Layer Seven Security

FTC Takes Action against Wyndham Worldwide after Data Breach

Until recently, the fallout from the data breach at Wyndham Worldwide, owner of Ramada, Travelodge and a host of other hotel brands, followed an all too familiar path. Immediately after news of the breach reached customers in 2010, the company followed regular protocols by issuing an apology and committing itself to improving security procedures in an open letter to the public.

The tale took an expected turn last month when the Federal Trade Commission (FTC) filed a complaint against Wyndham, citing the company’s failure to protect customer information and comply with security measures outlined in its own privacy policy as the grounds for the complaint. It’s alleged that the data security measures outlined in the policy were misleading and deceptive and therefore, violated the FTC Act. In essence, the FTC claims Wyndham failed to live up to security standards implied in its privacy statements.

The FTC’s response seems to have caught everyone off guard, including Wyndham itself. In a statement issued shortly after the complaint was filed, the group stated, “We regret the FTC’s recent decision to pursue litigation, as we have fully cooperated in its investigation and believe its claims are without merit. We intend to defend against the FTC’s claims vigorously, and do not believe the outcome of this litigation will have a material adverse effect on our company… In a time when cyber attacks on private and public institutions are on the rise globally, safeguarding customer information remains a top priority at Wyndham Worldwide.”

Wyndham has good reason to be taken aback by the FTC’s decision. Organisations that fall victim to hackers are rarely sued by government agencies. In most cases, civil action through class action lawsuits is the extent of their worries. However, Wyndham’s case seems to have been too severe for the FTC to ignore. This may have little to do with the size of the breach. Even large data breaches can be overlooked if companies had established reasonable security measures prior to the compromise. Therefore, the $10M of fraudulent transactions attributed to the 600,000 records stolen through the three separate breaches that took place at Wyndham should not in itself have led the FTC to take action. The driving factor seems to be the nature of the vulnerabilities and the absence of basic security measures at the company. The FTC claims that Wyndham failed to establish perimeter firewalls, change default user IDs and passwords, maintain strong password policies and patch and update software to remedy security vulnerabilities. It also failed to establish internal-facing firewalls to segment local and corporate networks and encrypt payment card data in storage.

Wyndham Worldwide may take some solace from the fact that the FTC does not have the ability to levy financial penalties. If the complaint is successful, Wyndham will probably be required to upgrade its security and undergo regular third party audits. However, a Senate bill was recently introduced that would enable the FTC to impose fines in data security issues. The bill was promoted by the FTC itself which clearly is committed to a strong stance on such issues. The agency has sued or reached settlement with approximately 35 companies over the last ten years for misrepresenting data security measures. Prior to Wyndham, the most notable case was Twitter, which settled with the agency in 2010.

White Hats, Black Hats and Skiddies: The Class System in Information Security

There are few terms more widely misunderstood in the world of information security than the word ‘hacking’. Although it’s used in a variety of contexts, it’s most commonly used to refer to all types of cyber crime including everything from fraud and industrial espionage to identity theft and spamming. If you take this view, cyber crimes are the deeds of ‘hackers’.

In reality, hackers do far more good than harm. Many are researchers that practice a form of ethical hacking driven by a desire to improve the state of information security. Ethical hackers are the ‘white hats’ of security. They use everything from port scanning to breaking and entering to simulate an attack against networks and systems, usually with the consent of their targets. Software companies such as SAP owe a huge debt to white hats. Many of the vulnerabilities patched by SAP Security Notes are discovered not by SAP, but independent researchers that are far more adept at finding vulnerabilities than SAP itself.

In the past, white hats would publish details about vulnerabilities as soon as they were discovered. Today, most follow SAP’s Disclosure Guidelines. As a result, very few vulnerabilities are publicized until they are patched by SAP. Whether or not this is in the interest of SAP customers is open to debate. It could be argued that this reduces the incentive for SAP to properly patch its software, A case in point is a session hijacking vulnerability in the Enterprise Portal which wasn’t patched until 18 months after it was reported to SAP.

