Feeds

Too many ATMs are exposed to fraudsters, warns Gartner

Missing the middle track

  • alert
  • submit to reddit

Protecting users from Firesheep and other Sidejacking attacks with SSL

Fraudsters can get cash from ATMs because some banks fail to scan security codes in the magnetic stripes on cards, according to Gartner. Counterfeit cards are made when consumers, tricked by phishing, disclose account numbers and PINs.

According to the research firm, ATM fraud is on the rise, affecting an estimated three million US consumers in the year to May 2005, and generating losses of $2.75bn. The figures were based on a survey of 5,000 US adults.

Magnetic stripes on credit and debit cards tend to contain three 'tracks' of information. Track 1 holds up to 79 alphanumeric characters that usually encode the account number, customer name and card expiry date. Track 2 contains up to 40 numeric characters and is used to store certain encrypted security data. Track 3 holds up to 107 numeric characters but is rarely used.

Avivah Litan, vice president and research director at Gartner, explained that the security codes stored in Track 2 link the physical card to the customer's account number. But she warned that banks are neglecting this important security check.

"Surprisingly, perhaps as many as half of US-based financial institutions are not validating Track 2 security data while authorising ATM and PIN debit transactions," she said. "Most of these institutions are unaware that they, or the outsourced ATM transactions processor they rely on, should be doing so."

Ms Litan explained that criminals were targeting the customers of banks that are not validating the Track 2 data. "The hackers call these banks 'cashable,'” she said. “The prime candidates are banks with high cash withdrawal limits."

Gartner says the banks have the ability to stop these attacks by modifying their ATM host systems to check for security on a card's magnetic stripe. These data are unknown to bank customers and therefore cannot be phished, while thieves generally cannot duplicate the data unless they have insider knowledge of the bank's algorithms and security codes.

Copyright © 2005, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Related stories

Phishing gets personal
The chip and PIN insecurity card
Banks brace for cashpoint attack
The ATM keypad as security portcullis

The next step in data security

More from The Register

next story
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
Infosec geniuses hack a Canon PRINTER and install DOOM
Internet of Stuff securo-cockups strike yet again
THREE QUARTERS of Android mobes open to web page spy bug
Metasploit module gobbles KitKat SOP slop
'Speargun' program is fantasy, says cable operator
We just might notice if you cut our cables
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
YouTube, Amazon and Yahoo! caught in malvertising mess
Cisco says 'Kyle and Stan' attack is spreading through compromised ad networks
Hackers pop Brazil newspaper to root home routers
Step One: try default passwords. Step Two: Repeat Step One until success
Greater dev access to iOS 8 will put us AT RISK from HACKERS
Knocking holes in Apple's walled garden could backfire, says securo-chap
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.