Zappos.com Hack: 24 Million Customer Records Breached

Sunday, January 15, 2012

Headlines

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Online retailer Zappos.com, a division of Amazon, is in the process of notifying the company's twenty-four million customers of a network security breach that exposed client records.

The company has indicated that names, email addresses, mailing addresses, and the last four digits of customer's credit card numbers have been compromised.

[Editors note: originally reported to have been last four digits of customers social security numbers. That was an error, now corrected to reflect last four digits of customer credit card numbers].

The company stated that the databases that contain sensitive billing information, such as credit card numbers, was not accessed by hackers in the course of the breach, and that they are currently working with an investigation by law enforcement.

The attackers have not been identified - at least publicly - but given current trends it is most likely the work of either criminal syndicates gathering data for use in email phishing exploits, or possibly the work of anti-business hacktivists like those of the  Anonymous movement.

Zappos.com anticipates an influx of inquiries related to the breach notification, and has instructed all employees to participate in customer service duties for an unspecified period of time.

The following letter to Zappos.com employees was posted on the company's website Sunday, January 15, and includes a copy of the email text being sent to customers as part of the notification process:

The following email was sent to our employees today:

Date: Sun, 15 Jan 2012
From: Tony Hsieh (CEO - Zappos.com)
To: Zappos Employees
Subject: Important - Security

Dear Zappos Employees -

Please set aside 20 minutes to carefully read this entire email.

We were recently the victim of a cyber attack by a criminal who gained access to parts of our internal network and systems through one of our servers in Kentucky. We are cooperating with law enforcement to undergo an exhaustive investigation.

Because of the nature of the investigation, the information in this email is being sent a bit more formally, and unfortunately we are not able to provide any more details about specifics of the attack beyond what is in this email and the link at the end of this email, but we can say that THE DATABASE THAT STORES OUR CUSTOMERS' CRITICAL CREDIT CARD AND OTHER PAYMENT DATA WAS NOT AFFECTED OR ACCESSED.

The most important focus for us right now is the safety and security of our customers' information. Within the next hour, we will begin the process of notifying the 24+ million customer accounts in our database about the incident and help step them through the process of choosing a new password for their accounts. (We've already reset and expired their existing passwords.)

-------------------------------------------------------------------------

Here is the email that our customers will be receiving:

First, the bad news:

We are writing to let you know that there may have been illegal and unauthorized access to some of your customer account information on Zappos.com, including one or more of the following: your name, e-mail address, billing and shipping addresses, phone number, the last four digits of your credit card number (the standard information you find on receipts), and/or your cryptographically scrambled password (but not your actual password).

THE BETTER NEWS:

The database that stores your critical credit card and other payment data was NOT affected or accessed.

SECURITY PRECAUTIONS:

For your protection and to prevent unauthorized access, we have expired and reset your password so you can create a new password. Please follow the instructions below to create a new password.

We also recommend that you change your password on any other web site where you use the same or a similar password. As always, please remember that Zappos.com will never ask you for personal or account information in an e-mail. Please exercise caution if you receive any emails or phone calls that ask for personal information or direct you to a web site where you are asked to provide personal information.

PLEASE CREATE A NEW PASSWORD:

We have expired and reset your password so you can create a new password. Please create a new password by visiting Zappos.com and clicking on the "Create a New Password" link in the upper right corner of the web site and follow the steps from there.

We sincerely apologize for any inconvenience this may cause. If you have any additional questions about this process, please email us at passwordchange@zappos.com.

----------------------------------------------------------------------------

We have also created a web page that we will continue to update as we learn more about what questions customers have:

    http://www.zappos.com/passwordchange


In order to service as many customer inquiries as possible, we will be asking all employees at our headquarters, regardless of department, to help with assisting customers.  Due to the volume of inquiries we are expecting, we realized that we could serve the most customers by answering their questions by email. We have made the hard decision to temporarily turn off our phones and direct customers to contact us by email because our phone systems simply aren't capable of handling so much volume. (If 5% of our customers call, that would be over 1 million phone calls, most of which would not even make it into our phone system in the first place.)

We've spent over 12 years building our reputation, brand, and trust with our customers. It's painful to see us take so many steps back due to a single incident. I suppose the one saving grace is that the database that stores our customers' critical credit card and other payment data was not affected or accessed.  

Over the next day or so, we will be training everyone on the specifics of how to best help our customers through their password change process now that their passwords have been reset and expired. We need all hands on deck to help get through this.  

Thanks everyone.   

-Tony Hsieh
 CEO - Zappos.com

Infosec Island has been provided with a copy of one of the email notifications sent to a customer, confirming that the company has already initiated the notification process.

UPDATE:

Interestingly, while Zappos management appears to be addressing the breach in a very open manner regarding the notification of affected customers, a source has provided Infosec Island with a copy of a message they received from Zappos.com that paints a slightly different picture.

[Editors note: message was received by customer while attempting to login to their account].

The message advises customers to change their password due to a "security update", but makes no mention of the massive data loss event (click image to enlarge):

Zappos Message

"I was just forced to change my password because of a 'security update'. Bulls**t. Nice cover up, Zappos," the source stated.

Source:  http://blogs.zappos.com/securityemail

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Rohit Kohli This is really embarrassing for Zappos. I think its right to be little more cautious about protecting our customers information.
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