target data breach case study ppt

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Cyber Breach at Target

• Format: Print
• | Language: English
• | Pages: 32

About The Authors

Suraj Srinivasan

Lynn S. Paine

Related work.

• February 2018
• Faculty Research
• Cyber Breach at Target  By: Suraj Srinivasan and Lynn Paine
• Cyber Breach at Target  By: Suraj Srinivasan, Lynn S. Paine and Neeraj Goyal

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Autopsy of a Data Breach: The Target Case

By: Line Dube

This case revisits the events in late 2013 that gave rise to what was at the time the largest breach of confidential data in history. Indeed, on December 19, 2013, Target announced that its computer…

• Length: 8 page(s)
• Publication Date: Mar 1, 2016
• Discipline: Information Technology
• Product #: HEC130-PDF-ENG

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This case revisits the events in late 2013 that gave rise to what was at the time the largest breach of confidential data in history. Indeed, on December 19, 2013, Target announced that its computer network had been infiltrated by cybercriminals who stole 40 million debit and credit card numbers as well as the personal information of some 70 million additional customers. The case presents the cybercriminals' activities leading up to the breach, details of the commission of the theft, the measures that Target had put in place to deter such attacks, its ill-fated response during the attack and, finally, the impact of the breach on Target as well as on the retail industry as a whole.

Learning Objectives

The case allows students to: - familiarize themselves with the basic vocabulary related to information security; - understand how threats can materialize, resulting in a major data breach (approaches and actors); - identify the vulnerabilities of a business (by analyzing and understanding the different sources of risk); - become aware of the fact that humans continue to be the weak link in the chain of information security; - understand the principal control measures a business can deploy to protect itself; - identify and understand the specific issues raised by information security, notably in a digital business environment.

Mar 1, 2016

Discipline:

Information Technology

Geographies:

United States

Industries:

Retail trade

HEC Montreal Centre for Case Studies

HEC130-PDF-ENG

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Anatomy of the Target data breach: Missed opportunities and lessons learned

Target's infamous data breach happened just over a year ago. Are we any the wiser? Have lessons been learned? Although not every detail has been made public, experts have developed an unofficial attack timeline that exposes critical junctures in the attack and highlights several points at which it could have been stopped.

The attack started on November 27, 2013. Target personnel discovered the breach and notified the U.S. Justice Department by December 13th. As of December 15th, Target had a third-party forensic team in place and the attack mitigated. On December 18th, security blogger Brian Krebs broke the story in this post . "Nationwide retail giant Target is investigating a data breach potentially involving millions of customer credit and debit card records," mentioned Krebs. "The sources said the breach appears to have begun on or around Black Friday 2013 -- by far the busiest shopping day the year."

Then things became interesting. Target informed about 110 million credit/debit-card wielding shoppers, who made purchases at one of the company's stores during the attack, that their personal and financial information had been compromised. To put that in perspective, the attackers pilfered 11 gigabytes of data.

Anatomy of the attack

Now let's look at the sequence of events that precipitated the data breach. Had any of these steps been noticed and countered, the attack would likely have fallen apart.

1. Preliminary survey We don't know for certain if or how the attackers performed reconnaissance on Target's network prior to the attack, but it wouldn't have required much more than a simple internet search.

Teri Radichel in this GIAC (GSEC) dissertation explains how the attackers may have gleaned information about Target's infrastructure. "Reconnaissance would have revealed a detailed case study on the Microsoft website describing how Target uses Microsoft virtualization software, centralized name resolution, and Microsoft System Center Configuration Manager to deploy security patches and system updates," writes Radichel. "The case study also describes Target's technical infrastructure, including POS system information."

The internet provides additional clues. "A simple Google search turns up Target's Supplier Portal, which includes a wealth of information for new and existing vendors and suppliers about how to interact with the company, submit invoices, etc.," adds Krebs in this blog post . After drilling down, Krebs found a page listing HVAC and refrigeration companies.

2. Compromise third-party vendor The attackers backed their way into Target's corporate network by compromising a third-party vendor. The number of vendors targeted is unknown. However, it only took one. That happened to be Fazio Mechanical, a refrigeration contractor.

