Cybercrime bust highlights PIN terminal insecurity
Clear and present danger
Analysis UK police arrests of a gang reckoned to have tampered with Chip and PIN entry devices to harvest PIN numbers and cardholder details have sparked calls to revamp the security of devices.
Banking industry sources maintain that this type of fraud is rare but recent posts on underground forums suggest that the know-how on how to bypass anti-tampering protection is available for as little as $4,000.
Chip and PIN is based on the EMV standard for secure payments developed by Visa and Mastercard, so the issue has relevance far beyond the UK.
Police from the Dedicated Cheque and Plastic Crime Unit (DCPCU) recovered kit for tampering with PIN pads and hundreds of fake cards in a raid on a counterfeit card factory in Birmingham earlier this week. Two people have subsequently been charged in what is described as an ongoing police investigation.
Concerns about the security of chip and PIN first surfaced when Shell temporarily suspended the authorisation method in May 2006 following the discovery of a systematic fraud that led to losses estimated at £1m. The banking industry maintained the scam did not affect the integrity of the payment method more generally.
However Cambridge University security researchers Saar Drimer, Steven Murdoch and Ross Anderson last year revealed that two popular PEDs, the Ingenico i3300 and Dione Xtreme, fail to adequately protect card details and PINs. Data exchanged between the card and the PED during a transaction is not encrypted. By tapping this communication fraudsters can make counterfeit cards that can be used to make withdrawals from ATMs overseas that rely only on mag stripe readers, exactly the type of scam the Birmingham gang are allegedly involved in. The Cambridge research, which highlighted concerns with the evaluation and certification process, was not accepted by the banking industry.
"We have sent a report on how easy it is to attack PEDs back in November 2007 to all concerned parties: GCHQ, APACS, Visa, MasterCard, Ingenico and Verifone," Drimer told El Reg.
"We were effectively ignored until just before the report was made public by the BBC in February 2008. Then, responses included shifting blame and asserting that what we found is not really a problem. It was also made clear to us that little is about to happen as a result of our findings; PEDs will not be recalled or de-certified from use. One frequent response to our findings by APACS is that PED tampering is only possible under lab conditions."
An APACS spokeswoman said that Chip and PIN had made a big dent in fraud levels. "For fraudsters it's not a question of what's possible but what's cost-effective. Card details can be captured in a variety of ways. This is just a new technique, focused on the PIN pad. Details captured are written onto mag stripe cards and used fraudulently abroad so the attack ultimately relies on flaws with older technology.
"There's no evidence to suggest the chip was actually cracked and used in a meaningful way. If it was then chip security would be upgraded," she said.