Staring into the abyss: how many breaches go unreported?

While compiling data breach reports submitted to Maine a few months ago, one of the things I discovered (no pun intended), was that Discover submits batched reports to at least two states. Their reports indicate how many Discover card members are affected by the incidents, but their logs don’t provide much detail about the incidents themselves.

I’m concerned that for many of the breaches they report, we have never seen breach reports filed by the entities themselves nor media reports on the incidents.  For now, though, let’s start with what I found when I received one batch of their reports to NYS. Keep in mind as you read the summaries that we are only talking about the number of  Discover card users affected by the incidents and for  only two states.  The numbers affected by each incident could be considerably higher, but since the entities themselves never filed breach reports with NYS or Maine, I have no additional information at this time.

According to Discover, Convergence Inc. of Los Angeles was reportedly hacked on or about April 1, 2009. Twenty-four NYS residents were among the “257 customers, total,” who had their names, Discover card numbers, addresses, and card expiration dates compromised.    Discover also submitted a second report of a hack involving Convergence that affected 92 NYS residents. Whether there were really two separate incidents is unclear to me. Two reports were also filed by Discover with Maine concerning Convergence during the same time period. In Maine’s logs, Discover reported a Convergence hack that affected 1,673 while a second report indicated  1,395 customers. According to the BBB, Convergence Inc. sells adult sex toys.

Because Discover was first replacing credit cards in June and July over the April 2009 hack, I wonder whether Convergence  issued any notification to its customers, and if so, when.

Knickerbocker Bar & Grill in New York City was reportedly hacked on March 15, 2010.  Sixteen of 24 affected Discover customers were NYS residents.

Level Nine Sports was first mentioned on this site when I obtained Discover’s July 2010 batch report to Maine. Their report for the same incident to NYS indicates that Level Nine Sports suffered a hack in October 2007 that affected 756 customers, total, exposing their names, addresses, card numbers, and expiration dates. Sixty-five of those affected were NYS residents.  Discover reports that they were made aware of the breach in June 2010, but when did Level Nine Sports become aware of the breach and when, if ever, did they notify their customers?

Listel Hotel Whistler in British Columbia, Canada reportedly suffered a hack in February 2009 that was discovered in June 2010. Thirty-four Discover card users were affected, including 3 from NYS.

Obsolete Classic Auto Parts was also previously mentioned on this site due to Discover’s report to Maine. Discover reports that the business was hacked on January 26 2001.  Discover reports that 1,524 card members, including 44 NYS residents, had their names, addresses, card numbers, and expiration dates compromised.   I  emailed the Oklahoma firm to ask if the breach really occurred in 2001 and to ask some other questions about the incident and follow-up, but I have not received any reply.

Pandora MOA was also previously mentioned on this site due to Discover’s report to Maine. According to Discover, they were hacked in December 2008. Of 376 Discover card members who had their names, addresses, card numbers and expiration dates acquired, 36 were NYS residents.

St. Clair Winery & Bistro was in the news back in February when Visa started alerting customers of a breach. It turns out that it wasn’t just the Albuquerque bistro affected, though. According to Discover’s report to NYS, both the Las Cruces and Albuquerque bistros were hacked: 88 Discover customers at the Las Cruces bistro and 224 Discover customers at the Albuquerque bistro had their card numbers acquired. According to their report, the breach occurred in August 2008.  As we all know, 2008 was when we started seeing a lot of hospitality sector breaches.  It seems that it took until February of this year for Visa to identify the bistros are the source of some fraudulent activity.

Two Point Enterprise was also previously mentioned on this site due to Discover’s report to Maine. Discover’s report indicates that the Louisiana firm was hacked in November 2008 and that 105 card members had their names, addresses, card numbers, expiration dates, and other data acquired.

Van Dyke’s Supply was also previously mentioned on this site. Discover’s report to NYS indicates that the hack, which affected 6,946 Discover customers, occurred in October 2008 and that names, addresses, card numbers, and expiration dates were acquired.

Wecks in Rio Rancho, NM was reportedly hacked in February of this year; 358 Discover card members had their card numbers acquired.

Taken together, these breach summaries from Discover to two states suggest that there are many reportable breaches that are not getting reported to states by the breached entities themselves.   Based on what  I obtained,  I would estimate that as a crude guess, there might easily be 70 or more business/hospitality sector breaches each year where the entities have not filed breach reports as required by just these two states.  And that’s just for those using Discover cards.

The fact that in at  least some cases, breaches are seemingly remained undetected for long periods  continues to be a concern.   But who, if anyone, is working with Level 4 merchants to help them comply with breach reporting requirements after they do realize that they’ve had a breach?

This is where one uniform breach-reporting requirement and standardized form would be a boon, as it should promote greater compliance with reporting requirements.  Of course, we need Congress to actually pass such a bill, but hey, one can always hope.

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