Retailers Fighting To No Longer Store Credit Data

Technical Writing Geek writes with the news that the retail industry is getting mighty fed up over credit card company policies requiring them to store payment data. The National Retail Federation (NRF) has gone to bat for store owners, asking the credit industry to change their policies. The frustration stems from payment card industry (PCI) standards and new security measures going into place across the retail experience. Retailers are now trying to point out that many of the elements of the standard would not be a requirement if they didn't have to store so much payment data. "Even if the NRF's demands were immediately met, it would take several years before retailers could purge their systems and applications of credit card data, he said. Over the years, retailers have collected and stored credit card data in myriad systems and places -- including relatively old legacy environments -- and they are just now realizing the data can be a challenge, he said. Purging it can be a bigger headache because the data is often inextricably linked to and used by a variety of customer and marketing applications; simply removing it could cause huge disruptions."

While were at it

Let's ditch social security numbers too. Once we purge everything, we can come up with a new, unique, impervious to fraud, uncrackable new id for each person and their various accounts.

Data Theft

And if they didn't store the data then we wouldn't have the TJ Maxx crap like stuff going on in the first place. Storing it should be illegal - encrypted or not. There is no reason that numbers need to be stored - even for subscriptions. If worse comes to worse then get the lazy bastards to re-swipe or re-enter the card data.

Re:Data Theft

I had a professor in univesity for one of my security classes. Basically, he told us that SSL, while it's good at what it does, doesn't really solve the real security issues with transactions happening over the internet. Nobody sniffs the wire or does man in the middle attacks to collect the data, because it's often very difficult, and requires physical access to cables. What they usually do is just break into the back end database that's storing all this data. It's much easier. Him and some of his colleagues came up with a much better system, whereby the credit card info never went to the retailer, but instead just a digital certificate signed by the credit card company that would authorize a payment for some certain amount. In the end, the industry decided not to go with that standard, because it was harder to implement. It solved the real problem, but SSL was adopted because they figured it was good enough. It's interesting to see that decision coming back when if they would have just done it right the first time, we'd have much less problems.

Re:Data Theft

I would much rather trust PayPal's servers than every little Mom & Pop business with an e-commerce website that they hired the local high school wiz-kid to create on $4/month shared hosting. N.B. I used to be that wiz-kid.

Re:Data Theft

That professor needs to get with the times:
"Nobody sniffs the wire or does man in the middle attacks to collect the data, because it's often very difficult, and requires physical access to cables."

No, usually a bot is placed in a router that does it for you. There is very little need to be physically at the wire it most cases, anymore.

OTOH, since his 'better method' was only better under the fallacy that no one watches the line.
As someone who has written sniffer to ferret out unauthorized movement of SSN within an organization, I can honestly say that I never physically went to any router or box to do the install.

Actually, now that I am thinking about it(it's been 10 years) I didn't physically go to one location.

I took a switch/router that I installed the bot on and physically unpluged a network cable, plugged it into this router and then plug a cable from the router to the port. No one monitoring the network noticed anything. It took me about 4 seconds to add the switch.

That was done on a bet.

Six letters for this. B O O H O O

I say "tough".

PCI has been coming for a while now.

Why are these people "only now" realizing what this entails?

Oh yeah. Because they ignored it until they couldn't ignore it anymore.

Now they're bitching about how HARD it's going to be to implement or retrofit?

Boo fucking hoo.

They had the opportunity to ammortize the cost out over a longer period of time. Now they get bit because they tripped over a dollar to save a dime.

Well

It would seem to me that retailers SHOULD be storing the credit card data because there has to be some type of audit trail available. After all, people need to be able to track down credit card fraud, etc. I'm guessing that the credit card companies store this data as well, though, but they probably only store the amount of the transaction, card number and date, whereas the retailers would have the records of what was purchased, on what date, who rang up the transaction, etc.

Re:Well

Why should the credit card data have to be stored by both the retailer and the CC company?

Let the CC company keep a transaction ID and all confidential information, and the retailer keeps the same transaction ID, along with purchase details. That puts the burden of security all in one place, with the CC company, rather than scattered around with all the various retailers.

And if there's a trail to be followed, the CC company and retailer can compare records through the transaction ID.

