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The Future Of ATM Hacking

Research released at Black Hat USA last week shows that one of our best defenses for the future of payment card and ATM security isn't infallible. Here's why.

The main players in the criminal enterprise will still be mostly the same, but there would be some new twists.

  • People at the point-of-sale who've installed shimmers. A "shimmer" is effectively a skimmer, installed on the PoS device, except it lifts EMV card data intstead of magstripe data.
  • Carders, running a marketplace on the Internet. Instead of selling card data to fraudsters, carders now sell them locations, times, and numbers of transactions: where, geographically speaking, would you like to withdraw cash from, when, and how many times? 
  • Fraudsters, at the ATM, using the "La-Cara" automated cash-out machine built by Hecker.

The La-Cara device includes components that are both inserted into where the card goes and lay over the PIN keyboard and flashable EMV card system. However, they won't set off any of the Foreign Object Detect systems that a skimmer would.

When a customer makes a purchase at a PoS compromised by a shimmer, the carding network, as a man-in-the-middle, intercepts the temporary identifier and passes it on to the La Cara device, via a secure channel. There is a trusted relationship between the La Cara device and the shimmer it is associated with for this transaction. The customer's transaction goes ahead normally, and the fraudster is able to withdraw cash before the transaction data expires. According to Hecker's research, the La Cara device costs about $2,000 to construct, and can cash out between $20,000 and $50,000 in 15 minutes.

Geographical proximity to the victim is a benefit for any attacker trying to cash out, because it's less likely to set off fraud alerts (although with a man-in-the-middle in this case, the evidence of fraud could be edited out, Beardsley says). However, proximity is particularly helpful in this attack -- the La Cara device needs to communicate with the shimmer through a secure connection, and the further apart they are, the higher the latency, and when time is so limited, that could foil the attack. 

Right now, attacks on EMV are not "really favored," acknowledges Rapid7 Security Research Manager Tod Beardsley. However, Hecker's research is important now, he says, because EMV "may not be as secure as it's cracked up to be," and eventually it will become the favored technology in the US and attackers will catch up.  

Attackers aren't likely to make a strong move to EMV attacks, Beardsley says, "until your magstripe victim pool dries up." That won't happen right away, he says, because in the US very few ATMs are equipped for chip-and-PIN right now. Further, Mastercard and VISA are not yet holding ATM operators that don't accept EMV liable for counterfeiting or fraudulent activity that result from their outdated equipment. Mastercard is instituting the liability shift for ATM operators in October, and VISA in October 2017. However, "Once the liability shift happens," says Beardsley, "you'll see the magstripe [withdrawal] limits capped." When people are only able to take out $40 of cash with their magstripe cards, upgrades may move more quickly.

Some of the necessary changes to ATM machines might be minor, mechanical additions. 

"[La Cara] would be stopped cold if a door closed behind the card," says Beardsley. (Since the La-Cara device would include components inside the machine that need to connect by cables to components outside the machine, the device would simply fail.) 

Unfortunately, many ATM operators are reluctant to make hardware upgrades, says Beardsley. Instead they merely bolt on "EMV upgrade kits" to their existing gear. This effectively creates more middleware, which adds another attack surface that could be exploited.

Beardsley says that ATM manufacturers and other Internet of Things manufacturers need to recognize that now they're selling software and services, not just hunks of hardware.

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Sara Peters is Senior Editor at Dark Reading and formerly the editor-in-chief of Enterprise Efficiency. Prior that she was senior editor for the Computer Security Institute, writing and speaking about virtualization, identity management, cybersecurity law, and a myriad ... View Full Bio

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User Rank: Apprentice
8/11/2016 | 2:53:14 PM
ATM Security
I remember the May ATM scandle Japan. I wonder if using the chips in ATM's would help reduce the fraud. Seems to be working everywhere else..
User Rank: Apprentice
5/8/2017 | 12:48:53 PM
Re: ATM Security
hi there
User Rank: Apprentice
8/13/2016 | 8:11:25 AM
Thanks for this nice post!
I love this blog and its posts!
User Rank: Moderator
8/13/2016 | 2:14:38 PM
Security Cost vs. Risks
"Unfortunately, many ATM operators are reluctant to make hardware upgrades..."


It's all about costs vs. risks.  If the costs of better security is more than the damage of the risks, decision makers would continue to avoid 'costly' security until the damage itself becomes far more costly.  It's the same thing with EMV adaption with merchants: when VISA & Master Card made the ones that won't adopt EMV bear the fraud damage, the adoption became far more wide spread. Until the manufacturers/operators start to bear More of the damage responsibility, there would continue to be poor security with ATMs.  
User Rank: Moderator
8/28/2016 | 10:23:41 PM
Re: Security Cost vs. Risks
you're rght andrew, cost is the main driver when choosing a defense against hackers. the problem will always be that hackers only have to invest in the first target, once hacked, there is no cost for them to replicate the hack again across infinite targets. however, banks, institutions, etc have a huge initial cost for the solution, and then multiplied to implement across every customer they have. this is why the hackers will have a "cost" advantage until a better solution is found
User Rank: Ninja
7/31/2017 | 3:31:47 PM
Re: Security Cost vs. Risks
It should be noted that by deferring costs for securing a user's private data or money (even though insured, its still your money being attacked since your personal info is attached to it) rather than fixing a known problem (or an anticpated problem) a company risks alienating customers and breaking a very fundamental business ethics practice.  We need to get better at saving money early on in the process so we can put due diligence into the design, secure early on to avoid such exploits, and maintain ethical relationships with our customers.  Heck, we could even use some of the money saved on operational security monitoring...
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