“Marriott International Inc said on Friday that hackers accessed up to 500 million customer records in its Starwood Hotels reservation system in an attack that began four years ago, exposing data including passport numbers and payment cards,” Jim Finkle and Arjun Panchadar reports for Reuters. “Shares were down 5.7 percent in late afternoon trade on news of the hack, one of the largest in history, which prompted regulators in Britain and at least five U.S. states to launch investigations.”

“The Federal Bureau of Investigation said it was looking into the attack on Starwood, whose brands include Sheraton, St. Regis, W and Westin hotels. It advised affected customers to check for identity fraud and report it to the bureau’s Internet Crime Complaint Cente,” Finkle and Panchadar reports. “The hack began in 2014, a year before Marriott offered to buy Starwood to create the world’s largest hotel operator. The $13.6 billion deal closed in September 2016.”

“Some 327 million customer records containing information including passport details, birthdates, addresses, phone numbers and email addresses were exposed, according to the company. The hackers also accessed payment card data for an undisclosed number of customers, the company said,” Finkle and Panchadar reports. “The company said on its website that it learned of the breach on Sept. 8 when an internal security tool sent an alert about suspicious activity… Company representatives could not be reached to comment on the lawsuit, government investigations or to explain why it had taken so long to uncover and disclose the hack.”

“The breach appeared to be the second-largest on record, based on records compromised, after one at Yahoo in 2013 that exposed all of its 3 billion user accounts. That incident cost $47 million in litigation expenses and prompted Verizon Communications Inc. to cut $350 million off the price it paid when it acquired most of Yahoo,” Finkle and Panchadar reports. “Retailers Target Corp and Home Depot Inc each incurred costs of about $200 million after massive payment-card breaches in 2013 and 2014.”

Read more in the full article here.

MacDailyNews Take: Once again, the importance of safeguarding security and privacy are highlighted. At least this colossal nightmare is good news for Apple.

Good luck, fellow SPG members!

Marriott’s statement, verbatim:

Marriott Announces Starwood Guest Reservation Database Security Incident

Marriott has taken measures to investigate and address a data security incident involving the Starwood guest reservation database. On November 19, 2018, the investigation determined that there was unauthorized access to the database, which contained guest information relating to reservations at Starwood properties* on or before September 10, 2018.

On September 8, 2018, Marriott received an alert from an internal security tool regarding an attempt to access the Starwood guest reservation database in the United States. Marriott quickly engaged leading security experts to help determine what occurred. Marriott learned during the investigation that there had been unauthorized access to the Starwood network since 2014. The company recently discovered that an unauthorized party had copied and encrypted information, and took steps towards removing it. On November 19, 2018, Marriott was able to decrypt the information and determined that the contents were from the Starwood guest reservation database.

The company has not finished identifying duplicate information in the database, but believes it contains information on up to approximately 500 million guests who made a reservation at a Starwood property. For approximately 327 million of these guests, the information includes some combination of name, mailing address, phone number, email address, passport number, Starwood Preferred Guest (“SPG”) account information, date of birth, gender, arrival and departure information, reservation date, and communication preferences. For some, the information also includes payment card numbers and payment card expiration dates, but the payment card numbers were encrypted using Advanced Encryption Standard encryption (AES-128). There are two components needed to decrypt the payment card numbers, and at this point, Marriott has not been able to rule out the possibility that both were taken. For the remaining guests, the information was limited to name and sometimes other data such as mailing address, email address, or other information.

Marriott reported this incident to law enforcement and continues to support their investigation. The company has already begun notifying regulatory authorities.

“We deeply regret this incident happened,” said Arne Sorenson, Marriott’s President and Chief Executive Officer. “We fell short of what our guests deserve and what we expect of ourselves. We are doing everything we can to support our guests, and using lessons learned to be better moving forward.”

“Today, Marriott is reaffirming our commitment to our guests around the world. We are working hard to ensure our guests have answers to questions about their personal information, with a dedicated website and call center. We will also continue to support the efforts of law enforcement and to work with leading security experts to improve. Finally, we are devoting the resources necessary to phase out Starwood systems and accelerate the ongoing security enhancements to our network,” Mr. Sorenson continued.

Guest Support
Marriott has taken the following steps to help guests monitor and protect their information:

Dedicated Website and Call Center
We have established a dedicated website (info.starwoodhotels.com) and call center to answer questions you may have about this incident. The frequently-asked questions on info.starwoodhotels.com may be supplemented from time to time. The call center is open seven days a week and is available in multiple languages. Call volume may be high, and we appreciate your patience.

Email Notification
Marriott will begin sending emails on a rolling basis starting today, November 30, 2018, to affected guests whose email addresses are in the Starwood guest reservation database.

Free WebWatcher Enrollment
Marriott is providing guests the opportunity to enroll in WebWatcher free of charge for one year. WebWatcher monitors internet sites where personal information is shared and generates an alert to the consumer if evidence of the consumer’s personal information is found. Due to regulatory and other reasons, WebWatcher or similar products are not available in all countries. Guests from the United States who activate WebWatcher will also be provided fraud consultation services and reimbursement coverage for free. To activate WebWatcher, go to info.starwoodhotels.com and click on your country, if listed, for enrollment.

Marriott is furnishing a Form 8-K with the SEC attaching a copy of this press release and presenting certain other information with respect to the incident.

* Starwood brands include: W Hotels, St. Regis, Sheraton Hotels & Resorts, Westin Hotels & Resorts, Element Hotels, Aloft Hotels, The Luxury Collection, Tribute Portfolio, Le Méridien Hotels & Resorts, Four Points by Sheraton and Design Hotels. Starwood branded timeshare properties are also included.

Marriott International, Inc.