All about shifting liability

I would be *very* surprised if the banks voluntarily accepted liability for any part of this chain. They face none now...they'll need a very strong reason to take any risk. The banks like the present system because they face no liability...if the merchant didn't do the right thing, or faces a chargeback, it's all on the merchant. (and it's on the merchant for liability if they're hacked)

a quicker method

RE:["it would take several years before retailers could purge their systems and applications of credit card data, he said. Over the years,"]

give me a Linux live CD and access to the keyboard and i could purge them in just a very short time...

Wait what?

several years before retailers could purge their systems and applications of credit card data

TRUNCATE TABLE Customer Data

There ya go!

Amusing: The shell game

This has nothing to do w/ storing 1's and 0's. It has everything to do with your credit score. If they don't have the information, you can't fight it. If they have any information it must be secured, so why are they bitching and wining about the amount of data? Look behind the question to see the real answer.

A service for those who don't want to RTFA

"Retailers: In the interest of preserving your privacy, we'll all put your information into a single database instead of scattering it among lots of little ones."

The joys of insecurity

Keeping them must be a pain, but securing them should be an easy thing to accomplish. Sadly, it's not something that every store takes great pains to do.

At the major book chain I used to work at, the unlocked stockroom had a shelf filled with boxes marked "CC Recepits X" where 'X' was the date range.

If you walked out with something like two boxes, you could theoretically have the information for every customer that payed with a credit card over the course of a year.

Then again, shrink was a huge problem, and my car got stolen from the parking lot (afterwards they told me there had been four car break-ins that month, but kept the information a secret from the staff) so it's not like CC receipts were the only insecure items in the place.

why not encrypt?

As a side job simply to learn PHP, I built a E-Commerce site using osCommerce, and was shocked to find that they stored the customer CC in plain text in a table. After dealing the the 30 other issues osC has, I grabbed a OS PHP encrypt class from somewhere and added 512-bit encryption to the CC number and stored it like that.

I wonder why they don't just mandate something along these lines, for now, at least.

Several Issues

There are at least two issues with credit card data based on this article. I definitely like the retailer's NOT storing full credit card data. The credit card type, possibly the bank, the card holder's name, the last few digits of the credit card number, and the charge date and time should be more than enough to identify a transaction, especially if there's a transaction id. The credit card companies HAVE to have full account data, but the more systems this data is stored in, the less secure it is, no matter what security is implemented at each individual site. If you can remove the bank and CC number entirely and work strictly off of transaction ID and card type, I'd be even happier. Storing this minimum of data would allow everybody to identify a particular charge if there's a dispute about charges, would still allow retailers to generate whatever statistical data they need, and would prevent identity thieves from getting full CC numbers, expiration dates, etc. from retailers.

On the other hand, retailers still need to secure whatever legacy data they have, and work on purging the systems that store it. These are two different problems, and both sides of this debate seem to want to point out the problems with their opponent's positions without addressing their own issues. If retailers have the data and aren't securing it, then I have little sympathy for them when they get heavily fined for not treating our sensitive data properly, even if the CC companies require the storage of some of that data and shouldn't. Especially for major retailers where the IT budget can be spread across many, many stores.

So, short term solution is to get the retail stores to abide by the current security regulations posted by CC companies. The longer term solution is to get a more sane set of security solutions from the CC companies, and make it so that every retail outlet is required NOT to store sensitive data that crackers might want to get a hold of. This would reduce the number of outlets to our sensitive data to a minimum. It would reduce it to the companies that have to retain that data anyway.

Cash is so easy.

"This note is legal tender for all debts public and private."

Very simple compared to the 15 page credit card contract for the consumer and the headaches for the retailer.

Henry David Thoreau said it best, "Simplify".

Speaking from experience...

I've been working with a PCI certified auditor for close to nine months now to bring my company into compliance with the latest Data Security Standard. The DSS is a great source if you're looking for a concise primer on good development, administration and training practices, but... Bringing a company into compliance with all the requirements is incredibly difficult. No exaggeration, we've spent tens of thousands of dollars on the audit itself, tens of thousands more on infrastructure and the equivalent of one full time employee working on nothing but DSS compliance for the past year. Once we receive the stamp of compliance from the Payment Card Industry, we just have to turn around and do it all over again next year, the following year, the year after that, etc... Granted, once we get through the first audit, the following audits will be less expensive from a time and money perspective, but we're still looking at anywhere from ten to fifty grand a year for the certified auditor and any DSS mandated changes to our system. For example, the DSS requires for 2008 either an application layer firewall in front of web-facing apps or third-party code review. There goes my bonus for next year... Long story short - very few companies are going to be able to meet the Payment Card Industry Data Security Standard and on top of that, most companies don't want to store freakin' payment card anyway.

