Fake ATM Fraud Expose

santos_douglas writes "Forget ATMs coming under attack by worms, MSNBC has this article about Dateline NBC's investigative report into fake ATMs and other ATM related scams. ATM frauds are a clever combination of social engineering and hardware hacking. The most sophisticated thefts involve the purchase and setup of real ATMs that actually do dispense cash to avoid suspicion, but are altered to save both the card's magnetic signature and the customers PIN, which are later added to false cards and used to empty bank accounts at real ATMS. The 'ATM gang' profiled managed to purchase and setup 50+ machines and steal over $4 million from over 21,000 customers. The machines can be purchased legitimately and hooked into the banking network with no more than a regular bank account. Less sophisticated attacks include building and attaching false fronts to existing ATMs to collect info, and using covert cameras to collect PINs from afar. The articles has some handy tips for avoiding scams."

Comments

Two tips

[tomstdenis]

Use banks you trust and use ATMs [or ABMs as they are called in Canada] at banks you know and trust . I'd never use a whitelabel ABM since not only do you get a surcharge but it's very easy for it to be a fake.

This isn't foolproof but much safer than using random whitelabels you find in Apu's Mealbar.

Tom

Re:Two tips

[ergo98]

A scam that recently was in the news here in Ontario is gangs that put false fronts on ATMs. The faux-fronts contain a camera over the keypad and a magnetic reader on the card reader. These were found on bank machines of the big 5 banks (BMO, TD, RBC, Scotia, and CIBC). So the moral of the story is that even if you stick to the "name-brand" bank machines, you still might get scammed. Personally I'm astounded at the intricacy involved in someone putting fake-fronts on big bank bank machines (don't these things have cameras and some sort of security? How did someone pull up and pull that off?), though I guess that's the extent that organized crime can go.

BTW: Most Canadians I know call them ATMs.

Re:Two tips

[temojen]

Count me as annother Canadian who knows noone who refers to them as ABMs.

Also, most of the chartered banks now charge a surcharge in addition to the interac fee if you don't have a card from that bank.

Re:Two tips

[Jucius Maximus]

Me: "If it's a 'white label' machine that's not operated by a bank, then it's an ABM."

You: "Anti-Bank-Missile???"

Quite the opposite. The White Label ABM business means that big banks make money. Here's How: Canada's biggest bank and one of the top 10 in North America, the RBC Financial group (formerly Royal Bank) co-owns one of the white-label ABM companies!

So let's say I am a Royal Bank customer. (This was true up until a short time ago.) Royal bank gets my money in their account and pays me less than a dollar in interest per year. And then I go to a white label machine, pay the $1.50 disloyalty fee which goes straight to RBC, pay the ABM fee to the white label company (which RBC co-owns) and then I don't use up the receipt-paper, evelopes, cause wear and tear, etc. on Royal's own machines. It's a good deal for RBC and a bad deal for me.

The bottom line is that my bank makes more money if I go to the white label machines! Even if I go to another bank's machines, I am paying Royal's disloyalty fee and making them extra money. (I pay no fee if I use Royal's own machines.)

And a note for Canadians: If you are tired of stupid bank fees and low interest rates on your balances, consider President's Choice Financial. I am a satisfied customer and do not work for them. Sure, it's owned by CIBC but I've never paid a cent in fees, I get free internet banking, free phone banking, free chequebooks, free Interac at CIBC machines, the 'points' rewards are worthwhile and attainable, and the interest rates are decent. (There are some minor downsides like spotty support for ATMs outside Canada, and most depoits over $200 except auto-payroll are delayed for 5 days so they can make interest on it. I can live with it.)

I try to avoid them altogether.

[Meat Blaster]

There's very little about ATMs nowadays to inspire confidence. It used to be that you'd stop by a trusted location to use one (like the bank) but now they're virtually everywhere and aren't always set up by trustworthy entities.

If they integrated some other forms of identification that couldn't be forged, such as biometrics or retinal scans, perhaps I'd be a bit less worried. But as things stand now credit cards are a better way to go if you're worried about recovering losses from fraud.

Re:I try to avoid them altogether.