A phishing email duped at least one Fazio employee, allowing Citadel , a variant of the Zeus banking trojan, to be installed on Fazio computers. With Citadel in place, the attackers waited until the malware offered what they were looking for -- Fazio Mechanical's login credentials.

At the time of the breach, all major versions of enterprise anti-malware detected the Citadel malware. Unsubstantiated sources mentioned Fazio used the free version of Malwarebytes anti-malware, which offered no real-time protection being an on-demand scanner. (Note: Malwarebytes anti-malware is highly regarded by experts when used in the correct manner.)

Chris Poulin, a research strategist for IBM, in this paper offers some suggestions. Target should demand that vendors accessing their systems use appropriate anti-malware software. Poulin adds. "Or at least mandate two-factor authentication to contractors who have internal access to sensitive information."

3. Leveraging Target's vendor-portal access Most likely Citadel also gleaned login credentials for the portals used by Fazio Mechanical. With that in hand, the attackers got to work figuring out which portal to subvert and use as a staging point into Target's internal network. Target hasn't officially said which system was the entry point, but Ariba portal was a prime candidate.

Brian Krebs interviewed a former member of Target's security team regarding the Ariba portal, "Most, if not all, internal applications at Target used Active Directory (AD) credentials and I'm sure the Ariba system was no exception," the administrator told Krebs. "I wouldn't say the vendor had AD credentials, but internal administrators would use their AD logins to access the system from inside. This would mean the server had access to the rest of the corporate network in some form or another."

Poulin suggests several attack scenarios, "It's possible that attackers abused a vulnerability in the web application, such as SQL injection, XSS, or possibly a 0-day, to gain a point of presence, escalate privileges, then attack internal systems."

Not knowing the details, makes it difficult to offer a remediation for this portion of the attack. However, Poulin opines that IPS/IDS systems, if in place, would have sensed the inappropriate attack traffic, notifying Target staff of the unusual behavior. According to this Bloomberg Business article , a malware detection tool made by the computer security firm FireEye was in place and sent an alarm, but the warning went unheeded.

4. Gain control of Target servers Again, Target hasn't said publicly how the attackers undermined several of their internal Windows servers, but there are several possibilities.

Radichel in the SANS dissertation offers one theory. "We can speculate the criminals used the attack cycle described in Mandiant's APT1 report to find vulnerabilities," mentions Radichel. "Then move laterally through the network... using other vulnerable systems."

Gary Warner, founder of Malcovery Security, feels servers fell to SQL-injection attacks. He bases that on the many similarities between the Target breach and those perpetrated by the Drinkman and Gonzalez data-breach gang which also used SQL injection.

5. Next stop, Target's point of sale (POS) systems This iSIGHT Partners report provides details about the malware, code-named Trojan.POSRAM, used to infect Target's POS system. The "RAM-scraping" portion of the POS malware grabs credit/debit card information from the memory of POS-devices as cards are swiped. "Every seven hours the Trojan checks to see if the local time is between the hours of 10 AM and 5 PM," mentions the iSIGHT Partners report. "If so, the Trojan attempts to send winxml.dll over a temporary NetBIOS share to an internal host (dump server) inside the compromised network over TCP port 139, 443 or 80."

This technique allowed attackers to steal data from POS terminals that lacked internet access.

Once the credit/debit card information was secure on the dump server, the POS malware sent a special ICMP (ping) packet to a remote server. The packet indicated that data resided on the dump server. The attackers then moved the stolen data to off-site FTP servers and sold their booty on the digital black market.

Lessons learned

As a result of the breach, Target has tried to improve security. A corporate webpage describes changes made by the company regarding their security posture, including the following:

• Improved monitoring and logging of system activity
• Installed application whitelisting POS systems and
• Implemented POS management tools
• Improved firewall rules and policies
• Limited or disabled vendor access to their network
• Disabled, reset, or reduced privileges on over 445,000 Target personnel and contractor accounts
• Expanded the use of two-factor authentication and password vaults
• Trained individuals on password rotation

If these changes have been implemented as Target describes, they would help address the weaknesses exploited during the attack.

