2009 Data Breach Investigation Report (Verizon Business Risk Team)

More electronic records were breached in 2008 than the previous four years combined, fueled by a targeting of the financial services industry and a strong involvement of organized crime, according to the "2009 Verizon Business Data Breach Investigations Report" (DBIR) released Wednesday (April 15).

This second annual study -- based on data analyzed from Verizon Business' actual caseload comprising 285 million compromised records from 90 confirmed breaches -- revealed that corporations fell victim to some of the largest cybercrimes ever during 2008. The financial sector accounted for 93 percent of all such records compromised last year, and a staggering 90 percent of these records involved groups identified by law enforcement as engaged in organized crime.
Verizon Business investigative experts found, as they did in the company's first report covering 230 million compromised records from 2004 to 2007, that nearly nine out of 10 breaches were considered avoidable if security basics had been followed. Most of the breaches investigated did not require difficult or expensive preventive controls. The 2009 report concluded that mistakes and oversight failures hindered security efforts more than a lack of resources at the time of the breach.

Key Findings of the 2009 Report
This year's key findings both support last year's conclusions and provide new insights. These include:
- Most data breaches investigated were caused by external sources. Seventy-four percent of breaches resulted from external sources, while 32 percent were linked to business partners. Only 20 percent were caused by insiders, a finding that may be contrary to certain widely held beliefs.
- Most breaches resulted from a combination of events rather than a single action. Sixty-four percent of breaches were attributed to hackers who used a combination of methods. In most successful breaches, the attacker exploited some mistake committed by the victim, hacked into the network, and installed malware on a system to collect data.
-In 69 percent of cases, the breach was discovered by third parties. The ability to detect a data breach when it occurs remains a huge stumbling block for most organizations. Whether the deficiency lies in technology or process, the result is the same. During the last five years, relatively few victims have discovered their own breaches.
- Nearly all records compromised in 2008 were from online assets. Despite widespread concern over desktops, mobile devices, portable media and the like, 99 percent of all breached records were compromised from servers and applications.
- Roughly 20 percent of 2008 cases involved more than one breach. Multiple distinct entities or locations were individually compromised as part of a single case, and remarkably, half of the breaches consisted of interrelated incidents often caused by the same individuals.
- Being PCI-compliant is critically important. A staggering 81 percent of affected organizations subject to the Payment Card Industry Data Security Standard (PCI-DSS) had been found non-compliant prior to being breached.

The State of Cybercrime: 2009
As the cybercrime market continues to evolve, so do the targets, techniques and types of attackers. The big money is now in stealing personal identification number (PIN) information together with associated credit and debit accounts. In 2008, Verizon Business witnessed an explosion of attacks targeting PIN data.
These PIN-based attacks hit the consumer much harder than typical signature-based counterfeit attacks in which a consumer's credit card is compromised. Investigators found that PIN fraud typically leads to cash being withdrawn directly from the consumer's account -- whether it is a checking, savings or brokerage account -- placing a greater burden on the consumer to prove that transactions are fraudulent.
The higher monetary value commanded by PIN data has spawned a cycle of innovation in attack methodologies. Criminals have re-engineered their processes and developed new tools, such as memory-scraping malware, to steal this valuable commodity.The geographic distribution of external data breach sources continue to show high activity in Eastern Europe, East Asia and North America. In fact, the 2009 report shows that these regions accounted for 82 percent of all external attacks.Among investigators, Tippett pointed out, "Eastern Europe is known as a notorious haven for organized cybercrime outfits, which played a major role in breaches throughout 2008."
"We have a great deal of evidence that malicious activity from Eastern Europe is the work of organized crime," he said. However, he added, "On the bright sight, efforts with law enforcement led to arrests in at least 15 cases (and counting) in 2008."

Recommendations for Enterprises
The 2009 study again shows that simple actions, when done diligently and continually, can reap big benefits. Based on the combined findings of nearly 600 breaches involving more than a half-billion compromised records from 2004 to 2008, the Verizon Business RISK team recommends:
- Change Default Credentials. More criminals breached corporate assets through default credentials than any other single method in 2008. Therefore, it's important to change user names and passwords on a regular basis, and to make sure any third-party vendors do so as well.
- Avoid Shared Credentials. Along with changing default credentials, organizations should ensure that passwords are unique and not shared among users or used on different systems. This was especially problematic for assets managed by a third party.
- Review User Accounts. Years of experience suggest that organizations review user accounts on a regular basis. The review should consist of a formal process to confirm that active accounts are valid, necessary, properly configured and given appropriate privileges.
- Employ Application Testing and Code Review. SQL injection attacks, cross-site scripting, authentication bypass and exploitation of session variables contributed to nearly half of the cases investigated that involved hacking. Web-application testing has never been more important.
- Patch Comprehensively. All hacking and malware that exploited a vulnerability to compromise data were six months old, or older -- meaning that patching quickly isn't the answer, but patching completely and diligently is.
- Assure HR Uses Effective Termination Procedures. The credentials of recently terminated employees were used to carry out security compromises in several of the insider cases this year. Businesses should make sure formal and comprehensive employee-termination procedures are in place for disabling user accounts and removal of all access permissions.
Enable Application Logs and Monitor. Attacks are moving up the computing structure to the application layer. Organizations should have a standard log-review policy that requires an organization to review such data beyond network, operating system and firewall logs to include remote access services, Web applications, databases and other critical applications.
Define "Suspicious" and "Anomalous" (then look for whatever "it" is). The increasingly targeted and sophisticated attacks often occur to organizations storing large quantities of data valued by the criminal community. Organizations should be prepared to defend against and detect very determined, well-funded, skilled and targeted attacks.
Tippett concluded, "This report clearly shows it's not about clever or complex security protection measures. It really boils down to ensuring the basics are met from planning to implementation to monitoring of the data."

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(NOTE: To view a social media release that includes related online resources such as video and audio podcasts, visit: www.verizonbusiness.com/about/news/displaynews.xml?newsid=25282) High-resolution charts and graphs supporting the data breach report are available at:
www.newscom.com/cgi-bin/prnh/20090415/NYW002-a
www.newscom.com/cgi-bin/prnh/20090415/NYW002-b
www.newscom.com/cgi-bin/prnh/20090415/NYW002-c