John Clark COO,

1. PCI Security and Compliance CCIA Fall Meeting – 7th October 2011 John Clark COO,

2. AGENDA • ExoIS • PCI Compliance • Rules • Breaches • Process • Costs • Educational Institution – Example • Achieving Compliance

3. Based in Silicon Valley • Operating for 10+ years • Practices: • PCI Qualified Security Assessor (QSA) • PeepSafe Secure Portal • Information Security and Compliance Services • Secure Cloud Services • IT Support Services www.ExoIS.com

4. PCI (Payment Card Industry)101 • What are Payment Cards? • Credit, Debit, and Cash Cards (prepaid) • Can be Consumer and Commercial based (Corporate Cards & P-Cards) • Payment Cards Structure and Relationships? • Payment Card Brands • Cardholders • Issuers • Merchants • Acquirer (aka Payment Processor) • Usually the Merchant’s Bank

5. PCI 101 (Continued) Payment Card Transaction Lifecycle

6. What it means to be PCI compliant The organization must comply with the Payment Card Industry Data Security Standards (PCI-DSS) for everything that is “In Scope” Any system that (or any system that is connected to a system that) stores, processes or transmits cardholder data is considered to be “In Scope” • The PCI-DSS is a GLOBAL standard that requires that organizations handling payment card data: • Build and maintain a secure network • Protect cardholder data • Maintain a vulnerability management program • Implement strong access control measures • Regularly monitor and test networks • Develop and maintain an information security policy

7. Payment Card • Total cards in circulation in the US in 2010: • Visa: 397 million • Mastercard 123 million

8. Cardholder Data and Sensitive Authentication Data Elements • Cardholder data is defined as the primary account number (“PAN,” or credit card number) and other data obtained as part of a payment transaction, including the following data elements: • PAN • Cardholder Name • Expiration Date • Service Code • Sensitive Authentication Data: • (1) full magnetic stripe data • (2) CAV2/CVC2/CVV2/CID • (3) PINs/PIN blocks) • The Primary Account Number (PAN) is the defining factor in the applicability of PCI DSS requirements and PA-DSS. • If PAN is not stored, processed, or transmitted, PCI DSS and PA-DSS do not apply. These data elements must be protected if stored in conjunction with the PAN These data elements must not be stored after authentication

9. Key Areas of PCI DSS: • Consists of 6 Domains, 12 Core Requirements and around 250 Controls • Updated annually based on incidents and comments from the PCI community members

10. What “Merchant Tier / Level” Are You? Note:Any merchant suffering from a Data Breach is automatically escalated to a Level 1 Merchant Status, which means annual on site PCI QSA assessments until further notice. Also:if you are deemed Level 1 from any Payment Brand you will be Level 1 across the board All Levels:Quarterly network scan by ASV except for Visa Level 4 & Amex Level 3 (recommended)

11. Payment Card Industry - PCI • If you store, process or transmit cardholder data you are contractually required to adhere to the PCI Data Security Standards (PCI-DSS). • 85 percent of data breaches occur at Level 4 merchants • Any data breach results in escalation to Level 1 merchant (annual, on-site PCI QSA assessments until further notice) • The fines and compensation imposed from the Payment Brands – coupled with State and Federal fines – can be substantial.

12. US Contractual Basis vs Regulatory Basis Non Compliance to PCI can lead to ramifications at two levels: Contractual & Regulatory • Contractual: • PCI is a contractual obligation and therefore legally binding • Fines and increased commission levels • Non compliance / data breaches can cause card processing to be revoked • Law suits will result from data breaches • Brands will elevate any company with a breach to Tier 1 Merchant status for PCI-DSS purposes • Regulatory: • Incidents involving Payments Cards can trigger Privacy Laws - Data Breach Notification – currently required in over 45 states • Within the USA – if the data breach spans multiple states, it becomes a Federal issue

13. Largest Credit Card Breach Results in over $110 Million in Fines Heartland Payment Systems (one of the largest payment processors in U.S.) has paid over $110 million in fines and $26 million in legal costs due to a security breach where hackers stole data from over 130 million credit and debit cards.  2008, 2009?