White hats rule the roost of information security. One step below are the black hats who most closely resemble the stereotypical image of hackers portrayed in pop culture. Black hats use the same tactics as white hats but differ in their motives which are generally malicious. Most are driven by the need for notoriety or personal gain, although some are motivated by more noble goals such as social justice. The latter are often referred to as ‘hacktivits’. Its difficult to stall an attack by talented and determined black hats. The only approach that provides any glimmer of hope is the tried and tested defense-in-depth strategy which may buy enough time to detect a breach before any real damage is done or encourage attackers to direct their efforts towards other less well defended targets outside your network.

White hats look down upon black hats but the two groups have much in common. Firstly, they are both skilled in the art of finding and exploiting vulnerabilities. Secondly, they’re partial to challenges and venerate well-constructed code like a thing of beauty. Thirdly, both white hats and black hats frown upon script kiddies, or skiddies for short.

Skiddies are the hillbillies of the information security world. They don’t look down upon anyone since they’re at the rock bottom of the totem pole. Skiddies are considered social pariahs since they have no appreciation of the concepts and tools of information security. Their sole purpose is to exploit vulnerabilities discovered by black hats. Black hats take pride in their work. Targets are carefully selected and attacks are meticulously planned. They go to great lengths to cover up their tracks. Skiddies, on the other hand, blindly execute scripts developed by black hats hoping to catch victims that happen to be susceptible to whatever vulnerability they’re targeting at a moment in time. Despite this, skiddies should not be underestimated. They far out-number black hats. They also have an uncanny ability to learn about new exploits long before they’re patched. This is fuelled by IRC (Internet Relay Chat) and online trading for zero-day exploits.

The proliferation of easy to use security tools with point and click interfaces has dumbed down hacking and turned the tide in favor of skiddies. Many programming or configuration flaws in systems such as SAP don’t require any technical skill to exploit. Therefore, relying upon security through obscurity no longer works, especially when systems are public-facing.

Intense, focused attacks led by black hats are destructive but far less likely than a random strike performed by a skiddie. However, the latter will quickly reveal vulnerabilities in a poorly patched SAP environment.

The Top 5 Security Notes you should apply to Patch your SAP systems

April was another bumper month for SAP Security Notes. In all, SAP issued 33 patches, of which 5 were considered critical. Top of the list were Notes 1647225 and 1675432 which address missing authorization checks in components of Business Objects Data Services (EIM-DS) and the SAP Classification System (CA-CL).

EIM-DS is SAP’s flagship solution for data integration and quality. It’s used to consolidate, cleanse and migrate data from both SAP and external systems. CA-CL is used to manage classification properties and classes for various types of objects. An example could be an object such as a Ford F-350. This would fall into a Vehicle class and have properties such as length, weight, color, power, capacity, etc. assigned within the system. Both EIM-DS and CA-CL suffer from vulnerabilities that could enable users to escalate their privileges and perform administrative functions.

SAP also issued three other critical Security Notes. Two of these deal with programming errors in the SAP User Management Engine (BC-JAS-SEC) and other components of the NetWeaver Web AS Java. This manages Web-based access to SAP applications such as the Enterprise Portal. Note 1651004 is designed to protect the UME from cross-frame scripting (XFS) attacks that could be used to the steal the logon credentials of SAP users. You can learn more about XFS here. Note 1641208 deals with signature wrapping attacks that target XML messages transmitted through certain SAP Web services. This attack can be used to intercept and manipulate a message without breaking the digital signature designed to protect the integrity of the message and its content. It could enable attackers to modify the data within XML messages without detection.

The last vital patch released by SAP in April was Note 1652803 which fixes a Denial of Service (DoS) vulnerability in certain versions of Apache Tomcat bundled with Business Objects Enterprise. Tomcat is an open source web server that provides a runtime environment for Java code. Business Objects Enterprise is the platform that supports SAP reporting tools such as Crystal Reports, Web Intelligence and the Dashboard Builder.

SAP uses the Common Vulnerability Scoring System (CVSS) system to rate Security Notes. Three of the five critical vulnerabilities patched in April have a base score of 7.5. The highest possible score is 10.0. SAP did not provide CVSS information for the other two. This is fairly common. SAP doesn’t consistently provide CVSS scores for all Notes.

