Posts Tagged ‘compliance

27
Mar
15

PCI SWOT Analysis

SWOT – strengths, weaknesses, opportunities and threats

I had someone ask me about my thoughts on this sort of analysis of the PCI DSS. While these comments are PCI focused, I found that they actually apply to all security frameworks.

Strengths

The biggest strength in any security framework, PCI DSS included, is they are all based on the “best practices” from a wide variety of leading experts and organizations. Essentially, security frameworks are the shared knowledge base of what it takes to have basic security. We talk today about sharing breach information better and potentially in near real time, but security frameworks are the original method of sharing such information.

Weaknesses

Unfortunately, I see a number of weaknesses with security frameworks.

The largest weakness with security frameworks I see is that most people, including a lot of security professionals, seem to believe that complying with the framework is all it takes to be secure. With the PCI DSS a lot of this misinformation can be laid at the feet of the card brands. It was the card brands that originally marketed the PCI DSS as the “be all, to end all” for securing the payment process.

The unfortunate fact of life for security frameworks is that they only minimize and manage security risks, they rarely ever eliminate them. Therefore, even following the PCI DSS to the letter is no guarantee that an organization could not be breached. Yet this concept of risk minimization, risk management and the fact that security is not perfect consistently gets missed by executives. So when the inevitable breach occurs, executives go after the security people for supposedly misleading them.

Another area of weakness is the time with which it takes to make an update to the framework. In October 2014, the National Institute of Standards and Technology (NIST) issued a bulletin on secure sockets layer (SSL) indicating that they had found a flaw in the protocol and that they no longer found the protocol secure. A few weeks later the Internet was introduced to POODLE and SSL was declared insecure. It took a few months for the PCI SSC to react to this and officially declare SSL was no longer to be relied upon for secure communications. It took vulnerability scanners almost a month to begin flagging SSL implementations as high vulnerabilities as the CVE had not yet been updated. And we were recently informed that it will be April at the earliest before we will get the latest version of the PCI DSS. In the meantime, all of this administrivia did not stop attackers from using POODLE to their advantage.

The final weakness I see with security frameworks is that organizations find it impossible to execute them consistently at near 100%, 24×7. In theory the PCI DSS will provide reasonable security for all but the most dedicated attacks such as with advanced persistent threat (APT). For an organization to achieve basic security, they would have to execute the requirements of the PCI DSS at least at 95%+ and would have to remediate any issues within a few days. Unfortunately as we have seen in the recently released Merchant Acquirer Committee study, merchants are typically only compliant with the PCI DSS between 39% and 64% of the time – far from 95%+. Verizon’s recently released PCI report backs this up with their findings. The bottom line is that most organizations lack the discipline to execute any security framework consistently enough to achieve basic information security.

Opportunities

The biggest opportunity I see for the PCI DSS is it gives organizations the impetus to simplify their environments. The biggest reason for the failure to execute the PCI DSS consistently is because a lot of organizations have technology environments that mimic a Rube Goldberg cartoon. Only by simplifying that environment will an organization have a reasonable chance of securing it.

Another opportunity this gives organizations is a reason to enhance their security operations. Most organizations run bare bones security operations no different than other areas. However, what PCI compliance assessments typically point out is that those security operations are grossly understaffed and not capable of ensuring an organization maintains its compliance at that 95%+ level.

Related to these two opportunities is what the PCI SSC calls business as usual (BAU). BAU is the embedding of the relevant PCI requirements into an organization’s business processes to make it easier to identify non-compliance as soon as possible so that the non-compliance situation can be rectified. BAU is primarily designed to address the execution weakness but can also have a significant effect on the other weaknesses.

Finally, the last opportunity is to address the failings of an organization’s security awareness program. Organizations finally come to the realization that all it takes to defeat all of their expensive security technology is human error. The only way to address human error is extensive security awareness training. No one likes this, but in the end it is the only thing that remains when you have implemented all of the requisite security technology.

Threats

The obvious threat that will never go away is the attackers. As long as we have our interconnected and networked world, attackers will continue their attacks.

The final threat is complacency. A lot of organizations think that once they achieve PCI compliance that their work is done and that could not be further from the truth. Security is a journey not something you achieve and then move on to the next issue. The reason is that no organization is static. Therefore security must constantly evolve and change to address organizational change.

