Hackers accessed Goodwill hosting provider for 18 months before card breach

Hackers evaded security systems for a year-and-a-half at a hosting center that processed payment cards for Goodwill Industries, using the same type of malware that struck Target and other major retailers to steal card data, according to the charity’s software vendor.

In its first public statement since being identified by Goodwill as its technology partner, C&K Systems of Murrells Inlet, S.C., said two other customers were also affected by the unauthorized access, though it didn’t name them.

Goodwill, which sells donated clothing, said in July that federal authorities were investigating a possible payment card breach at its U.S. outlets. It’s one of many retailers, including Target, Neiman Marcus, Michaels, P.F. Chang’s China Bistro and Sally Beauty, that have disclosed data breaches since December.

In a rare move, Goodwill identified C&K as one of the contractors that provided payment processing for 20 of its stores, and said those stores had since stopped using the company’s services.

C&K couldn’t be immediately reached by phone Tuesday. According to its statement, the company’s managed services environment was breached “intermittently” between Feb. 10, 2013, and Aug. 14 of this year. Of the “many” payment cards that may have been compromised, it said, it knows of “less than 25” so far that have been used fraudulently.

The hosted systems were running software from “a leading POS [point-of-sale] vendor” that C&K said met the Payment Card Industry’s Data Security Standards (PCI-DSS). Retailers are required to meet those standards or face greater penalties from card companies if a breach occurs.

An independent auditor determined that the card data was stolen using a malicious software program, RawPOS, which scrapes data from a point-of-sale terminal’s memory. A similar type of malware, known as a RAM scraper, was blamed for the Target breach and others.

C&K said its security software had been unable to detect the RawPOS variant until Sept. 5. C&K has since put in place new security controls that will detect unauthorized access, it said, “along with cutting-edge technologies to identify potential zero-day advanced persistent threats.”

Its unidentified POS vendor is also shoring up its systems, by rolling out a point-to-point encryption system, C&K said. Security experts have said that technology can defeat RAM scrapers since only encrypted data is held in RAM.

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