There’s the Beef: Wendy’s Breach Numbers About to Get Much Meatier
When news broke last month that the credit card breach at fast food chain Wendy’s impacted fewer than 300 out of the company’s 5,800 locations, the response from many readers was, “Where’s the Breach?” Today, Wendy’s said the number of stores impacted by the breach is “significantly higher” and that the intrusion may not yet be contained. wendyskyOn January 27, 2016, this publication was the first to report that Wendy’s was investigating a card breach. In mid-May, the company announced in its first quarter financial statement that the fraud impacted just five percent of stores.
But since that announcement last month, a number of sources in the fraud and banking community have complained to this author that there was no way the Wendy’s breach only affected five percent of stores — given the volume of fraud that the banks have traced back to Wendy’s customers.
What’s more, some of those same sources said they were certain the breach was still ongoing well after Wendy’s made the five percent claim in May. In my March 02 piece Credit Unions Feeling Pinch in Wendy’s Breach, I quoted B. Dan Berger, CEO of the National Association of Federal Credit Unions, saying the he’d heard from three credit union CEOs who said the fraud they’ve experienced so far from the Wendy’s breach has eclipsed what they were hit with in the wake of the Home Depot and Target breaches.
Today, Wendy’s acknowledged in a statement that the breach is now expected to be “considerably higher than the 300 restaurants already implicated.” Company spokesman Bob Bertini declined to be more specific about the number of stores involved, citing an ongoing investigation. Bertini also declined to say whether the company is confident that the breach has been contained.
“Wherever we are finding it we’ve taken action,” he said. “But we can’t rule out that there aren’t others.”
Bertini said part of the problem was that the breach happened in two waves. He said the outside forensics investigators that were assigned to the case by the credit card associations initially found 300 locations that had malware on the point-of-sale devices, but that the company’s own investigators later discovered a different strain of the malware at some locations. Bertini declined to provide additional details about either of the malware strains found in the intrusions.
“In recent days, our investigator has identified this additional strain or mutation of the original malware,” he said. “It just so happens that this new strain targets a different point of sale system than the original one, and we just within the last few days discovered this.” The company also emphasized that all of the breached stores were franchised — not company-run — entities. Here is the statement that Wendy’s provided to KrebsOnSecurity, in its entirety:
Based on the preliminary findings of the previously-disclosed investigation, the Company reported on May 11 that malware had been discovered on the point of sale (POS) system at fewer than 300 franchised North America Wendy’s restaurants. An additional 50 franchise restaurants were also suspected of experiencing, or had been found to have, other cybersecurity issues. As a result of these issues, the Company directed its investigator to continue to investigate.
In this continued investigation, the Company has recently discovered a variant of the malware, similar in nature to the original, but different in its execution. The attackers used a remote access tool to target a POS system that, as of the May 11 th announcement, the Company believed had not been affected. This malware has been discovered on some franchise restaurants’ POS systems, and the number of franchise restaurants impacted by these cybersecurity attacks is now expected to be considerably higher than the 300 restaurants already implicated. To date, there has been no indication in the ongoing investigation that any Company-operated restaurants were impacted by this activity.
Many franchisees and operators throughout the retail and restaurant industries contract with third-party service providers to maintain and support their POS systems. The Company believes this series of cybersecurity attacks resulted from certain service providers’ remote access credentials being compromised, allowing access to the POS system in certain franchise restaurants serviced by those providers.
The malware used by attackers is highly sophisticated in nature and extremely difficult to detect. Upon detecting the new variant of malware in recent days, the Company has already disabled it in all franchise restaurants where it has been discovered, and the Company continues to work aggressively with its experts and federal law enforcement to continue its investigation.
Customers may call a toll-free number (888-846- 9467) or email PaymentCardUpdate@wendys.com with specific questions.