There are likely even more items that could be added to each of these categories. However, in my humble opinion, these are the key points.

14
Mar
15

The 2015 Verizon PCI Report

A lot has been written about this year’s Verizon PCI Compliance Report particularly about how 80% of organizations cannot maintain their compliance. And at the very end of the report are a number of issues raised by Verizon regarding why maintaining compliance is so difficult for most organizations. It is those issues that I would like to discuss.

Scale and Complexity of Requirements

“I just don’t understand why this ERP upgrade is going to take 18 months to complete. Can’t we just put the DVD in the drive and upgrade it like Microsoft Office?” – Anonymous Executive to IT Management

The same could be said about any security framework. If organizations are struggling with PCI compliance, imagine how they are struggling with HIPAA, FISMA or ISO 27K compliance. Compliance with any of the security frameworks is not easy.

I disagree with Verizon’s claim that it is related to the fact that most organizations do not know the PCI DSS. After six years and three versions, I rarely run into an organization today that does not have a basic, overall understanding of the PCI DSS. These organizations may have some interesting ideas on what sections and requirements of the DSS mean, but they have definitely studied it and read about it. Therefore the idea that organizations are ignorant on the subject is far from the truth in my experience.

In my opinion, where the problem lies is that most organizations have not truly managed their technology environments thanks to interference with mergers and acquisitions, partially implemented applications, bring your own device (BYOD), the Cloud and the plethora of other disruptions that complicate organizations. Today, IT is a very important part of any organization, but it is not managed like it was in the “good old days”. There are too many stakeholders and the consumerization of technology has not helped the situation by making everyone an IT “expert”.

Most organization’s IT operations these days are a hodge-podge of technologies, applications and networks. I would equate it to the technological equivalent of a house’s attic and garage combined. We all know we should clean and straighten them out, but that project always sits on the back burner as there are other, more important or fun things to do.

As a result, for most organizations, there is just no easy way to simplify, segregate and isolate cardholder data (CHD) and comply with the PCI DSS without making the environment even more complex. Starting over is not an option for a lot of organizations.

That said I have encountered a few very brave organizations that have done just that, started over. Management at these organizations came to the realization that fixing the problem was too complex and expensive and that starting over was the cheaper, safer and easier way to go.

Uncertainty about Scope and Impact

“I don’t know much about PCI, but I do know my scope.” – Anonymous Manager to QSA

When application developers cannot explain how their applications work on a technical level. When anyone in any department can be in the IT business. When security personnel are order takers for firewall configuration changes reviewed and approved by management that have no clue as to the implications of those changes. When network people are providing a communications utility for communications traffic but have no idea how that traffic traverses the network.

Is it any wonder we have no idea how to scope a PCI assessment?

But there are larger problems as to why scoping is difficult. The root cause of why scoping is such an issue is that everyone’s risk tolerance is different. I drive race cars at very obscene speeds on race tracks (mostly) that I am sure a lot of people would view as insane. However, I think that people that skydive and do rock climbing are the insane ones. All of this points to everyone’s acceptance and avoidance of risk based on their own views.

There is a sidebar in the Verizon report calling the PCI SSC to provide guidance about scoping. Good luck with that. The Council had a scoping SIG a number of years ago that imploded due to the aforementioned issues with everyone’s risk tolerance. The result was a small band of people from the SIG that published the PCI Open Scoping Toolkit. The PCI Open Scoping Toolkit is not perfect, but it provides a framework to have an intelligent discussion about how to go about scoping and determine what is in-scope and why.

The key to solving the scoping issue resides with the organization, not their QSA, acquiring bank or any other external entity. Organizations need to use the PCI Open Scoping Toolkit to come up with their scoping framework and definitions. Once that has been agreed, then an organization needs to map out their applications and networks to determine their true scope. This is where tools from vendors such as Tufin, FireMon, SolarWinds and the like can provide assistance by documenting the network and then simulating data flows over the network.

With that approach, it is incumbent on QSAs and other auditors to accept these definitions for their assessment unless there is some significant or gross error in the organizations definitions. This will address the complaint that organizations have with QSAs. How often have we heard something such as, “The last QSA told us this was compliant.” If we all play by the same risk definitions the client has provided, then statements like that should go away.

