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Cybercrime bust highlights PIN terminal insecurity

Date: August 15, 2008
Source: theregister.co.uk


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.


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