The Advisory below includes a complete listing of all of the Security Notes issued by SAP last month. Particular attention should be paid to 1657200, which is designed to patch a flaw in an SAP component responsible for managing payment cards, and the injection vulnerability patched by 1638596.

The Four Myths of ERP Security

There are several myths in ERP security. One of the most common is that security is largely a matter of controlling access and segregation of duties. Another is that business applications are accessible only within internal networks. Yet another is that such applications are not a target for attack. All three are based on a simplistic and misguided take on today’s ERP systems.

The reality is that contemporary ERP systems have a highly complex structure. Complexity is the enemy of security. Vulnerabilities can be found not only in the business or application layer (which is the traditional area of focus for ERP security practitioners) but the technical layer that includes database, operating system and network components. A Fort Knox approach for the application level will provide a false sense of security if architectural,  configuration and programming flaws are not addressed at the technical level.

This is compounded by the fact that most ERP instances have more than one attack surface. Almost all have direct or indirect connections to the Internet. The former includes connections to external offices, suppliers, vendors or other partners and to SAP services. The latter can include connections to user workstations with Web access. ERP resources are increasingly designed to be accessible by mobile users using Web-based protocols, ports and services. The isolated mainframes of yesteryear are a distant memory in our era of global communications.

Vectors for attack surfaces in ERP systems are generally well-known. What’s more, most can be performed with low-spec laptops and minimal technical knowledge. The idea that very few people have any motive to attack such information-rich systems is one of the most disturbing and perplexing myths in ERP security. I’m reminded of a comment that was made to me by a prominent partner in a well-known consulting firm. The partner was engaged as a security advisor by a large meat processing company during an otherwise successful SAP implementation. In his view, the client had a relatively low risk profile which justified a ‘vanilla’ security framework for its SAP systems. As a result, the company was urged to stick with SAP defaults, wherever possible.

The leads to the fourth and most damaging myth in ERP security: the notion that systems are securely configured by default and, where they are not, it’s the responsibility of the vendor to secure the system. ERP systems are designed to be flexible. They have to be capable of meeting the diverse needs of every imaginable business in all industries and sectors. As a result, there is no standard configuration that can meet the requirements of every business. Security has to be enabled. Default security settings are often highly dangerous and can leave organizations open to internal and external attacks. For this reason, SAP has issued numerous white papers, security guides and other publications to support the secure configuration of its software during and after implementation. This should be required reading for all security professionals specializing in SAP.

SAP does not take responsibility for security issues arising from architectural flaws, misconfigurations and inadequate patching. Customers are expected to design, manage and maintain their systems in a secure manner. This can prove to be a challenge in companies where there is no clear ownership over SAP resources or in cases where systems are owned by business departments that lack the technical skills to effectively manage ERP security. In these scenarios, business owners should take steps to share ownership with IT functions, especially technical resources within their organization that are more accustomed to dealing with infrastructure or platform-level security. There is often a strong relationship between the strength of SAP security in organizations and the degree of partnership between business and IT.

A Ten Step Guide to Implementing SAP’s New Security Recommendations

On January 16, SAP issued a revamped version of the whitepaper Secure Configuration of SAP Netweaver Application Server using ABAP, which is rapidly becoming the de-facto standard for securing the technical components of SAP. According to SAP, the guidance provided in the whitepaper is intended to help customers protect ABAP systems against unauthorized access within the corporate network. In fact, many of the recommendations can also be used to protect SAP systems against remote attacks originating outside such a network. These attacks are targeted at the technical components of SAP Netweaver that are responsible for managing user authentication, authorization, encryption, passwords and system interfaces, as well as underlying databases and operating systems. Breaches in these components can enable attackers to take complete control of an SAP environment.

The following is a quick guide to help you comply with SAP’s recommendations.

1. Disable unnecessary network ports and services. In most cases, this means blocking all connections between end user networks and ABAP systems other than those required by the Dispatcher (port 32NN), Gateway (33NN), Message Server (36NN) and HTTPS (443NN). NN is a placeholder for your SAP instance number. Administrative access should only be allowed through secure protocols such as SSH and restricted to dedicated subnets or workstations through properly configured firewall rules.

