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.
APACS said that it was unlikely that cardholders would be able to detect hacked terminals.
Preliminary investigation suggests the attack uncovered today relied on exploiting vulnerabilities in older PIN pads. Retailers should be wary of anybody who claims to be a service engineer for terminals as well as carrying out normal due-diligence checks on staff. Police intelligence units are sharing data with retailers and banks. "Retailers should take guidance from banks and, where possible, install the latest up to date models PIN entry devices," the APACS spokeswoman advised.
"You can never make devices tamper-proof - that's an absolute - but you can make them tamper-resistant. We welcome the research Cambridge has carried out in this area," she added.
Net security firm PrevX has spotted threads on an underground forum that suggest expertise on defeating anti-tampering protection on older PIN entry devices is readily available.
One thread, posted in early July, is from someone in the UK asking for information on how to skim Ingenico and Dione Chip-and-PIN machines, followed by a response from someone claiming to offer skimmers a tutorial on how to compromise these devices.
"This Russian guy was offering know-how on how to bypass anti-tampering protection, including schematics and a specialist bluetooth transmitter and receiver for $4,000," explained Jacques Erasmus, director of research at Prevx. "It wasn't a particularly difficult hack and just involves soldering in a few wires to hook up a bluetooth transmitter, which is used to download data from compromised devices onto a laptop running custom software."
El Reg obtained a copy of the forum post which, with PrexV's permission, it has forwarded to APACS. The thread suggests the hack is based on tapping into an unencrypted communication channel on PIN entry devices, exactly the same threat that Cambridge researchers warned about nine months ago.
Harvesting card data and PINs through fake terminals is very hard to prevent, the Cambridge researchers argue. Countermeasures should involve making sure suspicious changes are detected by back-end systems in banks.
"Payment equipment should have been properly tamper-proofed and designed such that swapping PEDs is made very difficult. This can be done by cryptographically coupling the PED and terminal such that back-end systems can detect that an unauthorized PED has been plugged in. Also, it would have been prudent to include a mechanism to detect that a PED has been unplugged from the terminal to raise an alert when it does," Saar explained.
"These are problems that must be solved by the banking industry, as cardholders can do very little against these types of fraud, other than examining their banking statements and reporting unauthorized transactions promptly," he added. ®