Epsilon Interactive, who sends commercial email on behalf of hundreds of companies, admitted to a security breach that they detected some time in March. Epsilon and its parent company, Alliance Data, have posted two press releases about the breach.

How many companies’ customers' email addresses were lost?

Epsilon has not revealed any statistics beyond ‘2% of our clients’, of which they reportedly have 2,500.

Journalists covering the story have collected notifications sent by about 70 companies, including many financial institutions. The names of these companies have been published at:

What information was lost?

Epsilon has stated that the names and email addresses of their clients' customers were taken. Presumably the attackers were also able to access the names of each client.

What does this mean for consumers?

If you received a notification from one of Epsilon's clients, the thieves know your name and email address.  Depending on which company had your information, the thieves may also be know the hotels you may stay at, which credit cards you may use, or where you buy stuff online. If your email address shows up on several of these lists, the criminals can draw together a pretty accurate profile of who you are, and what you typically do, and can guess your income level. Ironically, that is what companies like Epsilon do with the data, too.

Do the criminals have any more information about me?

While it's common for the contents of an email message to include more personal information than your name and email address, as far as we know, this information was not stolen. Often times, different data is stored in different places, and the thieves may have not been able to access the contents of previously sent messages. There is a pretty good explanation of the way these marketing databases generally work here

My address was lost in the Epsilon breach; CAUCE says the only way protect myself against phishing is to change my address. Isn't that is a rather extreme approach?

Sadly, it may not be extreme enough.  The Anti-Phishing Work Group reports that there are about 360,000 unique phishing sites, annually [2010].

Anti-virus software catches new malware about 20% of the time, leaving computer end-users exposed to a tremendous amount of viruses, keyloggers, and spyware, and other bad things. Anti-spam software does a pretty good job, getting well upwards of 90% of all spam, but some trickles through. We know that phishing attempts were successful at companies, ESPs, who were on high alert for the attempts.

While some phishing attempts are obvious, almost silly, others can be extremely difficult for end-users to recognize. Our friends at Word to the Wise took apart a legitimate email from an Epsilon client-company, and even email experts had a hard time determining if the email was real. See their article ‘Real. Or. Phish?’.

If your email was lost by a client company of Epsilon, we stand by our suggestion that changing your address is the best way to avoid receiving and having to deal with the phishing emails and other spam that will inevitably come from this data theft. Even if you don't want to abandon your current address entirely, this would be a good time to set up a new address and move your important communications there.

I unsubscribed from a customer list at Epsilon, and still received a notification from them. Isn’t this illegal?

It is arguably illegal under some laws, but it makes good sense that they did mail you. It doesn’t mean you weren’t unsubscribed. Here’s how it works: When you unsubscribe from an emailer’s list, they put your address into what they call a ‘suppression list’. The criminals presumably stole these too. The companies did the right thing by alerting you to the fact that your address was stolen.

How can I unsubscribe from everything at Epsilon?

Epsilon maintains a list of places where you can unsubscribe from a variety of their clients' newsletters.

We do not know if this will ensure that another of their clients will not upload your address to Epsilon in the future, and of course there are many other ESPs out there.

 Are the authorities involved? Can I sue someone?

Epsilon is reportedly working with the Secret Service, presumably because information related to bank and credit card clients was lost. Previously, some of the companies who were targets or victims of the previous series of breaches (which, again, may not be connected to the Epsilon incident) have been working with law enforcement.

The Australian Communications and Media Authority and Australian Privacy Commissioner are aware of the attack, having been alerted to it by Dell Australia, whose data was stolen. The breach may prompt an investigation by the UK Information Commissioner's Office, Connecticut Attorney General George Jepsen and Consumer Protection Commissioner William Rubenstein are investigating, and have written a letter to Attorney General of the United States asking him to investigate. Leaders of the House Energy and Commerce panel in the United States have written to the CEO of Alliance Data, Epsilon’s parent company, asking for more details on how many customers were affected and how the breach occurred.

You could try to sue someone: the company holding your data, or Epsilon, or both. There may be class action lawsuits coming out of this, as well as lawsuits by Epsilon’s client companies. If you do file with a class-action, you should not expect a large financial settlement, as these are generally quite small.

CAUCE suggests that if you live in a relevant jurisdiction, you can file a complaint with the local authorities about the breach:

 If you have incurred a financial loss as a result of any phishing attack, or see suspicious activity on your bank account, contact your financial institution to alert them and report your credit card stolen immediately. Then, call your local and federal police forces to file a complaint (the bank will not do this for you).


How was the hack accomplished?

Epsilon has not released details about the mechanics of the breach. If it is similar to the hacking attempts targeted at ESPs last year, the hackers may have used social engineering and spear-phishing techniques, leading to an employee mistakenly typing their username and password into a web page controlled by the hacker.  However, at this time, we do not know what happened or whether there's any connection to the previous attacks.

Has Epsilon been hacked before?

Maybe. Epsilon has not publicly admitted to any previous attack, but their customer Walgreens has indicated that this is the second time they have lost data by way of Epsilon.

“After the incident last year, Walgreens requested that Epsilon put a number additional security measures in place. Apparently, that expectation was not fully met.” – Walgreen spokesperson, via databreaches.net

Is the Epsilon breach part of the previous series of attacks on the ESP industry?

These attacks appear to have begun as early as November 2009, the first victim being a company called aWeber.

Typically, the criminals would hack into an ESP by sending an employee an email that infected them with keylogger spyware, take over one of their client accounts, and send spam for fake Adobe or Skype software. More than a dozen different ESPs, including Epsilon, were targets or victims of these attacks in 2010.

It is impossible to say if this is the same as what happened to Epsilon more recently. Adobe or Skype spam was seen during previous breaches. This did not happen with the current breach with Walgreen or any other Epsilon customer.

This could have been the same group, using the same point of attack. It could have been a copycat using the same tactics, or an entirely different approach. We do not know, and there are too many variables for anyone to say they know definitively — though if Epsilon were to share what they know with the security community, it's likely that we could understand quite a bit more.

Did Epsilon have lax security?

We do not know what changes they made after their first breach, so it is impossible to say.

Were there things they could have done to improve security?

Obviously — they were hacked, after all. Epsilon will presumably address whatever let the hackers get into their systems this time, but any security professional will tell you that security is never perfect. What appears secure today may be exploited tomorrow.

There are many steps ESPs can take to much improve their security related to client lists and outbound email – we have listed them here

I heard that someone warned ESPs about breaches in November.

They did. Return Path provides services to ESPs, blogged about their own breach, and those at ESPs in November 2010. In fact, the ESP industry was becoming aware of this series of breaches all the way through 2010, as they were happening.

Security isn’t 100%? Why?

Software, and the way it interacts with various web applications is very complicated. Many sites do not, or cannot update all components that go into a web application, because to do so may break functionality on the site, or they are negligent. Home computers are pretty much the same. Microsoft, for example, issued 67 updates this past ‘Patch Tuesday’. Have you updated your computer?

Who is the real victim here?

You are. Epsilon suffered the initial attack. Their clients suffer as well, losing consumer trust. There may also be marketing or advertising agencies involved. But as far as CAUCE is concerned, the people who stand to suffer the most are the regular Internet users who trusted that the major brands whose products they enjoy would keep their email addresses and other personal information safe and secure. If these companies do not take immediate, public actions to prove that they deserve our trust, then they do not deserve our business.