Security Experts:

Secret Service: Over 1,000 Business Infected With "Backoff" Point-of-sale Malware

The United States Secret Service estimated more than 1,000 businesses have been infected by the "Backoff" point-of-sale malware, and many of them are unaware they have been compromised, according to a Department of Homeland Security advisory.

"Over the past year, the Secret Service has responded to network intrusions at numerous businesses throughout the United States that have been impacted by the Backoff malware," DHS said in its advisory. "Seven PoS system providers/vendors have confirmed that they have had multiple clients affected."

Backoff POS MalwareBackoff is a RAM scraper, or malware which can capture data stored in memory. It can log keystrokes and collect payment card details stored in memory, shortly after it is swiped and before the information is encrypted. Law enforcement authorities and researchers at Trustwave first encountered Backoff in October 2013, but most major antivirus tools did not detect it until this month. Karl Sigler, the threat intelligence manager at Trustwave said Backoff was of a new malware family.

The United States Computer Emergency Readiness Team (US-CERT) also issued an alert on Friday about Backoff. "US-CERT is aware of Backoff malware compromising a significant number of major enterprise networks as well as small and medium businesses," the advisory said.

US-CERT, DHS, the Secret Service, the National Cybersecurity and Communications Integration Center (NCCIC), and several other agencies, jointly issued a detailed advisory on July 31 describing Backoff's capabilities and indicators of compromise. It was this advisory which led The UPS Store, a wholly owned subsidiary of the United Parcel Service (UPS) to check its networks earlier this month and discover the malware infection affecting 51 stores. While The UPS Store did not explicitly say it had been infected by Backoff, the company's description of the malware and the timing of the advisory make it seem very likely.

Point-of-sale malware generally can log keystrokes, scrape payment card details from memory, and communicate with a remote command-and-control server. In the case of Backoff, attackers use publicly available tools to identify businesses that use remote desktop applications such as Microsoft's Remote Desktop, Apple Remote Desktop, Chrome Remote Desktop, Splashtop 2, Pulseway and LogMeIn, according to the July 31 advisory. The attackers try to brute-force logins for the remote desktop software to gain access to the corporate network.

Once they gain a foothold, the attackers move through the network until it finds point-of-sale systems. They can then harvest payment card data and send it out of the network over an encrypted connection to servers under their control, according to the July 31 advisory.

Companies generally won't know they are infected with Backoff unless they are actually searching for the malware. Until fairly recently, antivirus tools did not detect it. "The Secret Service is active in contacting impacted businesses, as they are identified, and continues to work with and support those businesses that have been impacted by this PoS malware," DHS said in its advisory.

Despite of—or perhaps because of—the malware's stealthy nature, the July advisory had some recommendations for businesses to protect themselves from a potential Backoff breach.

Companies should limit the number of vendors who have access to their internal network, passwords should be long and complex, use two-factor authentication, and lock users out of their accounts after multiple login attempts. Point-of-sale systems should be on a different network from corporate, and payment cards should be encrypted right on the reader and not wait until it reaches the point-of-sale software, the advisory said.

"DHS strongly recommends actively contacting your IT team, antivirus vendor, managed service provider, and/or point of sale system vendor to assess whether your assets may be vulnerable and/or compromised," the agency said in its advisory.

The New York Times claimed Backoff had also infected Target in the fall of 2013, but did not cite a source of this claim. Previous reports had indicated Target had been infected by BlackPOS, another type of RAM scraping malware.

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Fahmida Y. Rashid is a Senior Contributing Writer for SecurityWeek. She has experience writing and reviewing security, core Internet infrastructure, open source, networking, and storage. Before setting out her journalism shingle, she spent nine years as a help-desk technician, software and Web application developer, network administrator, and technology consultant.