However, the attackers demonstrated extraordinary capabilities by exfiltrating data from a complex retail network as noted in this paper (courtesy of Brian Krebs) by Keith Jarvis and Jason Milletary of Dell SecureWorks Counter Threat Unit, which makes their conclusion all that more poignant. "This level of resourcefulness points to the current value for credit-card data in the criminal marketplace," mentions the paper. "And similar breaches will be common until fundamental changes are made to the technology behind payment cards."

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Cyber Case Study: Target Data Breach

by Kelli Young | Sep 13, 2021 | Case Study , Cyber Liability Insurance

During the final months of 2013, Target—the well-known American retailer—experienced a large-scale security breach. The Target data breach breach led to several point-of-sale systems being compromised by malware, giving cybercriminals access to millions of customers’ personal and financial data. The incident became one of the most high-profile data breaches of the decade, impacting customers across the country.

Target faced numerous consequences in the aftermath of the breach—including a range of recovery expenses, hundreds of lawsuits, decreased customer confidence, lost profits and widespread criticism related to the company’s initial response. In hindsight, organizations can learn many lessons by analyzing the details of this breach, its impact and Target’s mistakes along the way. Here’s what your organization needs to know.

The Details of the Target Data Breach

The cybercriminals officially launched the malware and began collecting customer data from Target’s point-of-sale systems on November 27th. Three days later, FireEye—a company that Target had purchased security software from earlier that year—detected the malware and reported the issue to Target’s headquarters. Despite receiving this report, Target did not take steps to stop the malware. After Target’s inadequate response, the cybercriminals were then able to implement exfiltration malware on the point-of-sale systems to transport customer data out of the company’s network. In the coming days, the cybercriminals began moving the data. This activity triggered another report from FireEye on December 2nd. However, Target still did not respond to the malware.

On December 12th, the U.S. Department of Justice identified the malware and notified Target of the breach. At that point, Target began to investigate the incident, receiving assistance from both the Secret Service and the FBI. By December 15th, most of the malware had been removed. On December 18th, a cybersecurity blogger became aware of the breach and publicly shared the incident’s details. One day later, Target released an official statement on the matter, outlining what happened and confirming that the company was working with the proper authorities to resolve the incident. Nevertheless, severe damage had already been done. In total, the cyber criminals compromised approximately 40 million customers’ credit and debit card information as well as 70 million customers’ personal details (e.g., names, addresses and phone numbers).

The Impact of the Target Data Breach

In addition to compromised customer data, Target encountered a series of ramifications after the breach.

Recovery costs Target had to take several steps to recover from the breach and minimize the risk of future security incidents. Recovery efforts included obtaining assistance from a third-party forensics firm to investigate the breach, offering customers one year of free credit monitoring, setting up a call center for breach-related concerns, equipping point-of-sale systems with chip-and PIN-enabled technology, segmenting different company networks and implementing stricter access controls. The overall cost of these efforts totaled more than $250 million.

Legal expenses Apart from recovery costs, Target also faced significant legal expenses from the breach. In particular, the company was involved in over 140 lawsuits throughout the country regarding the incident. In 2017—four years after the breach occurred— Target finally reached an $18.5 million settlement spanning 47 states. As part of the settlement, the company was required to consult a third party to help encrypt and further protect customer data, as well as hire an executive responsible for leading a workplace cybersecurity program—thus compounding costs.

Reputational damages Lastly, Target experienced a range of reputational issues due to the breach—namely, reduced customer confidence and distrust in senior leadership. The timing of the incident was especially detrimental, seeing as it took place during the holiday shopping season and negatively impacted year-end sales.

In fact, Target’s profits dropped by a staggering 46% during the final quarter of 2013. Moving into January 2014, one-third (33%) of U.S. households reported shopping at Target—down 10% from the previous year. The company’s prolonged response to the breach was also heavily criticized, causing stakeholders to hold senior leaders accountable for the delay and demand change. As a result, both Target’s longstanding CEO and chief information officer stepped down in 2014, paving the way for significant transitions in executive leadership.

Lessons Learned from the Target Data Breach

There are several cybersecurity takeaways from the Target data breach. Specifically, the incident emphasized these important lessons:

Investing in cybersecurity measures is worth it. This large-scale breach could have been minimized or potentially avoided altogether if Target had additional cybersecurity precautions in place, such as network segmentation and more elaborate data encryption techniques. As such, this incident highlighted the value of investing in adequate cybersecurity procedures. The expense of implementing these measures is well worth the benefit of deterring even costlier incidents further down the road.