[Ignis Flatus]

If they integrated some other forms of identification that couldn't be forged, such as biometrics or retinal scans, perhaps I'd be a bit less worried.

What difference will biometrics make if some criminal has installed a modified machine to intercept and record your biometric data?

Re:I try to avoid them altogether.

[quantaman]

If they integrated some other forms of identification that couldn't be forged, such as biometrics or retinal scans, perhaps I'd be a bit less worried. But as things stand now credit cards are a better way to go if you're worried about recovering losses from fraud.

Or a public/private key system. Say when you get your card there is some randomish value on some part of the strip that when it is decryped against the key that the ABM/ATM has they will report a value that the bank gave you when you got your card, say "BLUE" (easy enough to remember). Now when ever you use an ABM/ATM you can know it will be authentic because it will say BLUE, if an ABM says your card is RED then you call the bank to report the erroneous machine which may mean an untrustmorthy machine or the bank has changed the key. The key is changed if some crackers ever find it out then the banks will have to go to all the machines and put in a new key, they'll also have to tell everyone what their new colour is which will be a hassle but hopefully shouldn't happen with any kind of frequency if they choose a good key and have good security procedures.

Re:I try to avoid them altogether.

[sfm]

There are other ways an ATM can make your life miserable...... read on..

Once, about two years ago, I was shopping for Valentines Day gifts in a local market. The store had an ATM (and banking center) inside so I thought nothing of using their ATM for cash. As it turned out, one of the $20's that came from the ATM was counterfeit and the store clerk flagged it. Okay, so now it gets weird.....

I went immediately back to the banking center inside the store and told them what happened thinking I would be able to trade out the bad $20 for a good one. WRONG, WRONG, WRONG !!! Not only did they NOT replace the bill, but they forced me to fill out 3 pages of documentation on what happened, which was sent to the treasury department and was told to expect a call form them in a few weeks. And remember, the counterfeit $20 came from their machine.

Luckily, I was never contacted by the treasury dept or the FBI, but I am still out $20. Chalk it up to experience ?? I'll say one thing, I will never deal with "Union Bank of California" again.

Re:I try to avoid them altogether.

[ffsnjb]

VISA branded debit cards (maybe MC ones too, I don't have experience with them) in an effort to be friendly and accepted everywhere act as a credit card unless you've specified to use the debit option.

One track of the card has the CC number linked to the primary account, another has a checking account number, and a third has a savings account number. I forget the order as I haven't had access to a magstripe reader/writer since I left my sysadmin job at college (used for the student IDs). It was nice to clone my debit card when the real one got trashed by a minimum wage counter-jockey who snapped it down the magstripe while swiping the card. BTW, the account info is plaintext on the card, if you know your account numbers, you can clone a card without actually having it available.

Next time you go to the gas pumps, select the credit option with your debit card. It won't prompt you for your PIN. It will, if you select the debit option.

I'm guessing its a legacy holdover, it would be nice if PIN usage was required on CC transactions. I think its sad that the local CompUSA here still uses the imprint machines to do CC transactions. Legacy always wins in business...

Re:I try to avoid them altogether.

[wolfb]

Biometrics won't change the difficulty of electronic attacks, where the biometric signature is copied as easily as your pin number. Biometrics might make physical attacks more difficult, but still not impossible. Time and time again it is shown that biometric systems do not live up to hype. Sometimes they can be easily fooled, and sometimes the biometric signature can be used to reconstruct an acceptable fake. You can count on someone figuring out how to explit any given system sooner or later. How will you restore your security then? Can you get new fingerprints, or new eyeballs?

Yipes!

[xeno_gearz]

Talk about the ultimate in social engineering! Perhaps the best piece of advice in the article was "Keep a watchful eye on your monthly statement, as well as your balance, and report any problems to your bank." This may seem obvious but with people buying legitimate ATM's and stealing your PIN while legitimately providing your money what much else can you do?

Perhaps I should just go to the barter system. "I'll give you this cow for that rack mounted server."

Aumm, so where am I safe?

