More well-known US retailers victims of cyber attacks

DELAYED DISCLOSURE

Retailers are often reluctant to report breaches out of concern it could hurt their businesses. Target only acknowledged its 2013 attack after security blogger Brian Krebs reported the breach, prompting inquiries from journalists and investors.

Neiman Marcus said an outside forensics firm discovered evidence on January 1 that indicated the retailer had been the victim of a cyber attack. It disclosed the breach nine days later, after another inquiry from Krebs, who was following up on reports about a surge in fraudulent charges traced to the retailer.

Target and J.C. Penney Co Inc. waited more than two years to admit that they were victims in 2007 of notorious hacker Albert Gonzalez, who was accused of masterminding the theft and reselling of millions of credit cards and ATM numbers.

During his trial the companies were represented by lawyers who did not identify their clients as Target and J.C Penney.

Doug Johnson, vice president of risk management policy with the American Bankers Association, said banks and credit card firms like Visa are forbidden from naming merchants that have been breached, unless they disclose it themselves.

"It is really frustrating to the bank and also the customer," Johnson said.

One of the sources who told Reuters about the recent rash of attacks said the memory parsing malware cited in the Visa reports was among the tools that the hackers had used, but said they used other techniques as well.

Target spokeswoman Molly Snyder said the retailer is not commenting on the company's investigation of the breach.

"This continues to be an active and ongoing investigation. It would be inappropriate to discuss details at this point."

Avivah Litan, a security analyst for Stamford, Connecticut-based Gartner information technology research firm, said she learned about a separate set of breaches, dating back no more than a few months before the November 28 Thanksgiving Day start of the holiday shopping season, from a forensics investigator. She declined to provide his name.

"Target was not the only retailer who got hit, but they got hit the biggest," Litan said.

Investigators believe that the early series of attacks on retailers staged before late November were mostly used as trial attacks to help the hackers perfect new techniques they then used against Target, stealing payment cards at unprecedented speed, Litan said.

Chris Gray, director of Denver, Colorado -based Accuvant information security firm's risk and compliance practice, said that sophisticated cyber crime groups do that because they only have once chance to get it right before victims catch on.

"You want to test it and make sure it works," Gray said. "Then you push it out at the appropriate time and do as much damage as you can."