Once an organization truly understands and has defined its scope, it can then understand the impact of existing operations and any changes.

The Compliance Cycle

This is what the Council is attempting to address with business as usual (BAU). The idea is that with security practices and monitoring embedded within an organization’s operations, security issues can be quickly identified and addressed before they become serious.

However, for this to work, organizations need to have their scope known as well has how their IT environment actually works. Without that knowledge, embedding the PCI DSS into the organization is a futile exercise.

Lack of Resources

Every organization is running “lean and mean” these days. Cost control is king. As a result, resources are stretched, sometimes to the point that any additional activities just cannot be accommodated without hiring someone. And hiring is not allowed. So implementing BAU is not going to go well if it goes at all.

On the information security front, finding qualified people is nearly impossible, even for consultancies. Organizations are finding that most information security professionals are heading to consultancies because the pay is better. Since security is hard on both the mind and the body, most people want to be reimbursed as much as possible for their efforts. As a result, most organizations cannot pay for in-house security resources. And then, even if they do ante up, typically the person that takes the position either gets bored once they fix everything, or gets frustrated when the organization refused to make required changes to ensure or enhance security.

Enter the managed security services provider or MSSP. The concept is that the MSSP provides the security talent at a more reasonable price yet organizations get the quality personnel needed to enhance and stabilize their security.

Where this goes wrong is that the MSSP and the customer are not on the same page as to each other’s responsibilities. This is from a mixture of sales people over promising as well as prospective customers hearing what they want to hear. Never mind that it is all documented in a contract.

To address this situation, the PCI SSC has come up with a new requirement, 12.8.5, which states:

“Verify the entity maintains information about which PCI DSS requirements are managed by each service provider, and which are managed by the entity.”

Under the v3 Attestation Of Compliance (AOC) form, this will not be as big a problem for an organization to maintain. However, if an organization has a lot of service providers and/or the service providers have v2 AOCs; this could be a very daunting task.

Lack of Insight in Existing Business Processes

“I’ve only been in this position for [2, 3 or 4] months. So I’m not fully up to speed on everything we do.” – Anonymous Manager to QSA

“I’d give you an organization chart, but it would be out of date by the time I printed it.” – Anonymous Human Resources Manager to QSA

In today’s fast changing business world, people get shuffled out of departments and divisions faster than people can manage the changes. As a result, finding anyone with any sort of insight into an organization’s business processes can be extremely difficult, if not impossible.

Then we go back to my earlier comment about lack of IT management. With the advent of the Cloud, some business divisions and departments have totally sidestepped the formal IT organization and set up their own operations in the Cloud. Did they know what they were doing? No! But that was beside the point, they at least now have IT solutions, never mind if they are secure or implemented properly. The only way to find these rogue operations is to quiz everyone in the organization about how they operate and what they use to operate.

Even then, I have run into situations where a new payment channel pops out of the woodwork at the last moment. Next year’s assessment issue or we will not get the one we are currently doing out the door.

Misplaced Confidence in Existing Information Security Maturity

A lot of organizations that have been doing IT for years and years get caught in this trap. Just because you have been doing IT for an eternity does not mean that you have been doing it right for the same amount of time or that you are doing it correctly now.

In a lot of IT organizations it is an unfortunate fact of life that areas such as special projects, business continuity planning or information security were used as those “safe” places to put the former IT Vice President or Manager out to pasture so they could retire. It did not matter if the individual could handle the job; it was a place to park someone and provide a gentle way out of the organization.

A rare few individuals made the transition and actually took up the challenge of mastering their new responsibilities. However, the vast majority just checked out, collected their pay check and then retired. This left the organization with a very immature security operation compared to the rest of IT’s operations. Add into the mix the changing landscape of IT with business divisions and departments doing their own thing unbeknownst to anyone and you can see how the maturity of information security could be easily misunderstood.

Then along comes the QSA to do the PCI gap analysis and it all comes to a head as the organization comes to the rude awakening that all is not as good as they thought and that significant gaps exist. To add insult to injury, the organization finds that fixing the gaps is going to take a lot longer than the 90 days they had set aside for that activity so that they could get their Report On Compliance (ROC) done in the same year.

