Fred’s Inc. Reveals Cybercriminal Breach

THE WALL STREET JOURNAL reported on 10th August, 2015 stating that Fred's Inc. recently disclosed that hackers had infiltrated two servers processing electronic payments underlying the mounting threat of cyber-security intrusions.

The company said in a regulatory filing that an inquiry by a third-party cyber-security firm intercepted malware designed to hunt for so-called Track 2 data.

Thieves use Track 2 data along with the saved information on magnetic strip of a card containing card number, verification code and expiry date to create forged cards. Names of cardholders are component of the professed Track 1 data.

Fred's is a combination of pharmacy, dollar store and mass merchant and it said that the malware seemed to have been functional from 23rd March to 8th April, 2015 in one of the servers and till 24th April, 2015 in the second server. The firm confirmed that it did not find any evidence of removal of customer's data from the company's system.

Fred's runs 650 stores with discounts mostly situated in southeastern part of U.S. It is just one of several retailers which have recently fought with cybercriminals who have penetrated their payment systems with malware stealing details of payment card.

Neiman Marcus, Target, Michaels, White Lodging and The UPS Store are among the victims. In many cases, attackers targeted point-of-sale (POS) systems with Ram-scraping malware collecting unencrypted payment details while they are briefly held in the memory of the computer.

The company said that it could not evaluate the quantum of loss due to the suspected breach although it said that it has cyber-security risk insurance which may cover some expenses towards this breach.

Databreaches.net published news in the second half of June 2015 quoting regret in a statement issued by Fred's as "Fred's Inc. recently became aware of a potential data security incident and it has launched an internal investigation immediately to determine the scope of the issue. We wish to assure our customers that protecting their credentials is one of our top most priorities and we are taking up this matter very seriously. Hence, it will be difficult to determine surely about the scope or nature of any potential incident till the investigation is completed. However, we will continue to work carefully to address any potential issues which may affect our customers."

» SPAMfighter News - 8/21/2015