Addressing the Wendy’s Data Breach Proves Difficult Due to Size of Breach and Company’s Structure

As discussed earlier, Wendy’s announced that it was investigating a possible breach of its point of sale systems (“POS”), after the company was alerted of “unusual activity” involving customers’ credit or debit cards at some of its locations. An earlier Wendy’s press release stated “[b]ased on the preliminary findings of the investigation and other information, the Company believes that malware, installed through the use of compromised third-party vendor credentials, affected one particular point of sale system at fewer than 300 of approximately 5,500 franchised North America Wendy’s restaurants, starting in the fall of 2015.”

It has been reported by Security expert Brian Krebs that “some breached Wendy’s locations were ‘still leaking’ customer card data at the end of March 2016 and into early April.” A statement by Wendy’s spokesman Bob Bertini said, in response to questions about the duration of the breach at some stores, “[a]s you are aware, our investigator is required to follow certain protocols in this type of comprehensive investigation and this takes time. Adding to the complexity is the fact that most Wendy’s restaurants are owned and operated by independent franchisees.”

It has been opined that the extent and duration of the breach was a result of its size. Specifically, Tod Beardsley, security research manager at cybersecurity specialist Rapid 7, stated that the “fact that the breach affected only 5 percent of Wendy’s locations was likely a contributing factor to its success. A small footprint is much more difficult to detect, since the patterns resulting from the fraud take longer to materialize.” Unfortunately, the detection time allows the individuals involved to go on spending sprees comprised of unauthorized purchases well after the breach took place.

At this time it seems investigators are still trying to wrap their arms around the problem so we may not know the extent and duration of this breach for some time.