The Verizon report is a great read and provides a lot of insights. Everyone should get a copy and read it, take it to heart and address your organization’s security shortcomings.

18
Feb
15

Council Surveys QSAs On SSL

This message popped into my inbox late yesterday.

20150217-PCISSCemailMsg

The survey in question contains the following questions.

20150217-PCISSCSurvey

All of my clients have gotten rid of SSL on their public facing Web sites.

The dilemma we have is that while SSL is dead, it is baked into so many products and appliances.  My clients are therefore stuck with appliances and software products that have SSL hard coded into them.  As a result, they will be dependent on their vendors to convert to TLS.

That said, what is the risk of using SSL internally?  Not a good practice, but truthfully, what is the risk?

In my opinion, using SSL internally for the next 12 to 24 months would not be the end of the world as long as it does not become a significant attack vector.

It will be interesting to hear the results of this survey.

15
Feb
15

New PCI Compliance Study

Dr. Branden Williams and the Merchants Acquirer Committee (MAC) have issued a new report on PCI compliance and the impact of breaches on merchants and MAC members.  I had the pleasure of getting a preview of the survey results from Dr. Williams a few weeks before its publication.  Based on some of the online chatter I have seen, the study is being both applauded and chastised for its results.

First, who is the MAC?

“The MAC community includes acquirers/merchant banks, processors, independent sales organizations (ISOs), and others. MAC membership exceeds 500 firms.”

What was the response rate for the study?

“Approximately 20% of MAC members participated in the survey (although not all survey responses could be used in the analysis due to incomplete responses).”

While 20% might seem an awful low response rate for a survey, for those of us that conduct surveys, 20% is actually quite good.

One set of facts that was missing in the survey that I felt was important was how many merchants do the 100+ survey respondents cover and what is their breakdown by merchant level?  Branden very kindly ran a query and sent me back the following.

Level 1 Merchants:                  73

Level 2 Merchants:                153

Level 3 Merchants:             3,832

Level 4 Merchants:      1,140,623

Total:                              1,144,681

Based on this information, I would say that it reasonably represents the breakdown of merchant levels out in the real world.

The biggest finding of the study and what most people are pointing to is the low compliance percentages across the MAC members’ merchants.  Level 1, 2 and 3 merchants are only compliant around 67% to 69% of the time during their assessments.  However, most troubling is that Level 4 merchants are only 39% compliant.

Depending on the merchant level, these figures are not even close to what Visa last reported back in 2011.  Back then, Visa was stating that 98% of Level 1 merchants were reported as compliant.  Level 2 merchants were reported to be at 91% compliance.  Level 3 merchants were reported at 57% compliance.  As is Visa’s practice, it only reported that Level 4 merchants were at a “moderate” level of compliance.

So how do we square the difference in compliance percentages between the MAC and Visa numbers?  We do not because the numbers are like comparing apples to oranges.

The purpose of the study was to examine breaches and their impact on merchants.  As such, the study’s numbers indicate not only PCI compliance but also the number of organizations breached that were deemed PCI compliant, hence the much lower PCI compliance rates.

Visa’s numbers are based on filings of PCI Attestation Of Compliance (AOC) forms with processors and acquiring banks who then report those statistics up to Visa.  Visa, or any card brand for that matter, has never shared the complete equation of the number of merchants that were breached but filed an AOC indicating they were PCI compliant.  As a result, the figures posted by Visa are not representative of the study’s results and vice versa.

I think this study provides a much better look into PCI compliance than we have had from the card brands.  It shows that merchants have a significant amount of work to do maintaining PCI compliance.  I would highly recommend you download a copy of the report and share it with your management.

31
Jan
15

Merchant, Service Provider Or Both?

Apparently there are a lot of newcomers to the PCI compliance business and are asking bizarre questions regarding PCI.  One of the most common is if their organization is a merchant or a service provider or both?

Merchant

According to the PCI DSS v3 Glossary, a merchant is defined as:

“For the purposes of the PCI DSS, a merchant is defined as any entity that accepts payment cards bearing the logos of any of the five members of PCI SSC (American Express, Discover, JCB, MasterCard or Visa) as payment for goods and/or services. Note that a merchant that accepts payment cards as payment for goods and/or services can also be a service provider, if the services sold result in storing, processing, or transmitting cardholder data on behalf of other merchants or service providers. For example, an ISP is a merchant that accepts payment cards for monthly billing, but also is a service provider if it hosts merchants as customers.”

