Security Experts:

Kmart Payment Systems Infected With Malware

Kmart again hit by hackers

Big box department store chain Kmart informed customers on Wednesday that cybercriminals may have stolen their credit or debit card data after installing malware on the company’s payment processing systems.

Kmart, a subsidiary of Sears Holdings, has not provided any information on which stores are affected and for how long hackers had access to its systems. The retailer operates more than 700 stores, but blogger Brian Krebs learned from his sources in the financial industry that the breach does not appear to impact all locations.

It’s unclear what point-of-sale (PoS) malware has been used in the attack, but the retailer has described it as “a new form of malware” and “undetectable by current antivirus systems.”

The company’s investigation showed that names, addresses, social security numbers, dates of birth, email addresses and other personally identifiable information (PII) have not been compromised. Kmart believes the attackers may have only accessed payment card numbers.

“All Kmart stores were EMV ‘Chip and Pin’ technology enabled during the time that the breach occurred, and we believe the exposure to cardholder data that can be used to create counterfeit cards is limited,” said Gareth Glynne, senior VP of retail operations at Sears & Kmart. “There is no evidence that or Sears customers were impacted nor that debit PIN numbers were compromised.”

Kmart is working with law enforcement authorities, banking partners and cyber security firms to investigate the incident. The retailer is not offering any credit monitoring services to affected customers given that only limited information has been exposed, but it has advised them to review and monitor their payment card statements.

This is not the first time Kmart discloses a data breach. In October 2014, the company told customers that their credit and debit cards may have been stolen after hackers installed malware on payment systems.

In both incidents, the company described the malware as being “undetectable by current antivirus systems” and in both cases it claimed that only card numbers were compromised. Kmart said the latest breach does not appear to be linked to a previous incident.

“I think the single most important piece of information that we know so far is that this could have been much, much worse,” said Richard Henderson, global security strategist at Absolute. “If KMart did not have EMV-enabled terminals in their stores, forcing customers with chip cards to swipe their stripe, then the impact may have been substantially larger. It's critical that we continue the slow march in the US to full EMV adoption. While EMV is by no means infallible, it is leagues better than the ancient mag stripe technology that continues to be exploited by attackers on a regular basis."

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Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.