14. Largest Data Breach in Retail Over $75M in fines / settlements • Mag-stripe data involving 65 million Visa cards were exposed, resulting in a $500,000 fine “due to the seriousness of this security incident and the impact on the Visa system.” A separate $380,000 fine was imposed for “TJX’s failure to cease storing prohibited data.” TJX struck a $40.9 million settlement with Visa to compensate Visa card issuers for breach-related costs. • Data from 29 million MasterCard cards exposed. TJX settled with MasterCard for $24 million. • TJ Maxx stores settled charges with 41 states and agreed to pay $9.75 million to the states and to implement and maintain a comprehensive information security program, designed to safeguard consumer data and address any weaknesses in TJX's systems in place at the time of the breach. 2005, 2006, 2007?

15. Data Breaches – Business Impact Data Breach  Your organization will become a Level 1 Merchant • Tangible Costs: • The cost of a data breach for a Level 4 merchant averages $36,000 and can be as high as $50,000 (or more). In other words, more than enough to cripple—or even destroy—a small business • $3 to $10 per card for replacement costs • $5,000 to $50,000 (or more) in compliance fines • Loss of revenue from suspension of credit card transactions / blacklisting • Additional fines based on the actual fraudulent use of the cards, which will vary depending on the number of cards exposed • Average cost per data item lost = $243 (2009 Ponemon Institute) • Intangible Costs: • Deployment of mitigation and root cause fixes • Lost revenue due to negative impact to brand / market share • Ongoing impact from press coverage on data breaches

16. At 26th September 2011 ….. Running Total of Records Breached = 535,697,538from 2,702 Data Breaches made public since 2005 http://www.privacyrights.org/sites/default/files/static/Chronology-of-Data-Breaches_-_Privacy-Rights-Clearinghouse.pdf Note: US figures only

17. Latest Trends in Data Breaches • Lost / stolen laptops with data (includes drives / CDs / back-ups, etc.) • Vendor / service provider was breached • Break-ins / theft of assets – computers / hard copy records • External Hacks / Malware into company assets • Logical access / user privileges • Improper disposal of assets / paper records

18. Typical Security and Compliance Activities Certification Health Check or Audit Remediation Projects Annual Assessment Gap Analysis Vulnerability Scanning Remediation report Penetration Testing

19. Non-technical analogy You have one leg shorter than the other Remediation Projects Health Check or Audit Add 3” to your left leg or take 3” off your right leg Gap Analysis Buying and fitting the built-up shoe Get a built-up left shoe @ $400 or surgery on your right leg @ $9,500 Remediation report

20. A Typical Educational Institution (Several Campuses and many separate departments accepting payment cards) Most likely set of findings: • Need policies, procedures and awareness program • Multiple collection points (email, fax, phone) • Extensive paper trails with no business justification • Unknown cardholder data in ‘out of scope’ systems • Unsolicited, pervasive email with cardholder data • No vendor management • Third party e-Commerce sites used to enter cardholder data from corporate network

21. Understanding PCI Scope • Consider how many systems can be involved when you • Take cardholder data over the phone? • Receive cardholder data by fax? • Receive cardholder data in email? • Store, process or transmit cardholder data? Ask yourself if there is any way to cost effectively reduce or remove any or all of these applications, systems and processes from PCI scope? • Soliciting cardholder data over unsecured messaging systems is actually PROHIBITED.

