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Researchers Expose New Credit Card Fraud Risk
An anonymous reader writes "Researchers from the University of Cambridge have discovered flaws in the card payment systems used by millions of customers worldwide. Ross Anderson, Saar Drimer, and Steven Murdoch demonstrated how a simple paper clip can be used to capture account numbers and PINs from so-called 'tamper-proof' equipment. In their paper (PDF), they warn how with a little technical skill and off-the-shelf electronics, fraudsters could empty customers' accounts. British television featured a demonstration of the attack on BBC Newsnight."
The reason the security is so poor is because the banks don't give a s**t. It's the _merchants_ that are liable for fraud, even though it's almost entirely the fault of the banks! They banks only have to make it just good enough that it's easier for the merchants to take credit cards than cash - even after the exorbitant ($0.25 + 2.5%) processing fees that they charge just to move the bits around.
The powers that be LOVE us using credit cards. They can track us, and they can dupe the feeble-minded among us into spending our way into a lifetime of indentured servitude.
The failure of our government to (re-)introduce a $1000 bill, in spite of massive inflation, is a deliberate scheme to make it impractical for us to use untraceable funds for any substantial purchase. And it has nothing to do with tracking terrorists or drug money, it's just to keep tabs on and control over the law abiding populous.
Proprietary software AND hardware companies basically cannot be trusted. I've encountered countless amounts of commercial software, hardware products and services where the company states that they are very secure, but when investigating things myself, I find that its trivial to circumvent their security. You can read about some of the read about some of the poor security I've discovered recently with web hosting providers. Consumers deserve better than this and its all of our responsibilities to make all people aware of these problems. Ironically, this news program itself doesn't understand the value of open disclousure. I guess I can understand that as its human nature to want to hide things for fear of liability. But its not like they were doing something that's not so obvious that someone determined enough could figure out.
First rule of security in my book: Someone who wants something bad enough, they will be able to circumvent nearly anything in order to get it. So its a matter of how badly they want it. Since its money in question, I'd say that a variety of organizations and people want it pretty bad.
Damn you to hell!
Ask not what you can do for your country. Ask what your country did to you
The huge security hole in the credit card system is the users. I flipped out at one of our vendors when they STORED my credit card number in their database, and just went ahead an charged it next time I was in the store.
People will gladly give their credit card number over the phone to a shady pizza shop, just to get a 15 dollar pizza delivered to their door.
We could build the most secure credit card system in the world, but the problem is that it has to be simple enough for idiots to use.
NewslilySocial News. No lolcats allowed.
Hmm, Macgyver must have tipped them off.
End transmission.
What people are missing in this is that this pertains to certain card types mainly used in Europe. The type with RFID or embedded chips used for security. On standard US debit cards, there is no information sent to the card or from the card that ties to the PIN. The PIN is only seen by the pinpad component and immediately encrypted using a rotating DKPUT key algorithm before that, the card number and a sequence number are sent to be translated by a hardware security module. The pin pads themselves used by most US retailers are secure and do not pose a risk. If you tamper with most of those devices (example, the Welch Allyns used by best buy, lowe's and others) then the injected keys are erased and PIN translation fails. They normally don't remain out too long if they are tampered with since the stores will consider them broken and unusable when they don't work anymore. This is related to the system in place and used in the UK. The US system, while old, is only being updated currently to support the new double length key requirements and have not incorporated smart card support or RFID (except a few gas station chains). The most important thing in the US is to protect the card database since the data on the mag stripe can be used as a credit card. As for PIN security, don't tell others your pin, notice hidden cameras that look out of place and point at PIN pads and you should be safe. The way PIN numbers are stored at banks within a hardware security module is safe and those devices are very sensative to outside attack. They even employ motion sensors to prevent tampering in HSMs.
The PIN needs to be a moving target and much longer than 4 digits. Note that stateside that most automatic car washes are using at least 5 digit numbers to authenticate the sale as sold by the gas pump. (Example: SecurID or one-time pad.)
(offtopic)
My biggest pet peeve is why are account numbers (on checks) in the clear while the same is basically true of PIN numbers (without any added "salt")
For checks I would like to see the account number + check number translated a 16 to 20 digit hash of which only the bank knows how to decipher to the correct account and check number?
(/offtopic)
The Roman Rule: The one who says it cannot be done shall not interrupt the one who is doing it.
Wow. The interview at the end of that piece has me floored. Imagine if industry people and politicians in the US were subjected to this sort of probing interview and actually responded. The interviewer had the representative from the credit card companies on the ropes the entire interview. Props to the BBC for doing some serious journalism.
While it's true they don't have to do business with you, most stores will accept a $50 rather than lose out on a $55 purchase. Ditto a $100 and lose out on a $101 purchase.
It boils down to risk:
Most people passing funny money will want to get change rather than goods they can only resell at diminished value.
Also, many merchants use basic anti-counterfeit measures when accepting $20s and higher. Granted these measures have a high miss rate but they do catch amateurs.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
If you want news from today, you have to come back tomorrow.
How far you've fallen...
>> "As described in some detail in our paper, the basic attack tool is a paper clip. In order to record and analyze transactions a couple hundred pounds' worth of equipment is required, in addition to some digital design experience."