[Pavan_Gupta]

So, basically in the end, anything they do to protect me, and anything I do to protect myself (short of becoming a hermit and leaving society altogether) will still leave me wide open to identity to theft. I guess I could enter a bunch of wrong PINS in the ATM.. but then the ATM would eat up my card. Maybe I could covermyself in a black trashbag and cover the front of the ATM with it, but then the bank will be like: WTF. Hell, the thieves have already installed false fronts on the ATMs, so what choice do I have?

I guess I could start using paypal. I mean, they're safe? They probably don't have evil workers at paypal enjoying a quick id. theft, I hope? Maybe, I could just start using cash again, but where I live I'll get mugged. Shoot, if I carry cash, I've even got the possiblity of washing my pants with my money in it. That's worse than having my idenitiy stolen. Seriously .. I hate it when my leather wallet starts to rot.

Screw it. I'll be a hermit.

This is hardly new

[Kirill Lokshin]

ATM fraud like this has been reported at least since 1988. Ross Anderson presented this at a conference in 1993 Why Cryptosystems Fail mentioning that:

The fastest growing modus operandi is to use false terminals to collect customer card and PIN data. Attacks of this kind were first reported from the USA in 1988; there, crooks built a vending machine which would accept any card and PIN, and dispense a packet of cigarettes. They put their invention in a shopping mall, and harvested PINs and magnetic strip data by modem... in 1992, criminals set up a market stall in High Wycombe, England, and customers who wished to pay for goods by credit card were asked to swipe the card and enter the PIN at a terminal which was in fact hooked up to a PC.

This is really more of a problem with the lack of attention to such security issues on the part of banks than a new type of crime.

Article Highlight

[Anonymous Coward]

Best part in the entire article:

The U.S. Secret Service says the following people are wanted for questioning in connection with the $4 million ATM heist described in Dateline's story:

Bella Magary
Hungarian white male, blond hair, 5'6", with medium build, aka Bill Gates, personal ties to California.

ATMs becoming less useful

[doormat]

As fraud has increased, I've resorted to using only ATMs at the various branches of the bank I'm with, and I've switched (back) to using credit cards instead of debit cards for point-of-service purchases, so that if I get defrauded, I end up with a huge CC bill (relatively) instead of an empty bank account.

Who needs ATMs anymore?

[wowbagger]

With every bank trying to screw you for using any ATMs other than theirs, and with the level of acceptance of credit cards nowadays, who needs ATMs anymore?

It used to be that when I travelled, I carried a fair amount of cash with me. Not anymore - I simply find that I don't need it - gas, food, lodging, all are put on the credit card.

Furthurmore, should I feel the need for cash, my local grocery store allows me to get cash back from a credit card purchase. I simply make a habit of getting $40 back when I buy groceries, and then keeping about $200 at the house. Thus, I rarely if ever need an ATM under normal conditions.

It is pretty stupid - I am sure running an ATM costs a bank far less than paying for a teller, but they seem bound and determined to drive us all away from using ATMs.

Re:Who needs ATMs anymore?

[meta-monkey]

I don't think anybody's trying to screw you there, chief. Nobody puts a gun to your head and makes you use their ATM (well, they might...I didn't actually read the article, so I don't know how violent these gangs get :) ).

• Your bank publishes the charges for using an ATM outside their network, and
  
• an ATM you use will tell you the fee for using that ATM
  

I don't know why people are so pissed off about ATM fees. What, do you think the ATM fairy just drops them off all over the place for free? The machine costs money. The network costs money. Service costs money. TANSTAAFL. If you don't want to pay the fees, don't use an ATM. Like you said, there are plenty of other methods.

Re:Who needs ATMs anymore?

[dachshund]

I don't know why people are so pissed off about ATM fees. What, do you think the ATM fairy just drops them off all over the place for free? The machine costs money. The network costs money.

ATM machines are certainly not free, but they are a damned sight less expensive than the human-operated branches that banks used to provide for their customers (at no charge). In fact, cost-cutting is one of the reasons banks have consistently offered when replacing branches with ATMs. What any consumer with a brain should notice is that over the past decade or two, banks have continuously reduced their operating costs thanks to ATMs, and yet the amount of money customers tend to shell out for banking services has not decreased-- it has consistently risen. ATM fees are a big part of that.

