Evan Schuman: Starbucks caught storing mobile passwords in clear text

In a case of convenience for users trumping security, Starbucks has been storing the passwords for its mobile-payment app, along with geolocation data, in clear text

Editor's note: Starbucks later responded to the security issues raised in this column and late on Jan. 16 updated its app.

The Starbucks mobile app, the most used mobile-payment app in the U.S., has been storing usernames, email addresses and passwords in clear text, Starbucks executives confirmed late on Tuesday (Jan. 14). The credentials were stored in such a way that anyone with access to the phone can see the passwords and usernames by connecting the phone to a PC. No jailbreaking of the phone is necessary. And that clear text also displays an extensive list of geolocation tracking points (latitude, longitude), a treasure trove of security and privacy gems for anyone who steals the phone.

The issue appears to be an example of convenience trumping security. One of the reasons for the Starbucks mobile app's popularity is its extreme ease of use. Customers need only enter their password once when activating the payment portion of the app and then use the app to make unlimited purchases without having to key in the password or username again. (Only when adding money to the app is the password required.)

Starbucks could have chosen not to store the password on the phone, but users would then be forced to key in their username and password every time they wanted to use the app to make a purchase.

"A company like Starbucks has to make the choice between usability to drive adoption and the potential for misuse or fraud," said Charlie Wiggs, general manager and senior vice president for U.S. markets at mobile vendor Mozido. "Starbucks has opted to make it very convenient. They just have to make sure that their comfort doesn't overexpose their consumers and their brand."

"Yes, it does surprise me," said Gartner security analyst Avivah Litan. "I would have expected more out of Starbucks. At least they should have informed consumers."

And apparently Starbucks could have done that. Two executives -- Starbucks CIO Curt Garner and Starbucks Chief Digital Officer Adam Brotman -- said in a telephone interview that they have known for an unspecified period of time that the credentials were being stored in clear text. "We were aware," Brotman said. "That was not something that was news to us."

The easy visibility of passwords was first discovered by security researcher Daniel Wood, who said he tried contacting Starbucks in mid-November. After repeatedly being transferred to customer service in the course of almost two months, he published some of his research for the security community on Monday (Jan. 13).

Starbucks is downplaying the potential for customers to be victimized and claims that it has made (vague and unspecified) changes that alleviate the problem. Brotman said the issue should no longer be a concern because "we have security measures in place now related to that" and "we have adequate security measures in place now." He declined to say what those security measures were, but said that customers' "usernames and passwords are safe," because Starbucks has added "extra layers of security."

Brotman didn't specifically say that the passwords are no longer appearing in clear text. About two hours after Brotman and Garner discussed the security hole, Wood reran his tests on an updated Starbucks app, using the current iOS version, and passwords and usernames were still fully visible in clear text. This time, though, he also noticed a geolocation history file, detailing his latitude and longitude numbers for every time he asked the app to find a store.

"If you grab someone's phone, you can effectively go through this log and see effectively where this person has been," Wood said. "It's a bad thing for user privacy."

Although it is certain that Starbucks' policies permitted the clear text, the file that displayed is actually part of a capture done by a third-party crash analysis app from a company called Crashlytics, which was purchased by Twitter last year. Neither Crashlytics nor Twitter returned emails and voicemail messages seeking comment.

How do the clear-text passwords endanger shoppers? A thief would need to first steal -- or at the very least borrow for 30 minutes or so -- a victim's phone. Do you feel secure because you use PIN protection on your phone? You shouldn't, says Wood. "You don't need a user's PIN in order to pull raw data off the phone using the tool and methods I have used," he said. "So if a user's phone is stolen, regardless of being PIN-protected, you are able to bypass that and access the apps Library/Cache and pull the session.clslog file." In other words, it's a simple matter for a thief to get the victim's Starbucks username and password. With those in hand, the thief could charge items to the victim's account, until all the stored value is used up.

The thief could potentially steal far more if the victim had activated an auto-replenish option, which would allow the app to repeatedly access the victim's bank account to continually add more money to the Starbucks account. Brotman said that any request for more bank funds would trigger a message to the victim -- he said it would probably be an email -- which could alert the victim to the fraud. If the victim then contacted Starbucks, the account would be shut down.

But any victim who is traveling and has email access only on her phone would not receive that fraud alert from Starbucks, and that might give the thief plenty of time to run up big charges.

Asked about that particular scenario, Garner, the Starbucks CIO, said, "What you've described is fair, at a high level. From a design perspective, this could have potentially happened." He declined commenting on more specifics because "we're getting into security measures."

I know it has to be frustrating to mount a defense in those terms. Executives like Garner are forced to say, in effect, "We've got this all taken care of, but I can't tell you how we've done that because we can't talk about our specific security measures." But Gartner's Litan isn't buying Starbucks' soft soap. "They can come up with any rationale that they want to," she said. "It's just bad security practice. You don't store passwords in the clear. Ever."

Litan added that, for many consumers, the Starbucks security fumble endangers more than the money they have loaded onto their Starbucks stored-value cards. That's because many consumers reuse passwords. "In about 20% of the cases, the password is the same as for their banks," she said. "Consumers reuse their passwords whenever they can." That's a security failing on the consumer end, and not Starbucks' responsibility, of course. But any consumer whose bank account is compromised because of Starbucks' clear-text password storage isn't going to have warm feelings toward the coffee chain. Mozido's Wiggs voiced concern that Starbucks' mobile password carelessness will hurt other mobile-payment efforts. "I don't think that the financial exposure to the consumer or to Starbucks is really material in this case," he said. "The real damage is to consumer perception. On the heels of Target, are fewer consumers going to choose to embrace mobile devices for payment because of this?"

In a column on Tuesday, Jan. 14, I encouraged companies to look at Starbucks and to emulate it's slow-go approach to mobile commerce. I still would argue that that is a good idea, but on this clear-text password thing -- not so much.

Evan Schuman has covered IT issues for a lot longer than he'll ever admit. The founding editor of retail technology site StorefrontBacktalk, he's been a columnist for CBSNews.com, RetailWeek and eWeek. Evan can be reached at eschuman@thecontentfirm.com and he can be followed at twitter.com/eschuman. Look for his column every Tuesday.

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