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Hey banks: Use Win XP after deadline? You'll PAY if card data's snaffled

DPA fines and Payment Card Industry fines, it all adds up – watchdog

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Banks that use the Windows XP operating system will face a risk to their compliance with payment card data security rules if they continue to operate the software after Microsoft withdraws its extended support services, a US regulatory body has warned.

Microsoft confirmed in 2010 that it would end "extended support" for Windows XP and Office 2003 on 8 April 2014. The Federal Financial Institutions Examination Council (FFIEC) has now called on financial institutions and technology service providers (TSPs) to "address the risk from the continued use of XP" beyond that date.

The FFIEC is an inter-agency body that seeks to promote harmonised practices by regulators of US financial institutions such as the Board of Governors of the Federal Reserve System, the National Credit Union Administration and the Consumer Financial Protection Bureau, among other examples.

"Microsoft will discontinue extended support for XP effective April 8, 2014," the FFIEC said in a statement. "After this date, Microsoft will no longer provide regular security patches, technical assistance, or support for XP. Financial institutions, TSPs, and other third parties that use XP in personal computers, servers, and purpose-built devices such as automated teller machines (ATM), or that are dependent on applications that require use of XP could be exposed to increased operational risk.

"Potential problems include degradation in the delivery of various products and services, application incompatibilities, and increased potential for data theft and unauthorised additions, deletions, and changes of data. Additionally, financial institutions and TSPs that are subject to the requirements of the Payment Card Industry Data Security Standard (PCI DSS) and continue to use XP after April 8, 2014, may no longer be compliant," it said.

PCI DSS is the main standard related to storing payment card data and it sets out 12 requirements specifying steps which should be taken to ensure payment card data is kept safe both during and after transactions. The standard is currently in the process of being updated.

The UK's Information Commissioner has previously said that retailers that fail to store payment data in accordance with PCI DSS "or provide equivalent protection when processing customers' credit card details" could be held to be in breach of the Data Protection Act and be subject to fines.

"PCI DSS requirements are enforced through contracts and require banks, retailers and payment processing companies to develop and maintain secure systems and to 'patch' any security problems that arise particularly in public-facing online applications," technology and payments law expert Angus McFadyen of Pinsent Masons, the law firm behind Out-Law.com, said.

"If businesses using XP have not already done so, they should now be holding internal discussions about the pros and cons of upgrading the operating system they use away from XP," he said. "Upgrading is not the only option, however.

"Businesses will be able to continue to use XP after Microsoft withdraws its extended support if the risks associated with that can be managed. They will no longer be able to rely on Microsoft flagging up security vulnerabilities and fixing those problems for them, though."

Why the foot-dragging?

McFadyen said that businesses are often understandably reluctant to move away from using legacy IT systems due to the cost and time involved in undergoing such a transformational project. System reliability, business continuity and the fact that most security vulnerabilities for the technology may already have been flushed out and resolved, are among the other reasons why businesses may stick with legacy IT systems even while newer, supported systems are available, he added.

Businesses that elect to continue to use Windows XP after 8 April 2014 will have to monitor and resolve security threats specific to XP internally or engage with Microsoft or a licensed sourcing provider to provide such services on a bespoke basis if they want to manage new or existing vulnerabilities and comply with the PCI DSS regime for particular applications, McFadyen said.

However, McFadyen said that companies that experience an incident that results in payment card data being compromised can reduce the regulatory and contractual liabilities they may face if they can show that the incident occurred despite them having complied with the PCI DSS framework.

In April UK consultancy firm Camwood said it was "worrying" that a 40 per cent of respondents to a survey it commissioned had said that their companies had "yet to even start migrating off XP" and said it was "even more shocking" that 20 per cent of respondents were not planning to do so at all.

"Senior management in those organisations that have yet to start migrating may not fully understand or appreciate the level to which unsupported and unpatched environments are vulnerable to security risks," Camwood said at the time.

Copyright © 2013, Out-Law.com

Out-Law.com is part of international law firm Pinsent Masons.

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