One of the points that create some of the most confusion is the point made at the end of the merchant definition that it is possible for a merchant to also be a service provider.  A lot of people think that this is a black or white, either or type of situation which it is not.

The key thing to determining if your organization is a merchant is if your organization signed a merchant agreement with a bank and has a merchant account with that bank.  If your organization did, then you are definitely a merchant.

Service Provider

Now let us talk about service providers.  In the same document, a service provider is defined as:

“Business entity that is not a payment brand, directly involved in the processing, storage, or transmission of cardholder data on behalf of another entity. This also includes companies that provide services that control or could impact the security of cardholder data. Examples include managed service providers that provide managed firewalls, IDS and other services as well as hosting providers and other entities. If an entity provides a service that involves only the provision of public network access—such as a telecommunications company providing just the communication link—the entity would not be considered a service provider for that service (although they may be considered a service provider for other services).”

The first thing to remember about service providers is that you can be tagged as a service provider and not be directly processing, storing or transmitting cardholder data (CHD) or sensitive authentication data (SAD).  We see this most often with organizations that provide managed security services (MSS).  In most cases, these organizations manage/monitor the devices that provide and/or secure the communications links.  As a result, these MSS providers can have access to unencrypted CHD/SAD whether they realize that or not.  If the MSS could be in contact with unencrypted CHD/SAD via the devices they manage, then they are in-scope for PCI compliance.

I can tell you from personal experience that service providers that are not directly processing, storing or transmitting CHD/SAD will push back and fight very hard to be ruled out of scope for PCI compliance.  It has gotten to the point that I have seen and heard of service providers taking customers to court for misrepresenting their business and to force their customer out of their service contract.  In the majority of the cases I am aware; it was shown that it was the service providers’ negligence from not explicitly asking whether or not PCI compliance was required by the customer.  So if you need to be PCI compliant, it is very important to make that clear to any service provider you are looking at just in case one or more of their services could come into contact with CHD/SAD.

Another way an organization can become a service provider is when they conduct card transactions on behalf of a third party.  The best example of this situation is with outsourced call centers.  While the call center might be conducting the card transactions on your systems, they are a third party that is processing and transmitting CHD/SAD through their workstations for your organization.  As a result, the call center is a service provider and is in-scope for PCI compliance.

Another way an organization can become a third party is if they are conducting transactions through their systems using a merchant account of a third party.  I have encountered this with call centers where the call center is using their own applications, but the merchant account used to process payments through is not the call center’s merchant account, it is the merchant account of the call center’s customer.

Both?

Finally, there is the example from the Merchant definition where the organization is both a merchant and a service provider.  As pointed out in the definition, this most commonly occurs with Internet service providers (ISP) and shared hosting providers that provide not only services for hosting a customer’s IT environment, but then accepts cards for payment for those hosting services.  From the hosting perspective, these organizations are a service provider and must comply with the PCI DSS for those services provided to their customers.  However, these organizations are also merchants because their customers can pay using a credit/debit card.

Some Closing Comments

Before I finish this post, I also want to add some comments regarding compliance reporting for service providers.

The first comment I would like to make is regarding reporting and compliance testing.  If you are a service provider, you only have the choice of a Self-Assessment Questionnaire (SAQ) D or a Report On Compliance (ROC).  If your organization processes, stores or transmits less than 300,000 card transactions, then you can use either the SAQ D or perform a ROC.  If your organization processes, stores or transmits 300,000 or more card transactions, then you are required to do a ROC.

If you are an ISP, MSS or similar service provider that does not process, store or transmit CHD/SAD, then you will not have a transaction count and therefore will fall on the under 300,000 transaction count rule.

Why would an organization that can do an SAQ D do a ROC?  If an organization desires to be listed on the Visa Global Registry of Service Providers or the MasterCard PCI Compliant Service Provider lists, then the service provider must do a ROC.  There are rules and fees for being included on these lists that each card brand Web site documents.  A knowledgeable QSA can help facilitate your listing on these sites as well as conducting the requisite ROC assessment.