22. Security Policies & Administration Full Policies and Standards Lifecycle Management Recurring operational security tasks Usage policies for critical employee-facing technologies (email, fax, voice, hard copy) Define roles & responsibilities Assign ownership Employee screening Incident Response Program Annual Risk Assessments etc The more the environment is de-scoped or outsourced the bigger the reduction in overhead! 22

23. Security Awareness Programs A strong security policy sets the security tone for the whole company and informs employees what is expected of them. All employees need to be aware of the sensitivity of data and their responsibilities for protecting it (training program with records). For the purposes of this requirement, “employees” refers to full-time and part-time employees, temporary employees and personnel, and contractors and consultants who are “resident” on the company’s site. Induction, training and campaigns must be ongoing. Most effective method is CBT (Computer Based Training) 23

24. Discovery and Removal of Cardholder Data • Payment card numbers are most often found in the following locations: • Payment server log files • Staff documents (Spreadsheets, Word documents) • Email data files (Inbox and Sent Items) • Application Databases (Flat files, Text Files) • Browser History and File Cache • Tools exist for identifying payment card information across the computer systems of an entire organization • Tools produce a report of this status for use in any security compliance audit • Prevent re-contamination (Gateway Filter) 24

25. Vendor Management • Develop controls / policies and procedures for reviewing / approving / audit / de-selection of Vendors / Suppliers that are involved in capturing / storing / transmitting / disposal of CHD • Maintain records of annual PCI compliance / certifications for each vendor. • Ensure that contractual requirements / purchasing terms and conditions flow down to the suppliers / vendors and reflect the appropriate requirements of PCI-DSS • Maintain a centrally controlled list of Approved Vendors for PCI-DSS that is available to all departments with FHDA

26. Vendor Security Management Tool

27. Corporate Compliance? Getting the organization’s In Scope systems and processes into compliance can be a massive undertaking • The compliance projects usually are: • Very large (hundreds of man years of effort) • Time consuming (multiple years in duration) • Resource intensive (require headcount & specific skill sets) • Expensive ($$$) • and always are: • Continuous (never ending) There is an alternative ……………

28. PCI Compliance Without the Expense of a New IT Infrastructure PCI Compliant SaaS solutions allowing organizations to de-scope entire functions and network segments with minimal cost and time without requirement to change internal systems or business processes. 28

29. PeepSafeTM • PeepSafeTM is hosted by a fully managed, level 1 PCI DSS compliant hosting provider. Managed controls include: • Firewalls and Intrusion Detection • Annual Penetration Testing • Anti-virus and Patch Management • Centralized Logging and Monitoring • Physical Security • Quarterly Scans (internal and external) • SSL Certification • File Integrity Monitoring (Note: These are ALL controls that would need to be implemented within your corporate environment if you did not use PeepSafeTM) 29

30. From At Riskto Out of Scope Exposed Phone Fax Email Store Process Transmit Secure Phone Fax Email Store Process Transmit PeepSafeTM is a fully managed, secure portal environment. Using PeepSafeTM to manage internal systems (networks, email, applications and databases) allows PCI involved systems and functions to move from “at risk” to “out of scope”. PeepSafeTMalso offers options to move employees’ desktops out of scope, and even, to move “employees” out of scope PeepSafeTMcan de-scope entire functions and network segments 30

31. Case Study 1 - Order Entry Without PeepSafeTM Browser Payment Gateway Site Process PCI Scope Agent connects to payment gateway to manually enter and process payment information. 31

32. Case Study 1 - Order Entry With PeepSafe™ SSLVPN PeepSafeTM Browser Payment Gateway Site PCI Compliant • Optional features: • Disabling of print screen • Cut and paste disabled between portal and desktop • End point security Virtual keyboard in the PeepSafeTM portal or manual entry of payment information into the telephone keypad de-scopes the desktop 32

33. Case Study 2 - Receive and Process Orders Without PeepSafeTM Browser Payment Gateway Site Phone Fax Email Store Process Transmit Fax PCI Scope Agent receives payment data from customers using corporate systems such as email, fax and stores in local file repositories . They connect to payment gateway from corporate network. 33

34. Case Study 2 - Receive and Process Orders With PeepSafeTM Browser Payment Gateway Site SSLVPN SSLVPN Fax PCI Compliant 34

35. In-Bound Gateway Filter Browser PeepSafe Remote Desktop Session Filter Quarantine PCI Scope Mail Messaging A Filter monitors traffic and redirects payment data to an encrypted Quarantine within the Portal, thereby ensuring that the corporate environment does not get brought back into scope. 35

