Kmart Announces Data Breach, Joins Growing List of Attacked Retailers

October 14, 2014 @ 4:26 PM
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2 min read

On Friday, Kmart became the latest in a string of major U.S. retailers to announce that cyberattackers had gained access to customer credit and debit card data after breaking into its point-of-sale (POS) network.

This breach is similar to those announced by Home Depot, Dairy Queen, SuperValu, UPS and several others in recent months. It is sure to heighten concerns about the continued vulnerability of U.S. payment system networks to cyberattacks nearly one year after a massive intrusion at Target exposed cardholder and other data belonging to over 100 million people.

In a prepared statement, Kmart’s parent company, Sears Holdings, said the intrusion appears to have occurred in early September. However, it remained undetected by Kmart’s information technology team until last Thursday. According to Sears, the cybercriminals infected Kmart’s store payment data systems with a form of malware that was untraceable by current antivirus software tools.

The attackers obtained certain customer credit and debit card data, but no debit card PINs, email addresses or Social Security numbers were compromised in the incident, Sears said. The number of Kmart store locations or customers that may have been affected by the breach was not disclosed, and no information is yet available on how the attackers gained access to Kmart’s POS network. The company joins a rapidly growing list of retailers that have been victimized by sophisticated POS system attacks in recent months.

Earlier this year, the U.S. Department of Homeland Security and the U.S. Secret Service warned retailers of a data-stealing malware tool named Backoff that is being widely used by cybercriminals to steal data from POS systems. According to the two agencies, Backoff has infected systems belonging to at least 1,000 U.S. businesses, though some believe the actual number may be much greater.

Seven POS system vendors have confirmed that they have had multiple clients affected by Backoff. In many cases, the attackers have taken advantage of popular remote access tools such as Microsoft’s Remote Desktop, Chrome Remote Desktop and LogMeIn to gain access to privileged user accounts, which they have then used to extract cardholder data.

Kmart has not yet disclosed the nature of the malware that was used in the attack against its POS network, so it’s unclear whether the retailer was a victim of Backoff. Among the recent victims, only Dairy Queen identified the data-stealing malware as Backoff; however, given the earlier government warnings, it is highly likely that at least some of the others that have disclosed breaches so far are also victims of Backoff.

What’s worse, considering that at least 1,000 U.S. businesses have been hit by the malware, it’s a near certainty that several more retailers could announce similar breaches in the coming months.

Image Source: Flickr

Jaikumar Vijayan
Independent Journalist & Tech Content Creation Specialist

Jaikumar Vijayan is an award-winning technology journalist with nearly 25 years of experience in IT trade journalism. He was most recently a Senior Editor at...
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