A quick side note regarding Visa and service providers.  Visa is conducting a separate service provider inventory program that is outside of their Global Registry program.  This new inventory process has confused a lot of service providers and QSAs alike including yours truly.  For about the last year or so, Visa has been “registering” all service providers in an attempt to create a complete inventory of service providers.  This service provider inventory program has nothing to do with the Visa Global Registry and does not put any organization that is processed through it on the Visa Global Registry.

It is very important for service providers to know that the Attestation Of Compliance (AOC) form for the service provider is very different from the merchant version of the AOC.  The AOC for service providers provides a list of the services provided by the service provider that were assessed for the AOC.  This information is necessary for customers to know if all of their services were assessed for PCI compliance.  If a service was missed, then the merchant is responsible for assessing that service for PCI compliance.  So it is very important that you ensure that all services provided to your customers that require PCI compliance be assessed for PCI compliance.

Then there are the number of times I have received an AOC from a service provider only to find that it is a merchant AOC, not a service provider AOC.  With v3 of the PCI DSS, the Council has created separate SAQ D forms for merchants and service providers that will hopefully cure some of this issue.  It is incumbent on service providers to make sure that when they sign the AOC that it is a service provider AOC and all of the services are listed.  If not, then you need to go back to your QSA and get the right AOC form with the right information created.

And finally, my biggest pet peeve with service provider AOCs.  Some QSACs create these wonderful “Certificates Of PCI Compliance” that, while they look really nice, have no meaning to your customers and their QSAs.  No matter how many times the PCI SSC has stated that the only officially recognized document out of a PCI assessment is the AOC, I still encounter these certificates as “proof” of PCI compliance.  When asked to provide the AOC, I then get the indignant response that I should have everything I need.  In one case, I was even told I could not possibly be a QSA because I did not recognize the certificate as proof of compliance.

As I stated earlier, the service provider AOC is required to ensure that all service provided were assessed and QSAs are required to have copies of all service provider AOCs in order to show that all third parties have been officially assessed for PCI compliance.  No AOC means that the service provider is not PCI compliant and must be assessed as part of the customer’s PCI assessment.

I hope we are all now on the same page regarding the concepts of a merchant and a service provider.

07
Jan
15

SAQ A And SAQ A-EP Clarification

With the advent of SAQ A and A-EP, there seems to be confusion as to what meets what for each SAQ.  I thought I covered this rather well in my post titled ‘Of Redirects And Reposts’.  But apparently that was not clear enough.

For outsourced eCommerce solutions, the criteria from SAQ A states it can be used if and only if:

“The entirety of all payment pages delivered to the consumer’s browser originates directly from a third-party PCI DSS validated service provider(s).”

For some service providers it appears that there seems to be a lot of misunderstandings as to what constitutes “originates directly from a third party”.  A lot of processors believe that if their customers’ Web sites are not storing cardholder data (CHD) or sensitive authentication data (SAD) then they are out of scope regardless of the method used to process a customer’s payment.  What they seem to forget is that applications that process and/or transmit CHD/SAD are in-scope for PCI compliance just as those that store CHD/SAD.

For SAQ A and A-EP, the Council took their lead from Visa Europe as to what is meant by “originates directly”.  Visa Europe’s Processing eCommerce Payments guide has a great matrix that explains the difference between SAQ A and A-EP by payment processing type and merchant level.

Visa Europe SAQ A SAQ A-EP ROC Matrix

With redirects and iFrames, the merchant’s Web server never comes into contact with the CHD or SAD because the customer is communicating directly with the transaction processor’s server.  PayPal is a prime example of a redirect and meets the criteria of SAQ A.  With a direct post, JavaScript, XML or any other techniques, the merchant’s eCommerce server is at least processing and/or transmitting the CHD/SAD to the processor’s servers.  That is because there is some form of code/executable/script/etc. that is running on the merchant’s eCommerce server thus placing it directly in-scope.

Where things seem to get confusing is with processors that offer multiple methods of completing payments.  Unfortunately, it also appears to be just as confusing to the processors’ sales personnel as well.  We have encountered numerous instances where the processor’s sales people believe all of their solutions make the merchant out of scope when only the redirect/iFrame solution they have provides such a scope reduction.  All of their other solutions place the merchant directly in-scope.