2. Install the latest version of SAP GUI. This should be 7.10 or 7.20 with activated security rules configured with the ‘Customized’ setting and the ‘Ask’ default action.

3. Implement strong password policies, restrict access to password hashes in tables and activate the latest hashing algorithms. SAP does not specify the exact settings for password policy parameters but you should use frameworks such as the PCI DSS as a proxy. Refer to section 8.5 of the standard. Default passwords should be changed for standard users and the password hashing mechanism should be upgraded to the latest version available for your system. Wherever possible, downward-compatible hashes should be removed from the database.

4. Enable SNC and SSL. SAP client and server communication traffic is not cryptographically authenticated or encrypted. Therefore, data transmitted within SAP networks can be intercepted and modified through Man-In-The-Middle attacks. Secure Network Communication (SNC) should be used for mutual authentication and strong encryption. This can be performed natively if both servers and clients run on Windows. You will need to use a third party product to secure connections between heterogeneous environments such as AIX to Windows.

SNC will secure network communication using the SAP DIAG and RFC protocols. For Web-based communication, you should switch to HTTPS/ SSL and restrict access to the relevant cryptographic keys.

5. Restrict ICF services. Many of the services enabled by default in the Internet Communication Framework (ICF) are open to abuse and could enable unauthorized and malicious access to SAP systems and resources. At a very minimum, you should deactivate the dozen or so services mentioned by SAP in the white paper. This can be performed through transaction SICF.

6. Secure Remote Function Calls (RFC). Wherever possible, remove trust relationships between systems with differing security classifications and hardcoded user credentials in RFC destinations. The belief that RFC connections using SAP_ALL privileges is fine as long as the user type is not set to dialog is a myth. This represents a serious risk to the integrity of information in SAP systems.

7. Secure the SAP Gateway. The Gateway is used to manage RFC communications which support SAP interfaces such as BAPI, ALE and IDoc. Access Control Lists (ACL) should be created to prevent the registration of rogue or malicious RFC servers which can lead to the interruption of SAP services and compromise data during transit. You should also enable Gateway logging and disable remote access.

8. Secure the SAP Message Server. The Message Server is primarily a load balancer for SAP network communications. Similar to the Gateway, it has no default ACL which means it is open to the same type of attacks. You should filter access to the Message Server port using a firewall and create an ACL for all required interfaces.

9. Regularly patch SAP systems. Implement missing SAP Security Notes and patch systems at least once a month. Security Notes can be downloaded from the SAP Service Market Place.

10. Regularly monitor the SAP security configuration. Standard SAP services such as EarlyWatch (EWA) and the Computing Center Management System (CCMS) can be used to monitor some security-relevant configurations. However, they do not provide the same coverage as professional-grade security tools such as those used by Layer Seven Security. You can learn more about SAP security monitoring through vulnerability assessment here. To discover why vulnerability assessments should be an integral component of your SAP security framework, click here.

SAP had reservations with Deloitte’s blueprint for Marin County

After recently losing Beneficial Mutual as an audit client, Deloitte suffered another major setback last week. While a U.S District Court Judge dismissed racketeering and other claims against the firm made by Marin County as a result of what the Californian authority considered a botched implementation of SAP for Public Sector, the court declared that the county had a plausible claim of bribery against Deloitte.

In the $30M complaint against Deloitte attached below, Marin County alleged that Deloitte had misrepresented its skill and experience to obtain the contract for the implementation, staffed the project with inexperienced consultants and deliberately concealed issues and risks arising during the implementation from the county. This included a practice of under-testing and “truncated, simplistic and incomplete tests that were intended to produce positive results to create the false impression, prior to the go-lives, that the SAP system was in fact ready for production”. It also included alleged bribing of the county official overseeing the project. After the implementation failed to support basic financial, payroll and HR functions, Deloitte offered costly post-production support to the county to address the problems plaguing the system.

