoS systems and has made life difficult for many retailers. They believe the malware infection may have begun on January 20 -- but not until March 26 in most stores -- and was fully eradicated by August 11.

U.S. CERT released a new advisory about Backoff that follows up on a detailed advisory they released July 31.

“This type of malware has been successfully used in some of the biggest retail credit card breaches the security industry has seen, says Ken Westin, security analyst for Tripwire. "This family of point-of-sale malware goes as far back as October 2013; it relies on scraping unencrypted credit card data from the memory of infected devices, much like previously seen malware. The malware itself is sophisticated, but the method of intrusion is not. Attackers use publicly available scanning tools to detect point-of-sale systems running remote desktop applications; then they rely on application vulnerabilities or brute forcing to gain access to systems where they installing the malware.”

The UPS breach is simply the newest in a string of big retail breaches like those at Target and P.F. Chang's.

"How many more point-of-sale breaches need to occur industry-wide before consumers rise up and start demanding proactive protection surrounding their personal information prior to the purchasing of goods and services from a company?" says Kyle Kennedy, CTO of STEALTHbits Technologies. "Is it time for a third-party service provider focused solely on financial transactions and securing the consumer’s personal information the answer for the consumer and the retailer? Or is the risk of personal information potentially being breached so accepted by consumers that change isn’t possible?"

"As UPS basically admits that the attackers were in their systems, undetected for 4 to 8 months," says Aviv Raff, CTO and chief researcher of Seculert, "it shows the necessity of enterprises to start using security tools that are able to detect attacks not just in real time... but more importantly, over time" by analyzing historical and ongoing traffic logs.

The information that may have been exposed includes names, postal addresses, email addresses, and payment card information. Thus far UPS Store has no evidence of fraud arising from the incident, but it is offering credit monitoring and identity protection services to customers who might have been affected.