The bottom line is that it is extremely important to get the transaction processor to explain how a payment is processed to determine whether your server is or is not out of scope.  Even if the sales person says the solution is an iFrame or a redirect, make sure to quiz them enough to ensure that they truly are delivering you an iFrame or redirect solution.

But a word to the wise.  Security professionals will question a merchant’s decision to not worry about the security of their eCommerce Web server because there still is a risk even with the redirect or iFrame approaches.  That risk is that the code/executable/script/etc. that invokes the redirect or iFrame on the merchant’s server gets tampered with or changed and now invokes a Web site that is not the transaction processor’s Web site.  As a result, a merchant’s customers’ CHD/SAD could be sent to Timbuktu and no one would be the wiser until goods/services are not provided due to non-payment.

As a result, security conscious merchants will, at a minimum, ensure their eCommerce servers are properly security hardened, patched current and will monitor the code/executable/script/etc. for changes.  Should a change be detected, the server would then be brought offline and fixed to ensure that transactions are properly processed.

Hopefully this provides everyone with clarity on how to use these SAQs peroperly.

One additional thing I would like to point out.  If you look at the Level 1 merchant line of the Visa Europe matrix, it shows ROC subscripted with either an ‘A’ or an ‘A-EP’.  I point this out because if you meet the criteria of either of the SAQs but are a Level 1 merchant, you can mark all of the ROC requirements not in the respective SAQ as ‘Not Applicable’ and only provide testing evidence for those requirements in the relevant SAQ.

26
Dec
14

PCI Compliance Is Getting More Rigorous

When Visa and MasterCard trotted out their security standards back in 2002 and 2003, the large eCommerce merchants that got to see them complained that they were too much.  Fast forward more than a decade and we still hear complaints that the PCI standards are too much.  Well if you are still complaining, things are about to get worse with version 3.  And the ever more consistent rumor is that business as usual (BAU) will be coming in v4.  If that comes to pass, I know some people that will likely jump out of windows as they did in the 1929 stock market crash.

So how is the PCI DSS getting more rigorous?

I spent some time analyzing the PCI DSS v3 as I did with v2.  From an analysis of v3 to v2, here are some of my findings.

  • There is an overall 11% increase in the number of tests in v3 versus v2.
  • Tests requiring some form of documentation have increased a whopping 83%. Not that 83% more documents will be required, just that there are 83% more tests where documentation is reviewed.  I will have more on this later in the post.
  • The number tests requiring interviews is up 48%. Again, not necessarily involving more people, just more questions to be asked and answered.
  • Tests requiring an observation of a process or activity are up 31%. As with the others, this is not a wholesale jump in new observations, but more an increase in things that must be observed.
  • Tests involving sampling are up 33%. This actually is an increase in the number of things sampled, but not all of the 33% increase are new samples.  This increase is the result of more clarifications from the Council to have QSAs explain what was sampled as it was implied in v2, but not explicitly requested.

Speaking of sampling, not only are the number of tests involving sampling increasing but the PCI SSC has told all of the QSAs that the days of “poor” or “inappropriate” sampling are over.  I have seen Reports On Compliance where QSAs have literally used a sample of one out of thousands under the rationale of “they are all configured the same”.  If you only tested one, how can you even draw the conclusion that the remaining thousands truly are the same?  You cannot and that is a big reason why the Council is getting picky on sampling.

The Council are also tired of incomplete samples.  The example most often quoted is there are 100 servers, half are Windows-based and half are Red Hat Linux.  A lot of QSAs were stopping there and sampling say five of each and calling their work complete.  Wrong!

What the Council is pointing out is that the QSA must go deeper in some cases when choosing their samples.  In the example above, the QSA needs to know the function of those servers so that they sample them based on their function such as database server, directory server, application server, etc.  In addition, the Council is also saying that it may be necessary to consider the applications involved as well to ensure that sampling provides a more complete picture of the environment.  In an assessment involving multiple applications, it might be necessary to sample database and application servers used by each application and not just a random sample of servers.

Finally, sampling might be higher for an entity’s first assessment or the first assessment by a QSA after a prior QSA.  The reason is that a higher sample size is warranted because all might not be as it is represented and minimal sampling would likely not reveal any issues.  This is common in the financial audit industry in situations where a new auditor is coming into the organization or the operations of the organization have been under increased scrutiny by regulators, banks or their prior auditors.