An effective cyber incident response plan is critical. One of Target’s greatest downfalls during the breach was the company’s initial response. Although Target received multiple reports from FireEye about the malware, the company failed to act until the federal government got involved. By responding just days earlier, Target could have stopped the cybercriminals before they could transport customer data—significantly limiting the impact of the breach. What’s more, the company also took extra time to inform the public of the incident, which upset many customers. Such concerns emphasize how critical it is to take reports seriously, act quickly and have an effective cyber incident response plan in place. This type of plan can help an organization establish timely response protocols for remaining operational and mitigating losses in a cyber incident. Generally speaking, an effective cyber incident response plan should outline:

• Who is part of the cyber incident response team (e.g., board members, department leaders, IT professionals, legal experts and HR specialists) • What roles and responsibilities each member of the cyber incident response team must uphold during an attack • What the organization’s key functions are and how these operations will continue throughout an attack • How any critical workplace decisions will be made during an attack • When and how stakeholders should be informed of an attack (e.g., employees, customers, shareholders and suppliers) • What federal, state and local regulations the organization must follow when responding to an attack (e.g., incident reporting protocols) • When and how the organization should seek assistance from additional parties to help recover from an attack (e.g., law enforcement and insurance professionals)

Third-party exposures must be considered. This breach also showcased the importance of promoting third-party security. After all, Fazio Mechanical’s cyber vulnerabilities are what ultimately led to the onset of the breach. To prevent these exposures, it’s vital to work with vendors, suppliers and other third parties to ensure they uphold effective cyber-security practices. This collaboration may include incorporating cyber risk management within vendor contracts, restricting third parties’ access to sensitive data and monitoring suppliers’ compliance with applicable regulations—such as the Payment Card Industry Data Security Standard.

Proper coverage can make all the difference. Finally, this breach made it evident that no organization—not even a successful, national retailer like Target—is immune to a data breach. What’s worse, cyber incidents have only increased in cost and frequency since this event occurred. That’s why it’s crucial to ensure adequate protection against cyber-related losses by securing proper coverage. Make sure your organization works with a trusted insurance professional when navigating these coverage decisions.

We can help.

In the unfortunate event that your business falls victim to a cyber attack, of any type, we can help you recover.

Cyber & Data Breach Liability coverages are developing on a daily basis as new threats emerge and new insurance companies enter the market.

Regardless of the type of business, one thing is certain, if you’re a business in operation today, you face cyber risks. Which means, you need to thoroughly understand your risk of a loss, how you would respond if a loss did occur, and whether Cyber & Data Breach Liability coverage makes sense for you.

The level of coverage your business needs is based on your individual operations and can vary depending on your range of exposure. It’s important to work with an Insurance Advisor that can identify your areas of risk, and customize a policy to fit your unique situation.

If you’d like additional information and resources, we’re here to help you analyze your needs and make the right coverage decisions to protect your operations from unnecessary risk. You can download a free copy of our  eBook , or if you’re ready make Cyber Liability Insurance a part of your insurance portfolio,  Request a Proposal  or download and get started on our  Cyber & Data Breach Insurance Application  and we’ll get to work for you.

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Case Study: What We've Learned from the Target Data Breach of 2013

May 19, 2023.

In 2013, the infamous Target data breach swept through America, compromising a devastating number of point-of-sale systems and along with it, over 40 million credit and debit card numbers. Four years later in 2017, Target reached an  18.5-million dollar multistate settlement , requiring they employ an executive to oversee a comprehensive data security program. The company was also required to hire a third-party which will encrypt and protect card information, ensuring their data is secured and unreadable if accessed.

Target has since been adopting appropriate measures to keep their customers’ information safe – but it’s important to learn from where they went wrong. So what was Target lacking before? We’ve compiled a comprehensive autopsy: here's our case study, diagnosing several factors and components which led to Target’s massive security breach.

What exactly happened in the Target security breach?

