How difficult would it be to tamper with PIN pads at 63 different stores, across nine states? "This is no small undertaking," Edward Schwartz, the chief security officer at RSA, told the Times. "An attack of this type involves many different phases of reconnaissance and multiple levels of exploitation." In addition, the attacks are notable for the geographic distance between affected stores.
The complexity involved in the attacks has led some security observers to conclude that it must have been an inside job. In an emailed statement, Gunter Ollmann, VP of research for computer security firm Damballa, said that with only one PIN card reader having been hacked per store, it didn't "smell of a supply chain problem," meaning it was unlikely "that a batch of card readers were compromised at the manufacturers or distribution center." In addition, most PIN pad attacks require attackers to return to the terminal to retrieve intercepted data, sometimes repeatedly.
One possibility is that the Barnes & Noble attackers installed card skimmers in the PIN pads. Although the Payment Card Industry Data Security Standard (PCI DSS) requires all stored credit card data to be encrypted--and states exempt businesses from having to notify customers of data breaches, if the information was encrypted--PIN-pad skimmers literally tap into the available data before it even has a chance to be stored, by capturing it at the moment that a card gets swiped.
Last year, attackers used skimming technology to compromise data from 90 PIN pad terminals--across 20 states--at arts and crafts outlets owned by Michaels Stores. Rather than literally forcing open the PIN pads in-store and inserting a skimming chip, however, security experts suspect that attackers might have performed a social-engineering attack, and while a cashier was distracted, physically swapped the existing PIN pads for a lookalike version that already had a skimmer installed.
Unfortunately, attacks against PIN card terminals continue to grow more sophisticated. At the Black Hat information security conference earlier this year, for example, researchers demonstrated a proof-of-concept PIN pad attack against terminals available in Europe, in which they used a Trojan credit card to infect the terminal with malware, which began recording all available card information, including debit card PIN codes. When an attacker returned and reinserted their card in the terminal, the malware copied all of the stolen, stored data back onto the card, then deleted itself to hide all signs of the attack.
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