The existence of ATM fees is due to the lack of reciprocal agreements among different banks. If bank A has thousands of machines, and wishes to provide better service for its customers, it stands to reason that it would try to enter into an agreement with another large bank B, in order to guarantee that neither banks' customers have to pay fees at ATMs belonging to either bank.

Unfortunately, experience has indicated that banks don't feel any desire to do this. In the real world, it is far more profitable for large banks to collude against their own customers through inaction-- by not creating reciprocal agreements, and collecting vast amounts of additional money through fees. This pads their bottom lines, and hey, what are customers going to do about it? There are only a few banks large enough to make such collaboration practical, and they don't seem too concerned about how much customers are paying (fees continue to rise, way ahead of inflation, despite the fact that the tech is getting cheaper.)

A similar situation exists in the world of wireless communications, where international phone companies ruthlessly assess other companies' customers absurd international roaming fees, even when the caller is only a few hundred miles from his home country. The income these corporations derive from fleecing their customers is far greater than what they would make if they chose to collaborate; since only a few companies are large enough to make this sort of agreement, and those companies make too much money off of the current arrangement, customers have nowhere to go.

Tijuana

[LittleLebowskiUrbanA]

A couple of my troops have ran into these fake ATMs in Tijuana. The fake ATMs have been there at least a couple of years from hearsay. Nasty place.

Old news... But still rampant!

[node159]

Here in New Zealand we have major bank monopoly which results in 4 banks owning the market, with very excessive charges. But as a result ATM fraud is virtualy non-existant. But internet banking fraud is at an all time high. Go figure.

On another note, this is old news and has been around for years but it suprising its still so rampant, I guess the banks must be putting most of the cost on the customers as is indicitave of their inaction.

Yeah

[iamdrscience]

Basically what you have to do is avoid random ATMs and only use ones from banks you're familiar with. This can be hard in some places but in general it doesn't take a whole lot of effort and can potentially save you a lot of trouble later on. If your ATM card gets frauded you're largely fucked because the burden of proof relies mostly on you instead of the bank, unlike credit card fraud where the company has to be able to prove that YOU went on the spending spree and not the guy that stole it.

You see credit card fraud hyped up in the media all the time, but with almost every credit card you're liable for no more than $50, whereas ATM card fraud is always mentioned as a footnote when it can really screw up peoples' finances!

Attached documentary - Card Cleaner!

[calebb]

There's a cool 10 minute Dateline documentary linked from the original article. They took a former criminal (two convictions on his record) and had him buy an ATM machine... and then he set it up in a public place. Tons of people were using it!

Out of the 12 ATM vendors, only 1 wanted to do a background check - one vendor even offered to sell it to him without a social security number.

Then, even more disturbing... he setup a sign next to the ATM that had a card swiper that said FREE! FREE! Card cleaner!! ...and a magnetic card reader on it. LOTS of people were swiping their cards through it, oblivious to the fact that it wasn't cleaning their card, but it could have been snagging their card number. A nearby camera could grab the CVS number off the back of the card. Another camera could get their PIN number.... very good article / documentary.

note: The video requires an MSN Passport account (free)

Re:Attached documentary - Card Cleaner!

[Speare]

LOTS of people were swiping their cards through it, oblivious to the fact that it wasn't cleaning their card, but it could have been snagging their card number... note: The video requires an MSN Passport account (free)

There's something ominous about requiring a swipe of my e-wallet info to view a video of a scam for people's p-wallet info.

card cleaner!

[maddu]

A card cleaner was installed next to the machines...hahaha.. How about installing a brain cleaner to clean stupidity?

they missed this brilliant fraud:

[tcd004]

WARNING:
ATM FRAUD

tcd004

What an overelaborate scheme...

[SexyKellyOsbourne]

If someone wants to obtain access to easy credit, the easiest way is to simply steal people's wallets, which filthy street urchins have been able to do since the beginnings of civilization. You don't need to spend time and money to construct an ATM, as a few 13-year old delinquients in a crowded area like a shopping mall can obtain credit cards much quicker than that.