36. In-Bound Gateway Filter: On-Premise Browser PeepSafe Remote Desktop Session Mail Filter Quarantine PCI Scope Mail Messaging A Filter monitors traffic and redirects payment data to an encrypted Quarantine within the Portal, thereby ensuring that the corporate environment does not get brought back into scope. 36

37. PeepSafeTM • PeepSafeTM internal systems are tested for compliance and validated according to specific customer needs • Minimal impact to existing systems  • Minimal changes to existing processes • Support for multiple existing environments • Payment gateway agnostic • Implementation in days (not months/years) • Optional enhancements to take desktops and even agents out of scope, including endpoint controls • Optional training and awareness, SAQ completion and policies and standards. 37

38. MickeyMinniePlutoHueyLouieDeweyDonaldGoofySacramento Password discovered in recent audit: 38

39. PCI Security and Compliance SUMMARY CCIA Fall Meeting – 7th October 2011 • Evaluate your own PCI situation • De-scope as much as possible • Remove historical prohibited data • Protect your environment (Gateway Filter) Do it now, do it quickly and keep doing it! Thank You! 39

40. Back-up 40

41. PCI-DSS Periodic - At Least Daily / Weekly Daily • 10.6 Review logs for all system components at least daily. Log reviews must include those servers that perform security functions like intrusion-detection system (IDS) and authentication, authorization, and accounting protocol (AAA) servers (for example, RADIUS). • Note: Log harvesting, parsing, and alerting tools may be used Weekly • 11.5 Verify the use of file-integrity monitoring products within the cardholder data environment by observing system settings and monitored files, as well as reviewing results from monitoring activities • Examples of files that should be monitored: • System executables • Application executables • Configuration and parameter files • Centrally stored, historical or archived, log and audit files

42. PCI-DSS Periodic - At Least Quarterly Quarterly • 3.1 Verify that policies and procedures include a programmatic (automatic) process to remove, at least on a quarterly basis, stored cardholder data that exceeds business retention requirements, or, alternatively, requirements for a review, conducted at least on a quarterly basis, to verify that stored cardholder data does not exceed business retention requirements • 8.5.5 Remove/disable inactive user accounts at least every 90 days • 8.5.9 Change user passwords at least every 90 days • 11.1 Test for the presence of wireless access points by using a wireless analyzer at least quarterly or deploying a wireless IDS/IPS to identify all wireless devices in use • 11.2 Run internal and external network vulnerability scans at least quarterly andafter any significant change in the network (such as new system component installations, changes in network topology, firewall rule modifications, product upgrades). • Note: Quarterly external vulnerability scans must be performed by an Approved Scanning Vendor (ASV) qualified by Payment Card Industry Security Standards Council (PCI SSC). Scans conducted after network changes may be performed by the company’s internal staff.

43. PCI-DSS Periodic- At Least Six Monthly / Annually Six Monthly • 1.1.6a Verify that firewall and router configuration standards require review of firewall and router rule sets at least every six months • 1.1.6b Obtain and examine documentation to verify that the rule sets are reviewed at least every six months At Least Annually • 3.6.4 Verify that key-management procedures are implemented to require periodic key changes at least annually • 6.6 Review public-facing web applications via manual or automated application vulnerability security assessment tools or methods, at least annually and after any changes • 9.5 Verify that the storage location is reviewed at least annually to determine that back-up media storage is secure • 9.5.b Verify that the storage location security is reviewed at least annually. • 9.9.1 Properly maintain inventory logs of all media and conduct media inventories at least annually • 11.3 Perform external and internal penetration testing at least once a year and after any significant infrastructure or application upgrade or modification (such as an operating system upgrade, a sub-network added to the environment, or a web server added to the environment). These penetration tests must include the following: • Network-layer penetration tests • Application-layer penetration tests • 12.1.2 Verify that the information security policy includes an annual risk assessment process that identifies threats, vulnerabilities, and results in a formal risk assessment • 12.1.3 Verify that the information security policy is reviewed at least annually and updated as needed to reflect changes to business objectives or the risk environment • 12.1.6b Verify that employees attend awareness training upon hire and at least annually • 12.6.2 Verify that the security awareness program requires employees to acknowledge (for example, in writing or electronically) at least annually that they have read and understand the company’s information security policy • 12.8.4 Maintain a program to monitor service providers’ PCI DSS compliance status at least annually. • 12.9.2 Test the incident response plan to be implemented in the event of system breach at least annually