It's very simple

In spite of the smokescreen being thrown up by the big credit cards, it's really very simple.

The banks ALREADY have and must keep all of the information. Their byzantine PCI standards demand that the merchants keep a full duplicate of this highly sensitive data and dictate how it must be stored. The merchants maintain (correctly) that if the banks had as much intelligence as a slug all they would need to retain is non-sensitive (and useless to identity thieves) transaction/approval numbers rather than very sensitive cc numbers and identifying info.

In other words, in spite of what the banks claim, this is about reducing the risks and liabilities rather than shifting them. In fact, it's the banks that are trying to spread liability by maintaining a situation where they can plausibly play the blame game.

Various schemes have been available for DECADES to make sure that fraudulant credit transactions can not happen but the banks have fought against them tooth and nail in order to keep the current approach where name and cc number are all that's needed to commit fraud. They're also the ones that have been routinely offering big limit credit cards to toddlers, dogs, and cats then trying to stick innocent 3rd parties with the liabilities.

The entire identity theft problem only exists because of the very same banks. I'll bet that it would all stop instantly if a law was passed banning any attempt at collections for credit card debt unless the bank can present a picture of the alleged debtor actually signing the agreement for the account AND that without a digital transaction signature, the cardholder is presumed NOT to be liable for the charge. You can be assured that credit cards with useful smart chips and public key signature capability would be implemented the INSTANT such a law went into effect.

Please feel free to visualise (or not!) an analogy involving identity thieves, defrauded individuals, bank managers and goatse.

Bad design rears its ugly head

"Purging it can be a bigger headache because the data is often inextricably linked to and used by a variety of customer and marketing applications; simply removing it could cause huge disruptions."

Hmmm, sound like no data modeling, rushing through the design phase, etc. just to save costs and get the fucktard managers to stop screaming about needing it "yesterday" and other such shit. Excuse me if I don't shed a tear.

It's the POS vendors more than the retailers

When I supported POS systems five years ago I was amazed at what they would store in plain text in log files. Not just CC numbers but the entire contents of the magnetic strip. And POS software is a very stagnant industry, once retailers have a system that works they're very slow to change. Hell, I know of one convenience store chain that is still running Windows 95 with a WinNT back of house.

I don't understand...

How is a credit card number "sensitive" information in any way whatsoever? You follow the average credit-using American and you will find a trail of credit card number spread far and wide.

For the period 1950-1990 this wasn't really a problem. Now suddenly it is a problem? How? I reguarly have fraudulent charges put on a credit card. At least once a year. Want to know how much this "identity theft" costs me?

Nothing. Ever. Never has. Never will.

Last time around Blizzard got stuck for some chargebacks. Someone decided to try to use my credit card number to pay for three WoW subscriptions. They failed. Blizzard evidently didn't check the cards out too well and didn't question why a US-address card was being used from Australia. Too bad for them, they had to pay the chargeback fee to their credit card processor. This was because they did not invest in enough fraud detection and are not manually checking out these charges that have a high potential of fraud. I suppose the tradeoff is worth it if the volume of non-fraud is high enough.

I hear constantly how much of a problem this is for card holders and I simply do not understand. I have never heard of a card holder being held responsible for a fraudulent charge, ever. I have never heard of anyone other than the merchant getting penalized in any way. The person committing the fraud is never pursued and never has any consequences.

Now, in my opinion it would be very simple to stop 90% of credit card fraud - have the card issuing companies (Visa, MC, etc.) prosecute the people committing fraud. Currently because nobody wants to press charges law enforcement does nothing. Fix this, get some enforcement and the problem will go away. Unlike copyright infringement, most countries will gladly prosecute credit card fraud, if they are given the information and tools to do so. When both the person committing the crime and the crime itself are in the same country there is no excuse for not pursuing it.

No prosecution simply means that the risk vs. reward balance is all screwed up. There is no risk today, just reward. Which is why there is so much credit card fraud.

What disruptions?

... simply removing it could cause huge disruptions.

You mean that suddenly I won't be receiving junk mail, spam and telemarketing calls?

I'm all for it.

Agencies and bullshit

I have to post this anonymously, because I certainly don't want it to ever come back to bite my client, and also this requires me to be vague and my story somewhat hard to read. So here goes.