The county eventually scrapped the implementation, despite paying $11M in consulting fees, and alleged that Deloitte’s conduct was consistent with the approach used by the firm during similar SAP implementations for public organisations in Los Angeles, San Antonio, Colorado and Miami-Dade.

During initial hearings, SAP declared that it had expressed concerns with Deloitte’s blueprint designs which put the county “at risk of an improperly designed system which could lead to substantial rework … or a re-implementation after go live”.  However, this did not appear to have led SAP to question earlier accolades it had made regarding Deloitte’s ‘depth and breadth of skills and services’ or Service Partner Awards bestowed by SAP to Deloitte.

Commenting on the Court’s decision, County Counsel Jack Govi stated that “the county is confident that Deloitte will be held accountable for its misconduct, which has cost the county of Marin taxpayers millions of dollars”.

The case highlights the importance of selecting the right system integrators for SAP implementations and the problems that arise from misaligned objectives between business partners during transformations. Customers, vendors and system integrators should remain focused on shared objectives rather than their own specific goals which often conflict with those of the project.

The original complaint fied by Marin County against Deloitte for failed SAP implementatio

When do default passwords become a configuration error?

The answer is when your Legal department is managing the fallout after a data breach. The case in point is the Utah Department of Health which announced this week that over 280,000 records belonging to Medicaid and CHIP recipients were compromised after a breach last week believed to be perpetrated by a group in Eastern Europe (

The group exported 25,000 files containing personal information including social security numbers, belonging to hundred of thousands of individuals. According to the Department, the breach was caused by “a configuration error at the authentication level of a server’s multilayer security system.” This seems like a rather euphemistic way of saying the server had a default password that the attackers were able to exploit. The Department states that it has implemented ‘corrective measures’ which presumably includes changing the password. It has also offered free credit monitoring for those effected by the breach.

To learn how to manage default users and passwords in SAP systems, download our free white paper at

Why you should immediately patch the recent DoS Vulnerability in AIX

IBM released an advisory in February for a Denial of Service (DoS) vulnerability in AIX versions 5.3, 6.1, and 7.1. The warning seems to have flown under the radar since so far, many companies running the effected AIX OS platforms for their SAP environments have yet to deploy the patch. The vulnerability relates to a flaw in ICMP packet handling. An ICMP echo reply with ID=1 can lead to a DoS. ICMP is part of the Internet Protocol Suite and can be used to relay query messages. Echo reply is a ping utility that can be executed remotely with no authentication and very little complexity. The vulnerability has a CVSS base score of 7.8 and exploitability sub-score of 10 which means it is rated as extremely dangerous. The relevant security update can be downloaded directly from IBM through Technical information is available at


MasterCard confirms it will enforce the PCI DSS compliance deadline for Level 2 merchants

As you probably recall, MasterCard issued a directive in 2009 that required all Level 2 merchants to comply with the PCI DSS through either a Self-Assessment Questionnaire (SAQ) prepared by a certified Internal Security Assessor or an assessment performed by a Qualified Security Assessor by June 30, 2010. Following an uproar from merchants, this was pushed back to June 30, 2012. The latest news is that MasterCard has every intention of sticking to this deadline. If you’re a Level 2 merchant with between 1 and 6 million MasterCard or VISA transactions per year, you should immediately contact your acquiring bank to confirm your SAQ or ROC reporting requirements.

PCI DSS Merchant Levels

PCI DSS Merchant Levels

Microsoft Hack Exposed Credit Card Details

Earlier today, Microsoft issued a statement that declared that the financial information belonging to customers of its online store in India may have been compromised by the recent attack perpetrated by a Chinese group called the “Evil Shadow Team.”

It is widely believed that this information was stored in clear text in databases raided by the group. The Evil Shadow Team may also have breached the supposedly secure gateway handling the payment process. In an original statement issued shortly after the attack, Microsoft had claimed the group had only compromised login IDs, passwords and possibly shipping addresses. However, after further investigation, it appears that the damage was far worse. Two weeks after the attack, the online store is still down, suggesting there are serious issues with the site.

To learn how to secure SAP systems against similar attacks, read our whitepaper.