A lot of times, bank cards can be used as credit cards, and only require a signature that is seldom ever checked against the one on the back of the card inside the US, though in the EU they actually do it. The PIN number is hardly ever needed, but all that is required to access it is a quick phone call to a bank. Just walk into Best Buy and go on a shopping spree and hit credit on the little number pad, and all they'll ever do is make you sign a receipt.

Minor safeguard...

[Magus311X]

Seperate accounts.

I've done this for a while. I have an account in which I pull out money I'll use to write checks for bills, Paypal, and to pull money from the ATM. This account usually only has another $1000-1500 in it that what is necessary for the bills.

I have another account in which the money is meant to sit there unless there's an emergency. I can write checks with this account, but I never do (so if there's a check written from it on my statement, I'd call the bank ASAP). My ATM isn't tied to this account. Paypal will never it ever exists. And half of the money is always purposely tied up in fairly short-term CDs.

-----

Thanks for the tips, but

[fruity1983]

The articles has some handy tips for avoiding scams."

That's nice, but what we really need are tips on how to set these scams up.

I'm unemployed.

Looks like the problem...

[FFFish]

...is mere greed. I mean, shit, $4 million in theft? Come on, guys, get a clue! A mere half-million would have been enough to purchase a really nice house and car, go on a great vacation, and give a big chunk to charity. A million would have you nicely comfortable for life.

Four million, though? Damn, you deserve to get caught.

phishing expeditions

[hedley]

ATM's have long been such a target. Whne my bank back in NYC (Citibank) installed the old drum ATM's (try the code 1 1 2 3 5 :)), these rooms were vulnerable to people coming in right after you were done and hadn't signed out. Also the drum was weak, it would lose money around it's circumference and wasted your time for the end of day count to get your money back.

Of course the usual robberies occured in the rooms themselves, forcing individuals to "dip" and enter their pins. Or getting pin jacked.

Face it, we need these machines until the fabled cashless society kicks in. In the meanwhile, use your banks ATM (also avoids service charges). Avoid all other ATMs.

Thinking about it, in the context of those "virtual credit card numbers", imagine a special PIN that is good for one transaction. If you are uncertain of a particular ATM or get pin jacked, give over the one time PIN#. Later, visit their website to activate/deactivate that magic pin.

Hedley

Non-biometrics solution

[product byproduct]

I would prefer to use an electronic key that when interfaced with an ATM will happily raise any given number to my secret exponent modulo my public key.

For each transaction, my bank will send a random challenge to the ATM that only my electronic key can solve.

Possible solution

[cartman]

Clearly what's necessary is to have a small keypad on the card itself, as well as a small CPU, a private key that is encrypted by the user's PIN, and the public key of the bank. That way, all communication between the card and the bank can be encrypted, and no unencrypted information is ever sent through the ATM.

Such a card would not be much larger than current ATM cards.

The worst fraud that could then be perpetrated is to have a fake ATM that deducts $20 from your account but without dispensing the $20. But that scheme would be very quickly identified.

Re:in Canada...

[Jucius Maximus]

"And this was all legal, no recourse was possible. I wonder who made off with the 'big money' though, my bank, the ATM company, or the chinese food joint."

The 'white label' ones (called ABMs) are operated privately and whatever restaurant or convenience store owns them can charge whatever service fees they want. I live in Canada and I never ever use the white label machines. The cost is insane. You were hit with the 'disloyalty fee' from your bank for not using their machine (not that there was one,) a PLUS/Cirrus fee for international transactions, a currency change fee from your bank, whatever normal fee is levied by the ABM's owner, and maybe a currency exhange fee levied by the ABM's owner.

If you had gone to a machine that was actually run by a bank (an ATM) then the service charges would have been much lower. Banks generally have lower surcharges than white label machines.

atms on ebay

[upt1me]

There are also ATM machines on ebay for sale.

Re:in Canada...

[MarcQuadra]

Thinking about this got me riled up enough to pull out my banking records, it looks like my bank (Fleet) made quite a bit, by charging a huge 'exchange fee' and whoever sat at the Canadian-end of the deal took about $10 CAN as a "service charge".

