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The ranking member of the Senate Homeland Security and Governmental Affairs Committee told the chief executive of Heartland Payment Systems that she was "astonished" a breach the company's information system lasted for nearly 1½ years without being detected. At a panel hearing Monday on protecting industry against growing cyber threats, Sen. Susan Collins, R.-Maine, asked Heartland CEO Robert Carr to explain how this delay happened. Carr responded that a breach is usually detected when the processing payer is notified of fraudulent use of cards, and that didn't occur until the end of 2008. "Isn't there software in the systems to detect such a breach?" Collins asked.

Online crime is increasingly hitting small and mid-size companies in the U.S., draining those entities' bank accounts through fraudulent transfers. The problem has gotten so bad that a financial services group recently sent out a warning about the trend, and the Federal Deposit Insurance Corporation (FDIC) issued an alert today. "In the past six months, financial institutions, security companies, the media and law enforcement agencies are all reporting a significant increase in funds transfer fraud involving the exploitation of valid banking credentials belonging to small and medium sized businesses," says a bulletin sent on Aug. 21 to member financial institutions by the Financial Services Information Sharing and Analysis Center, (FS-ISAC). The FS-ISAC is part of the government-private industry umbrella working with the Department of Homeland Security and Treasury Department to share information about critical threats to the country's infrastructure. The member-only alert described the problem and told its members to implement many of the precautions and monitoring currently used to detect consumer bank and credit card fraud.

"The inspector general of the National Archives and Records Administration is investigating a potential data breach affecting tens of millions of records about U.S. military veterans, Wired.com has learned. The issue involves a defective hard drive the agency sent back to its vendor for repair and recycling without first destroying the data. The hard drive helped power eVetRecs, the system veterans use to request copies of their health records and discharge papers. When the drive failed in November of last year, the agency returned the drive to GMRI, the contractor that sold it to them, for repair. GMRI determined it couldn't be fixed, and ultimately passed it to another firm to be recycled. The incident was reported to NARA's inspector general by Hank Bellomy, a NARA IT manager, who charges that the move put 70 million veterans at risk of identity theft, and that NARA's practice of returning hard drives unsanitized was symptomatic of an irresponsible security mindset unbecoming to America's record-keeping agency."

"Beginning next week, the FTC will hold a series of public roundtables covering the growing number of challenges to consumer privacy on the Internet. Dubbed "Exploring Privacy," the daylong discussions will focus on "the collection and use of information by retailers, data brokers, third-party applications, and other diverse businesses." Hold that yawn. Behavioral tracking and ad targeting have everything to do with the pesky "Warning!" pop-up blinking behind your browser window right now. The one that could shatter your online privacy. In advance of the roundtables, Fast Company spoke with online privacy advocates Jules Polonetsky, co-chair and director of the Future of Privacy Forum, and Ari Schwartz, vice president and chief operating officer of the Center for Democracy and Technology. Below, Polonetsky and Schwartz highlight five of most nefarious techniques used to trick and track you." 1. "Malvertising Gangs" 2. Flash Cookies 3. "Cookie appends" 4. Personal Health Data 5. ISP Tracking

The global recession manifests itself in big and small ways, most gloomy, some quirky and often reflecting the inventive human spirit. Here is a look at some signs of the times. * With record defaults on consumer loans, collection agencies in the United States are going to extra lengths to recover the money. Illinois resident and Mercedes driver James Ricobene says an agency hired by JP Morgan Chase left a post on his daughter's MySpace page threatening action that could lead to prison, unless she contacted the agency within five days about its efforts to repossess her father's car. Ricobene has sued the collection agency and JP Morgan for libel, fraud and invasion of privacy.

With so many workers being axed, the threat to sensitive customer, corporate, military information should be examined. Once workers leave with sensitive information, good luck controlling exposure. Cross International borders and the issue potentially expands into an national "incident" with dire consequences for corporate reputation. Protectionism vs Patriotism. Issues raised in the Great Depression revisited with more impact due to expansion of the economy to global status.

Microsoft Corp.'s plan to eliminate U.S. workers after lobbying for more foreigner visas is stirring resentment among lawmakers and employees. As many as 5,000 employees are being shown the door at Microsoft, which uses more H1-B guest-worker visas than any other U.S. company. Some employees and politicians say Microsoft should get rid of foreigners first. "If they lay people off, are they going to think of America first or are they going to think of the world first?" Chuck Grassley, a Republican Senator from Iowa, said in an interview. He sent a letter to Microsoft Chief Executive Officer Steve Ballmer the day after Microsoft announced the job cuts last month, demanding Ballmer fire visa holders first. Across the technology industry, some of the biggest users of H1-B visas are cutting jobs, including Intel Corp., International Business Machines Corp. and Hewlett-Packard Co. The firings at Microsoft, the world's largest software maker, came less than a year after Chairman Bill Gates lobbied Congress for an expansion of the visa program. Even before Microsoft announced the cuts, its first-ever companywide layoffs, comments on a blog run by an anonymous Microsoft worker angrily debated getting rid of guest workers first. The author of the Mini-Microsoft blog eventually had to censor and then completely block all arguments about visas, after the conversation "got downright nasty."