OK, a paper clip. PLUS A BUNCH OF OTHER STUFF.
Well, shoot, I could probably build an atomic weapon with a paper clip. PLUS A BUNCH OF OTHER STUFF.
Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"
It looks like you are trying to crack an account. Would you like help?
Credit cards are so incredibly insecure that the only reason people use them is that the banks so far have been willing to cover the costs of fraud (in most cases and as long as the card holder hasn't contributed to it through negligence).
This is just one more flaw.
These posts express my own personal views, not those of my employer
I've been wanting something much more sophisticated than a 'shared secret' that you have to give to anyone to give money. If I let random restaurant a charge me 2 bucks for a drink, I have to give them potentially full access to my accounts.
Where's my private/public cryptography? I want to carry around my own damned device with keypad and display. The display would show me *exactly* what my financial institution will think I'm authorizing, and the keypad would be used to enter the passphrase to decrypt my private key, which is never ever ever transferred outside of the devices local filesystem. It's generated by the device and the public portion uploaded in a secure manner to my financial institution. The secure manner is a complicated issue, but there are degrees of inconvenience that can be induced to do it right, and allow me to opt to allow nothing more convenient than that.
I go to a damn store or online retailer.. When ready to purchase, it somehow gets the data to my device (maybe encrypt with my public key, maybe direct connect to my device, maybe through the financial institution, whatever, the security risk in this transaction being the nature of what I'm buying, not in any way risking the actual money being transfered). I enter my passphrase (which could be as simplistic as a 4-digit pin, but at my discretion, not theirs) to signify accepting the terms my display gives me (i.e. authorized wal-mart to take 5 dollars from my account this one time, or authorize phone company to withdraw no more than 25 dollars on a monthly basis, the transaction may have tolerances and periodic, but always show me the tolerances and period and *who* I'm really authorizing to get the mony). With my private key decrypted, use it to sign the payload, then my financial institution *must* receive that cryptographically signed authorization to transfer payment. The retailer *never* has anything more than data to confirm that one transaction (or reuse for repeat data if I declare that trust, within definable thresholds). To commit 'identity theft' (horrible phrase), they would either need to compromise the financial institutions database with *write* access to replace my public key with their own (by the way, invalidating my real key so I should notice it) or steal my device physically, which I should know. The device should overwrite memory contents where the key was with random bytes every time it completes an authorization, and therefore physical theft or tampering should lead to a dead end without my passphrase.
XML is like violence. If it doesn't solve the problem, use more.
US Cards do not have the pin stored on the card. That's like keeping your password in your top desk drawer. This attack will not affect US Cardholders. Could you accomplish the same thing? Yes, but much more difficultly. And that's what security really is about, making a target so difficult thieves go elsewhere.
Routing number keeps the same public self (we need to send the check to the correct bank for processing.)
Account number xxxxxxxx Check number yyyyy becomes zzzzzzzzzzzzzzzz.
Issuing bank has key to turn zzzzzzzzzzzzzzzz back into original component numbers and verify that z... was not some made-up number in attempt to create a "bad check" of which there is no real account number attached to. Also xxxxxxxx, once extracted is verified to the name printed on the check. After about five or more bad values of z... in a day, a human is brought into the equation to look for the underlying cause.
If check is good, then issuing bank electronically clears the bank draft with bank (or presents cash to individual) that presented the check. This allows for a pre-verification of check prior to verifying the signature (which most banks no longer do anyways.)
I won't go into recurring drafts (automatic payments) as that makes things a bit more complicated.
The Roman Rule: The one who says it cannot be done shall not interrupt the one who is doing it.
Check numbers are incrimental and of limited permutation, again making the hash easy to brute force. If the hash changes with each check, it also becomes harder for retailers to identify bad checks based on account number. You're going to end up turning away legitimate customers money, and gain no security. By the time the check hits the bank, the fraud has been done. Also, "once extracted is verified to the name printed on the check"? Depending on your bank, this is already done. I signed a check with my right hand instead of left once(couldn't hold the pen because I messed my hand up), and I got a call a few days later about it. I'm with WaMu.
www.isoHunt.com
OK: this would make the cards somewhat bulky and since people tend to have several cards their pockets would bulge. So why not allow people to buy their own small keypads (which they trust to not have been tampered with) that they can plug their cards into and plug the whole lot into the retailer's machine.
Banks seem to think a system is secure enough as long as the number of cases where customers are exploited, are few enough. This way the bank can repay the customers with little arguing, and prevent these stories from reaching the media. In Norway there is a story that has been running in the media where a Professor at the University of Bergen and a group of students have shown that the system used by Norwegian banks to offer Banking services on the internet have flaws that can be exploited. The banks take the same route and try to claim that the system is secure and have their PR people find technical terms like calling it a theoretical attack. (Actually the attack is far from theoretical). The interesting part is how the banks just keep trying to convince the media and people in general instead of sitting down with the researchers at the University and try to find a solution. After the first case in the media, the banks worked to fix the security holes, but the researchers didn't even need a day to find a way around the new protections. Since this system is considered for a national authentication standard the appropriate minister in the Norwegian government is involved, and is siding with the professor and not the banks.
When banks deploy inadequate security, they should be liable for the distress and costs they cause their customers.