According to  Krebs on Security , who first reported the news, the breach involved the acquiring of customer information (encrypted PIN data, customer names, credit and debit card numbers, card expiration dates) stored in the magnetic stripe on the back of their payment cards. Undetectable malware was installed on a number of point-of-sale systems in a short amount of time, which indicates the software may have been installed via an automatic updating process. Since this breach, the U.S. has adopted  EMV technology , which would have prevented hackers from acquiring information via the magnetic stripe (in other words, their malware would not have affected the chipcard). The perpetrators completed their attack by accessing one of Target’s third-party vendors, a refrigerator contractor, Fazio Mechanical. The vendor accessing Target’s systems was not using adequate anti-malware software, and their lack of segregation between networks led to the compromise of millions of customers’ information.

We can conclude a few things from this:

• Target’s systems were not protected and thus were vulnerable to phishing attacks
• Networks were not adequately segregated
• Several previous warnings were overlooked

What’s interesting to consider about the Target security breach is the fact that Target passed PCI compliance audits prior to the breach and had implemented security methods required by the  PCI Security Council .

In a case study on the Target data breach, the  SANS Institute Reading Room  reacted with this statement, “A comprehensive approach to security will consider all assets, not just those that fall under compliance regulations. Each asset has a specific set of threats and vulnerabilities that can be considered as part of a risk management program, rather than simply implementing what is mandated for a subset of assets. As demonstrated in this breach, many different assets were used to move throughout the network, so consideration of the POS systems alone would not address the root causes that led up to this attack.”

What Target did wrong

How a company responds to a malware infection makes a considerable difference in how an attack may impact their customers and business. The Initial response is crucial to the minimizing of a malware attack, and is also one of the areas where Target underperformed.

Target missed several internal alerts, and only discovered their breach when contacted by the Department of Justice. Their monitoring software (FireEye) alerted Target staff in Bangalore, India, who in turn notified staff in Minneapolis: but no action was taken.

Despite the fact that Target reportedly spent a large sum on security technology utilizing encryption, their data was accessed in memory where it was unencrypted.

Damages to the company

While the effects of the breach are everlasting on Target’s security approach, the company faced major losses at the time of occurrence, setting them back greatly during the holiday season. After profits dropped 46 percent during Q4 of 2013, customer visits plunged during the new year, prolonging Target’s losses. High-ranking employees, including Target’s CEO, lost their jobs, and over 140 lawsuits were filed in three years. The  Huffington Post  estimates the breach had cost $252 million  before  the lawsuit, including the costs for banks to reissue 21.8 million cards.

How the data breach could have been prevented

A multi-layered security strategy would have prevented, if not at least mitigated the detrimental effects of this breach on Target and its customers.

Focusing on all vulnerabilities

Target’s strategy focused mainly on PCI compliance, while there are sometimes risks that fall outside of the scope of PCI requirements. Standards may also inform adversaries which security measures a business  has  implemented, so the attacker will capitalize on vulnerabilities not on the PCI compliance checklist.

Implementing tokenization

As also stated by the SANS Reading Room, “For encryption to be effective, you must employ an in-depth defense strategy in which you also protect the key and protect access to systems where the data needs to be unencrypted in order to be processed.”

In the instance of the Target breach, tokenization would have played a crucial role in protecting consumer information. Rather than relying on basic encryption methods, the customer information would have been replaced with unique, irreversible tokens – unable to be accessed and decoded by hackers.

Adapting EMV technology

As mentioned before, an EMV terminal accepting chip cards could have also prevented the theft of information via the magnetic strip on the back of cards. CardConnect’s  CardPointe  and  Bolt  P2PE terminals protect in-store transactions as all sensitive data is instantly encrypted and tokenized upon entry. The terminal accepts both cards with magnetic strips and EMV chips, utilizing PCI-validated point-to-point encryption (P2PE) for each individual transaction. All transactions captured with the CardPointe and Bolt P2PE terminals are captured in the powerful transaction management portal, CardPointe, in real-time, making it easy to accept and manage transactions. What’s also really important is that CardPointe also keeps its users apprised of the status of their business’s level of PCI compliance.

The final lesson of the Target data breach

It’s important for merchants to understand that the range of security threats can be wider than standard PCI compliance. Monitoring networks and being attentive to disruptive or unusual patterns in a system’s network is crucial to protecting their systems – and in turn, customer data. Target is just one of many companies to have faced a major data breach. Make sure your company or business is protecting your customers the best they can.

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