We have some software that tracks a certain kind of data. There is really no reason whatsoever that social security numbers should be part of this data. However, certain "upstream" entities, whom my client's customers depend on accepting my client's reports for "accreditation" purposes started requiring social security numbers attached to reports. Now, we're really not a bunch of retards, so our first response was to leave a blank space on our reports and let the customers fill this in themselves. But eventually some of the agencies decided that wasn't good enough, and required that we collect social security numbers from our customers, store them, and print them on reports. So we did this.

Fast forward a few years, not only has SOX put in a whole batch of requirements on companies that store that kind of info (which we have complied with), but some of the "upstream" agencies which we deal with, because of complaints from their membership, are now requiring that we not collect or store social security numbers, while others are still insisting that we do. Fucktards! There are really days when I want to buy a plane ticket and go strangle some of these dumbshits!!!

There are a few issues with PCI

The 1st issue is that to be an Auditor you have to be in the business of selling security stuff. That is a serious conflict of interest.

The 2nd issue is that the PCI auditors are foolish enough to be set up to take the blame and provide insurance when a company fails. Lets assume that a processors gets hacked and is sending card numbers off to mob in a different country. How do banks cover reissuing the cards and recovering anything they don't stick the merchants with? In this case the processor that is handing off the numbers ends up bankrupt so there there is no blood left in that stone and the banks are just the members of the card schemes so the only ones left are the merchants and now thanks to PCI, the audit companies and their insurance policies.

Is there any wonder why most of the best groups that did past audits won't touch them anymore?

Same problem with paper credit card slips

This is not just an electronic problem. My brother-in-law runs two restuarants and recently devcided to accept credit cards. He's required to keep the printed credit card slips in case anyone disputes a charge. After a year as the mountains of paper are building up he's realized that this borders on the ridiculous, and creates a huge liability for him with personal credit card data. What he's doing now is keeping the paper records for 90 days and then shredding them. So he's limited the risk of losing someones card number to the last three months. Most disputed charges seem to happen within 90 days, and he's decided that he'd rather take the losses after 90 days than risk storing all that data. One thing that's important to realize here is that people dispute credit card charges all the time that they actually made. So every month he gets a handful of disputed charges that turn out to be completely legitimate. There would be a lot less need for him to keep records if credit card users didn't dispute so many legitimate charges. Larry

From a Small Merchant Standpoint

I'll throw my hat into this discussion.

What I'd like to see is a unique transaction number generated by the primary card company (Visa/MasterCard/Discovery/AmEx) that is 128 digits that includes the CC type, amount of transaction along with an ID for payment. This information is all I would need to hold in my system in order to be paid by the card company and because the ID includes the amount of the transaction, I can't overbill any card.

The advantages are that the card company only has the amount I've billed along with a transaction ID that identifies the billing merchant. This should actually ease chargebacks and damn well stop card fraud because a merchant who continually gets hit with chargebacks of a fraudulent nature can then be cut off from that card network. It also allows the company greater control on the merchant agreements and the rate a merchant actually pays for the privleage of accepting a card.

Calif's AB 779 would inhibit this solution

The National Retail Federation proposes the innovative solution of requiring merchants to store just "authorization code" and "truncated receipt". This is the kind of creative thinking the industry needs. However, this solution might be illegal under California's pending Assembly Bill 779. The words of AB 779 are unclear and poorly defined [blogspot.com]. For example, AB 779 would forbid a merchant from storing various data elements such as "payment verification code" and "payment verification value". The legislation does not define these terms, and my research finds no clear industry definitions for these terms. (Part of the issue is that different industry players use different words. Further, neither PCI version 1.1 nor its Glossary defines "payment verification code" and "payment verification value".) Therefore, AB 779, if the governor signs it into law, would cause confusion and roadblocks as the industry changes and technology evolves. Parties would not know whether the good data elements they want to store will later in court be interpreted as the data elements AB 779 bans from storage.

Fraudulent transactions

The information on the credit cards kept/stored by retailers is for security purpose, to avoid any future fraudulent transactions being made. Storing data's is actually beneficial for the credit cards companies, but where retailers are concern they find it a time and storage consuming. But then again, purging data from the system could face many types of problems in the form of security for both retailers and the credit card companies because data is often associated with range of buyers and removing it would cause severe inconveniences.