It cost me $40 US, but my bank charged everything after $30 CAN.

I'm so pissed at Fleet, I've watched them switch around my transactions so they can charge overdraft fees. I sat and WATCHED online as my paycheck clearing time changed to AFTER the bills were paid so they could nail me with $75 in fees. I called them right after and told them that if I didn't get my $75 back I'd get a lawyer involved, they gave it right back. If my identity weren't stolen (long story) I'd open an account with Citizens Bank right now, I used to work there so I'd know who to call and yell at.

Whew. Don't drink, bank, and slashdot!

Re:in Canada...

[Mnemia]

Weird. I used my US debit card quite extensively in Japan this spring and I never got charged all those fees you are talking about. Granted, I was mostly using government-run ATM machines while there that I believe do not charge fees even if you are not a customer. But my bank sure didn't charge me any "disloyalty" or any of those currency exchange fees you are talking about. I was getting a pretty competitive exchange rate too (I was monitoring the amount actually debited from my account using Internet banking).

atm security is pathetic

[Anonymous Coward]

I should know, I worked with a company that provided them. All I can say is that after working there for a week, I was scared to put my card in one.

This is one of those instances where security by obscurity is obviously working, at least somewhat... as most people don't have access to one to play around with.

They use absolutely no encryption, as they are not required to until something like 2006. And even though it's there, it's not on (at least with Diebold machines). Many have a network cable running into the back of them, so you could plug in a hub and sniff the data. What will this get you? It will get you the ip of the authentication server it talks to and the format of the responses. This would allow you to forge your own authentication server and use some network trickery with a linux box or two and a hub/switch to make any card run through the machine be accepted.

The ones that don't have network cables usually have phone lines. A little known fact is that if you plug two modems together directly, you can still dial the other one and it will pick up and negotiate. You could certainly use this to stick a linux box in between and sniff the data that goes over the network and perform something similar to the above.

Probably the most secure ones are the ones that use GSM or GPRS to communicate as you'd need some expensive equipment to do anything with that, and they are typically inside the unit, so you'd have to break it open somehow so you can't get at the wires.

There are methods in use right now that the ATM companies have absolutely no idea how they work. I'd see memos floating around all the time. They put machines under surveillance for months, and all of a sudden, everyone who had used the machine got ripped off. Yet, no one, as far as they could tell, ever physically did anything to the machine. Theives are using some really sophisticated techniques right now, and about the only way to thwart this is to start using crypto, both for transit, and on your card.

Oh, ever wonder why most machines have been retrofitted with a card swiper instead of an eater? It's because people were putting stuff inside of it so cards would jam, and then they would sit across the parking lot with a spotting scope and watch a person type their pin. When the person couldn't get their card out and left, they would come by with a little extraction tool, take the card, and go on an ATM spree.

Posting AC - Information you should know.

[Anonymous Coward]

I'm posting this AC because I don't want my friends/coworkers who surf slashdot to associate my nick with this post.

I work for the largest company in the USA that verifies the transaction between the bank and the cardholder. We are as you could put it, an ISP for ATM's. We are very large, and I've worked for them for quite a number of years.

We heard about these scams a few years ago, it's nothing new. There are a few things you can do to protect yourself.

1. Wait for a prompt before entering your pin number. I have never heard of a "cover" system so complex that they will respond correctly on the screen when a card is put in the slot. Rogue ATM's are another matter.

2. If a white box ATM eats your card, call your bank immediately to report the card stolen/eaten. This is because most of these systems are just a camera and a box to hold stolen cards and pin numbers. Unfortunately the days of getting your card back when it gets eaten are gone. With new regulations there's just no way, get a new one.

3. All ATM's in this country (usa) are required by law to have a phone number of the institution that is authorizing the transactions, and a notice of surcharge on it. If you don't see those, then there could be "something" covering them. They went to a lot of work to make that fake ATM cover, why would they want you alerting someone who would send out a repair technician?

Please don't go clamoring for more regulation. A lot of the regulation in place keeps us from properly helping people in distress, and does almost nothing to help secure them. Besides, most people only need securing from themselves.