In Deloitte's sixth annual Global Security Survey, people are the problem. "[P]eople continue to be an organization's greatest asset as well as its greatest worry," Adel Melek, global leader of security and privacy services at Deloitte Touche Tohmatsu, said in the report. "That has not changed from 2007. What has changed is the environment. The economic meltdown was not at its peak when respondents took this survey. If there was ever an environment more likely to facilitate an organization's people being distracted, nervous, fearful, or disgruntled, this is it. To state that security vigilance is even more important at a time like this is an understatement." On one level, that couldn't be more obvious: It's not as if anyone worries about squirrels hacking servers; security has always been about people. (Robots, the report says, are unlikely to replace the human workforce during the lifetime of anyone reading the report. Finally, some good employment news.) Yet despite the obviousness of the problem, the obvious solution -- complete denial of access -- doesn't work. People use computers and computers are more useful when connected and it just gets worse from there. That may explain why identity and access management remained top of mind for survey respondents. Deloitte's survey, drawn from major financial companies around the globe, focuses on governance, investment, risk, use of security technologies, quality of operations, and privacy. It includes some good news -- external breaches have declined sharply over the past year -- and troublesome news -- fewer companies say they have the commitment and funding to address regulatory compliance. In terms of risk, specifically information systems failure, people are identified as the most significant vulnerability. "Human error is overwhelmingly stated as the greatest weakness this year (86%), followed by technology (a distant 63%)," the report states. It attributes the rising risk to increased adoption of new techno

The software vendor's commissioned research will be revealed during a panel discussion with leaders from the California Office of Privacy Protection, Intel, and MySpace. Wednesday, Jan. 28, 2009, is Data Privacy Day, and to mark the occasion, Microsoft is participating in a panel discussion in San Francisco with privacy experts from the California Office of Privacy Protection, the Center for Democracy and Technology, Intel (NSDQ: INTC), and MySpace. Better this week than last, when Heartland Payment Systems and Monster.com disclosed major malware-driven data breaches that promise privacy headaches or worse for affected account holders. It is such incidents that worry Peter Cullen, Microsoft (NSDQ: MSFT)'s chief privacy strategist, because of the impact they can have on consumer trust. "Trust is becoming increasingly important," he said. That's why Data Privacy Day exists. Microsoft and other organizations recognize that without trust, the online economy only gets worse for everyone. Cullen explained that Data Privacy Day represents a global opportunity for organizations and individuals to come together to discuss how to better educate consumers about data privacy issues. One way to advance the discussion, Cullen said, was to commission some research, which Microsoft did in two cities, in California and Texas. "We wanted to understand how different segments of consumers, from teens to professionals to boomers, thought about privacy," he said. "There were some rather interesting results that came out of this." "Our hypothesis is that across these three segments, there would be different ways of thinking about these things," said Cullen. "We were really surprised to learn there's a large degree of similarity in the way people think about privacy."

Beware of web sites offering free money Iain Thomson in San Francisco vnunet.com, 04 Mar 2009 The Federal Trade Commission (FTC) is warning of a rash of online scams offering payouts under the economic stimulus plan passed by Congress. Businesses and individuals are being targeted by the scammers using web sites and emails, the organisation warned. Recipients are typically offered 'grants' from the government, and must either surrender bank details to get the funds or make a small payment. Advertisement"Web sites may advertise that they can help you get money from the stimulus fund. Many use deceptive names or images of president Obama and vice president Biden to suggest that they are legitimate. They are not," said Eileen Harrington, acting director of the FTC's Bureau of Consumer Protection. "Don't fall for it. If you do, you'll get scammed." Several variants have also been discovered that use malware to steal important data. These include pages that purport to offer links to sites that show how to get the federal funds. The pages are loaded with malware that can penetrate an improperly patched browser. "Consumers who may already have fallen for these scams should carefully check their credit card bills for unauthorised charges, and report the scam to the FTC," said Harrington.

Yet another breach of sensitive, unencrypted data is making news in the United Kingdom. This time the breach puts Royal Air Force staff at serious risk of being targeted for blackmail by foreign intelligence services or others. The breach involves audio recordings with high-ranking air force officers who were being interviewed in-depth for a security clearance. In the interviews, the officers disclosed information about extra-marital affairs, drug abuse, visits to prostitutes, medical conditions, criminal convictions and debt histories - information the military needed to determine their security risk. The recordings were stored on three unencrypted hard drives that disappeared last year. The interviews were conducted to ensure that the officers "can be trusted with sensitive government information and property," the Ministry of Defense said. But the interviews have now become a huge security risk for the officers and the Ministry of Defence, which has proven itself to be untrustworthy when it comes to guarding sensitive information and property.