I earlier stated that documentation testing was up 83% and that was related to more testing of the same documents already being collected.  That is not to say that the amount of documentation is not increasing.  Regarding the amount of documentation required for v3 versus v2, I am estimating a conservative increase of around 100%.  I have been hearing horror stories regarding the amount of documentation being requested for v3.  I would not be shocked if the amount of documentation a QSA requires is up by 150% to 200% in some instances, particularly those situations where the QSA was not necessarily collecting all of the relevant documentation they should have been collecting.  A lot of this increase is that document counts now include observations which were considered separately in v2.

Based on this information, you should not be shocked if your QSAC increases the fees they are charging you for assessing your PCI compliance under v3.  Someone has to conduct all of those tests and review all of the extra documentation generated.  Even QSACs that have been doing the right thing all along are seeing impacts in the increases in testing required by v3.  But it has been definitely worse for those QSACs that were doing as little as possible to get an assessment done.  They are seeing the most impact from these changes and will likely find them highly onerous and difficult to justify the huge increases in professional fees required to cover their higher costs.  As a result, I would not be surprised if a number of QSACs stop doing PCI assessments because of the new requirements put on them.

But why are the changes occurring?

The primary reason is to minimize the “wiggle room” QSAs have in their testing so that assessments from one QSA to another are more consistent.  There has to be flexibility given to a QSA because organizations are never alike.  In addition what is compliant to one QSA can be non-compliant to another even within the same QSAC.  That occurs because every individual has their own sense of risk acceptance and avoidance.  This issue should be able to be taken out of the equation through discussion of the issue with the QSA and their superiors and, if necessary, development of mitigation strategies.

Under v2, a QSA that had a high risk tolerance could deem an organization compliant when the evidence would indicate that the organization is not compliant.  Or a QSA with a low risk tolerance could say one or more requirements are not in place in the same situation.  The new Reporting Template is an attempt to take the extremes out and reduce the wide swings in what is and is not compliant.  However, the new version of the PCI DSS does still allow some wiggle room for QSA/ISA judgment.

In addition to taking extremes in risk acceptance out of the assessment process, the Council is also trying to address the issue with QSAs that are judging organizations as PCI compliant when the QSA’s documentation does not support such a claim.  While the majority of QSAs thought this issue was addressed with the Reporting Instructions in v2, based on what the Council is telling us is that it apparently was not.  So the Council is getting stricter and stricter on their guidance as to what is acceptable through the language in the Reporting Template/Instructions as well as through their QSA training.

Another reason for the rigor is the breaches that keep occurring.  Each breach supplies information that might need to be incorporated into the PCI DSS.  One of the best examples of this is requirement 8.5.1:

“Service providers with remote access to customer premises (for example, for support of POS systems or servers) must use a unique authentication credential (such as a password/phrase) for each customer.”

This new requirement is in response to the significant number of breaches where the attacker gained access to a merchant’s cardholder data by knowing the remote access credentials of a vendor that is supporting the merchant such as those vendors that support point of sale (POS) solutions or card transaction processing.

Finally, the changes are also an attempt to circumvent some of the “legal” arguments that occur between the QSA and their client.  I am not the only QSA that has encountered clients that come up with very legal-like arguments and interpretations of what a particular test requires.  As a result, the Council has attempted to use wording in the tests and related testing guidance that reduces or even eliminates such interpretation arguments.  However, in my experience, clients that take this “legal” approach to their assessment are not going to stop.  They are not interested in security, they are interested in “checking a box”.  But the Council does no one any favors by only allowing QSAs and ISAs to read and have copies of the Reporting Template/Instructions until the client goes through their first PCI assessment under the new testing.  The Reporting Template should be a public document not one that only QSAs and ISAs have access.




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If your organization has a PCI opportunity, is in need of assistance with a PCI issue or if you would like the PCI Guru to speak at your meeting, you can contact the PCI Guru at pciguru AT gmail DOT com.

I do allow vendors to post potential solutions in response to issues that I bring up in posts. However, the PCI Guru does not endorse any specific products, so "Caveat Emptor" - let the buyer beware. Also, if I feel that the response is too "sales-ee", I reserve the right to edit or not even authorize the response.

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