7 min read

Update: On 28th August, an indictment was filed in a US federal district court, which mentioned Thompson allegedly hacked and stole information from an additional 30 AWS-hosted organizations and will face computer abuse charges.

Capital One Financial Corp., one of the largest banks in the United States, has been subject to a massive data breach affecting 100 million customers in the U.S and an additional 6 million in Canada. Capital One said the hacker exploited a configuration vulnerability in its firewall that allowed access to the data.

In its official statement released yesterday, Capital One revealed that on July 19, it determined an “unauthorized access by an outside individual who obtained certain types of personal information relating to people who had applied for its credit card products and to Capital One credit card customers.

Paige A. Thompson, 33, the alleged hacker who broke into Capital One server, was arrested yesterday and appeared in federal court in Seattle. She was an ex-employee from Amazon’s Cloud service ( AWS), Amazon confirms.


The Capital One hacker, an ex-AWS employee, “left a trail online for investigators to follow”

FBI Special Agent Joel Martini wrote in a criminal complaint filed on Monday that a “GitHub account belonging to Thompson showed that, earlier this year, someone exploited a firewall vulnerability in Capital One’s network that allowed an attacker to execute a series of commands on the bank’s servers”, according to Ars Technica.

IP addresses and other evidence ultimately showed that Thompson was the person who exploited the vulnerability and posted the data to Github, Martini said.

“Thompson allegedly used a VPN from IPredator and Tor in an attempt to cover her tracks. At the same time, Martini said that much of the evidence tying her to the intrusion came directly from things she posted to social media or put in direct messages”, Ars Technica reports.

On  July 17, a tipster wrote to a Capital One security hotline, warning that some of the bank’s data appeared to have been “leaked,” the criminal complaint said.

According to The New York Times, Thompson “left a trail online for investigators to follow as she boasted about the hacking, according to court documents in Seattle”. She is listed as the organizer of a group on Meetup, a social network, called Seattle Warez Kiddies, a gathering for “anybody with an appreciation for distributed systems, programming, hacking, cracking.”

The F.B.I. noticed her activity on Meetup and used it to trace her other online activities, eventually linking her to posts boasting about the data theft on Twitter and the Slack messaging service.  “I’ve basically strapped myself with a bomb vest, dropping capital ones dox and admitting it,” Thompson posted on Slack, prosecutors say.

Highly sensitive financial and social insurance data compromised

The stolen data was stored in Amazon S3, “An AWS spokesman confirmed that the company’s cloud had stored the Capital One data that was stolen, and said it wasn’t accessed through a breach or vulnerability in AWS systems“, Bloomberg reports.

Capital One said the largest category of information accessed was information on consumers and small businesses as of the time they applied for one of its credit card products from 2005 through early 2019. The breached data included personal information Capital One routinely collects at the time it receives credit card applications, including names, addresses, zip codes/postal codes, phone numbers, email addresses, dates of birth, and self-reported income.

The hacker also obtained customer status data, e.g., credit scores, credit limits, balances, payment history, contact information including fragments of transaction data from a total of 23 days during 2016, 2017 and 2018. For the Canadian credit card customers, approximately 1 million Social Insurance Numbers were compromised in this incident.

About 140,000 Social Security numbers of Capital One’s credit card customers and about 80,000 linked bank account numbers of our secured credit card customers were compromised.

Richard D. Fairbank, Capital One’s chief executive officer, said in a statement, “I am deeply sorry for what has happened. I sincerely apologize for the understandable worry this incident must be causing those affected.”

Thompson is charged with computer fraud and faces a maximum penalty of five years in prison and a $250,000 fine. U.S. Magistrate Judge Mary Alice Theiler ordered Thompson to be held. A bail hearing is set for Aug 1.

Capital One said, it “will notify affected individuals through a variety of channels. We will make free credit monitoring and identity protection available to everyone affected”.

Capital One’s justification of “Facts” is unsatisfactory

Users are very skeptical about trusting Capital One with their data going ahead.

A user on Hacker News writes, “Obviously this person committed a criminal act, however, Capital One should also shoulder responsibility for not securing customer data. I have a feeling we’d be waiting a long time for accountability on C1’s part.”

Security experts are surprised with Capital One’s stating of “facts that say “no Social Security numbers were breached’ and say this cannot be true.

Similar to Capital One, there were other data breaches in the past where the companies have agreed on a settlement to help the affected customers like the Equifax or have been levied with huge fines like the Marriott International and British Airways.

The Equifax data breach that affected 143 million U.S. consumers on September 7, 2017, resulted in a global settlement including up to $425 million to help people affected by the data breach amounting to approximately $125 per affected victim, should they apply for compensation. This global settlement was done with the Federal Trade Commission, the Consumer Financial Protection Bureau, and 50 U.S. states and territories.

The Marriott data breach occurred in Marriott’s Starwood guest database that compromised 383 million user data was revealed on November 19, 2018. Recently, the Information Commissioner’s Office (ICO) in the UK announced its plans to impose a fine of more than £99 million ($124 million) under GDPR.

The British Airways data breach compromised personal identification information of over 500,000 customers and is believed to have begun in June 2018. Early this month, the ICO also announced it will fine British Airways with more than £183m fine.

As a major data breach in one of the largest banks, Capital One could feel the pinch by regulators soon. What sets this case apart from the above breaches is that the affected customers are from the US and Canada and not from the EU. In the absence of regulatory action by the ICO or the EU commission, it is yet to be seen if regulators in the US and Canada will rise to the challenge. Also, now that the alleged hacker has been arrested, does this mean Capital One could slip by without paying any significant fine? Only time can tell if Capital One will pay a huge sum to the regulators for not being watchful of their customers’ data in two different states.

If the Equifax-FTC case and the Facebook-FTC proceedings are any sign of things to come, Capital One has not much to be concerned about.

To know more about this news in detail, read Capital One’s official announcement.

Thompson faces additional charges for hacking into the AWS accounts of about 30 organizations

On 28th August, an indictment was filed in a US federal district court, where the investigators mentioned they have identified most of the companies and institutions allegedly hit by Thompson. The prosecutors said Thompson wrote software that scanned for customer accounts hosted by a “cloud computing company,” which is believed to be her former employer, AWS or Amazon Web Services. “It is claimed she specifically looked for accounts that suffered a common security hole – specifically, a particular web application firewall misconfiguration – and exploited this weakness to hack into the AWS accounts of some 30 organizations, and siphon their data to her personal server. She also used the hacked cloud-hosted systems to mine cryptocurrency for herself, it is alleged,” The Register reports.

“The object of the scheme was to exploit the fact that certain customers of the cloud computing company had misconfigured web application firewalls on the servers that they rented or contracted from the cloud computing company,” the indictment reads.

The indictment further reads, “The object was to use that misconfiguration in order to obtain credentials for accounts of those customers that had permission to view and copy data stored by the customers on their cloud computing company servers. The object then was to use those stolen credentials in order to access and copy other data stored by the customers.”

Thus, she also faces a computer abuse charge over the 30 other AWS-hosted organizations she allegedly hacked and stole information from.

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