Veterans suffering anxiety and paranoia following the theft of a government hard drive containing the medical histories and Social Security numbers of 198,000 of their brethren cannot recover financial damages, a federal appeals court says. The 11th U.S. Circuit Court of Appeals, in largely dismissing a class-action, ruled Wednesday that the veterans could recoup at least $1,000 under the Privacy Act if they could show financial damages, not mental anguish. What's more, the Atlanta-based court noted that the veterans - some already suffering post-traumatic stress syndrome from their Vietnam War days - likely could recover damages for mental anguish associated with the data breach if the lawsuit was before a different court. That's because the courts of appeal across the nation have issued conflicting interpretations of the Privacy Act of 1974, which allows people to sue the government for privacy breaches and recover "actual damages." Precedent in the 11th Circuit, which includes Alabama, Florida and Georgia, interprets "actual damages" as money losses only. So 198,000 veterans - whose life history was on a hard drive that vanished from a Birmingham, Alabama Veterans Administration hospital - are out of luck, even if their war-time paranoia was exacerbated by the breach. The 11th Circuit noted (.pdf) that the 5th U.S. Circuit Court of Appeals and the 10th U.S. Circuit Court of Appeals "do not restrict 'actual damages' under the Privacy Act to pecuniary losses." And the Supreme Court has refused to resolve the circuit splits.

Compared to other key corporate executives, CEOs appear to underestimate the IT security risks faced by their own organizations, according to a survey of C-level executives released today by the Ponemon Institute. The Ponemon survey (download PDF) of 213 CEOs, CIOs, COOs and other senior executives reveals what appears to be a perception gap between CEOs and other senior managers concerning information security issues. For instance, 48% of CEOs surveyed said they believe hackers rarely try to access corporate data. On the other hand, some 53% of other C-level executives believe that their company's data is under attack on a daily or even hourly basis. The survey also found that the top executives were less aware of specific security incidents at their companies than other C-level executives and are more confident that data breaches can be easily avoided. Ponemon found that CEOs tend to view data protection efforts as vital to maintaining good customer satisfaction levels and to the company's brand image. The other managers, however, were more likely to say that the most important role for data security efforts is to satisfy regulatory requirements. The survey also found that CEOs and other top managers differed in their opinion of who is responsible for protecting corporate data. While eight out of 10 respondents said they believe there is one person responsible for data protection in their organization, there was a sharp difference of opinion on just who that person was. More than half of the CEOs said that CIOs are responsible for protecting data at their companies; only 24% of other senior managers felt the same way. And 85% of respondents said someone else would be held responsible for a data breach. "On the issue of accountability, we found that while people acknowledged that data breaches were a problem, very few people felt that if [their company] suffered a breach, they would be held responsible," said Larry Ponemon, founder of the Ponemon Institute.

Compared to other key corporate executives, CEOs appear to underestimate the IT security risks faced by their own organizations, according to a survey of C-level executives released today by the Ponemon Institute. The Ponemon survey (download PDF) of 213 CEOs, CIOs, COOs and other senior executives reveals what appears to be a perception gap between CEOs and other senior managers concerning information security issues. For instance, 48% of CEOs surveyed said they believe hackers rarely try to access corporate data. On the other hand, some 53% of other C-level executives believe that their company's data is under attack on a daily or even hourly basis. The survey also found that the top executives were less aware of specific security incidents at their companies than other C-level executives and are more confident that data breaches can be easily avoided. Ponemon found that CEOs tend to view data protection efforts as vital to maintaining good customer satisfaction levels and to the company's brand image. The other managers, however, were more likely to say that the most important role for data security efforts is to satisfy regulatory requirements. The survey also found that CEOs and other top managers differed in their opinion of who is responsible for protecting corporate data. While eight out of 10 respondents said they believe there is one person responsible for data protection in their organization, there was a sharp difference of opinion on just who that person was. More than half of the CEOs said that CIOs are responsible for protecting data at their companies; only 24% of other senior managers felt the same way. And 85% of respondents said someone else would be held responsible for a data breach. "On the issue of accountability, we found that while people acknowledged that data breaches were a problem, very few people felt that if [their company] suffered a breach, they would be held responsible," said Larry Ponemon, founder of the Ponemon Institute.

"Want to know how much phone companies and internet service providers charge to funnel your private communications or records to U.S. law enforcement and spy agencies? That's the question muckraker and Indiana University graduate student Christopher Soghoian asked all agencies within the Department of Justice, under a Freedom of Information Act (FOIA) request filed a few months ago. But before the agencies could provide the data, Verizon and Yahoo intervened and filed an objection on grounds that, among other things, they would be ridiculed and publicly shamed were their surveillance price sheets made public. Yahoo writes in its 12-page objection letter (.pdf), that if its pricing information were disclosed to Soghoian, he would use it "to 'shame' Yahoo! and other companies - and to 'shock' their customers.""