44. PCI DSS – Store / Record • 9.1.1 Use video cameras or other access control mechanisms to monitor individual physical access to sensitive areas. Review collected data and correlate with other entries. Store for at least three months, unless otherwise restricted by law • 9.4.a Verify that a visitor log is in use to record physical access to the facility as well as for computer rooms and data centers where cardholder data is stored or transmitted. • 9.4.b Verify that the log contains the visitor’s name, the firm represented, and the employee authorizing physical access, and is retained for at least three months. • 9.5 Store media back-ups in a secure location, preferably an off-site facility, such as an alternate or back-up site, or a commercial storage facility • 10.3 Record at least the following audit trail entries for all system components for each event • User identification • Type of event • Date and time • Success or failure indication • Origination of event • Identity or name of affected data, system component, or resource • 10.7.b Verify that audit logs are available for at least one year and processes are in place to restore at least the last three months’ logs for immediate analysis

45. PCI-DSS Sections 1 – 3 - Do Not… • Allow direct public access between the Internet and any system component in the cardholder data environment • Allow any direct routes inbound or outbound for traffic between the Internet and the cardholder data environment • Allow internal addresses to pass from the Internet into the DMZ • Allow outbound traffic from the cardholder data environment to the Internet • Use vendor-supplied default passwords • include passwords, simple network management protocol (SNMP) community strings, and elimination of unnecessary accounts • Store sensitive authentication data after authorization (even if encrypted) • Store the full contents of any track from the magnetic stripe • full track, track, track 1, track 2, and magnetic-stripe data • Store the card-verification code or value (CVV2) • Store the personal identification number (PIN) or the encrypted PIN block • Display full PAN - except for those with a legitimate business need to see full PAN

46. PCI-DSS Sections 4 – 8 - Do Not… • Send unencrypted PANs by end-user messaging technologies (for example, e-mail, instant messaging, chat) • Allow production data (live PANs) to be used for testing or development • Allow users access to system components or cardholder data before allocating them a unique ID • Audit trail – log data • Use group, shared, or generic accounts and passwords • Allow an individual to submit a new password that is the same as any of the last four passwords he or she has used

47. PCI-DSS Sections 9 – 12 - Do Not… • Allow general physical access to publicly accessible network jacks or wireless access points, gateways, and handheld devices • Store media containing cardholder data when it is no longer needed for business or legal reasons • Dispose of electronic media where cardholder data can be reconstructed • Utilize a secure wipe program in accordance with industry-accepted standards for secure deletion, such as degaussing, or physically destroy the media • Dispose of hard copy records containing CHD / sensitive authentication data in an unsafe manner (landfill / trash, etc.)

48. BreachesinEducation

49. A stolen storage device contained the credit information of 147 parents and freshmen. The device was stolen from a secure room on November 8. • Phone numbers, credit card numbers and credit card expiration dates for participants in the Dartmouth Outdoor Club First Year Program were on the device. • Possible Mitigation Steps: • Business need for data storage • Storing of non encrypted data • Physical security • Monitoring of access to secure areas Type of Incident: Portable device

50. Ohio State revealed a data breach Wednesday that has jeopardized the identities of 760,000 people and could cost the university $4 million in fees for investigating the root cause of the breach (this does not include any provisions for possible law suits / fines) • The university notified current and former faculty, students, applicants and others affiliated with the university that hackers had accessed the server that stored their names, Social Security numbers, dates of birth and addresses – it does not appear that any financial / credit card information was breached. • OSU has had several data breaches in the past. • Possible Mitigation Steps: • AV programs up to date • Storing of non encrypted data • Track and monitor access – logs / IDS • Password access for mobile devices Type of Incident: Hacking or Malware