Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Risk

5/25/2010
11:14 PM
George V. Hulme
George V. Hulme
Commentary
50%
50%

Researchers: UK's Chip and PIN Payment System Flawed

Researchers published a paper detailing an attack of intermediate difficulty that they say makes it possible for criminals to use any "Chip and PIN" smart card that they take into their possession.

Researchers published a paper detailing an attack of intermediate difficulty that they say makes it possible for criminals to use any "Chip and PIN" smart card that they take into their possession.UK banks continue to refuse to refund payments to UK customers who claim that their cards were used by someone other than themselves, and without any authorization. Recently published research may force bank's to reconsider their faith in the so-called more secure "Chip and PIN" payment architecture.

News about the attack started surfacing earlier this year, when researchers said, without providing much detail, that they had found a flaw so fundamental that it threatened the security of the entire payment system.

The report, Chip and PIN is Broken [.pdf], by three researchers at the University of Cambridge Computer Laboratory, Cambridge, UK delivers the details on how such an attack would work:

In this paper we describe and demonstrate a protocol flaw which allows criminals to use a genuine card to make a payment without knowing the card's PIN, and to remain undetected even when the merchant has an online connection to the banking network. The fraudster performs a man-in-the-middle attack to trick the terminal into believing the PIN verified correctly, while telling the card that no PIN was entered at all.

The researchers clearly show how, by my estimation, someone with a college level education in electronics could duplicate the attack. Not a very high bar for a potentially very profitable crime. Essentially the attacker would place a shim that blocks the communication between the PIN verification message from being properly achieved, and then tricking the system into thinking a signature-based transaction has been authorized:

We have shown how the PIN verification feature of the EMV protocol is flawed. A lack of authentication on the PIN verification response, coupled with an ambiguity in the encoding of the result of cardholder verification as included in the TVR [Terminal Verification Results], allows an attacker with a man-in-the-middle to use a card without the correct PIN. This attack can be used to make fraudulent purchases on a stolen card. We have shown that the live banking network is vulnerable by placing a transaction using the wrong PIN, with every major UK bank and foreign banks too. The records indeed falsely show that the PIN was verified, and the money was actually withdrawn from an account.

Now, the banks will have a harder time telling their customers that they have to eat the fraudulent charges even though they claim they didn't have their card in hand. According to this story, that ran this past February in the Telegraph, a survey found that about one in seven respondents reported having money taken from their bank account or credit card. Of those about half didn't get reimbursed for their loss, despite their insistence that they didn't use their card or authorize an account withdrawal.

Maybe they were actually telling the truth.

How does this happen? Easy. The banks design a system that pushes the risk away from them and onto the merchants and the customers that use their system. These types of systems are always about pushing liability downstream as much, if not more, than they are about security.

And the response to this paper by the banks will likely be the same as those of software and IT hardware vendors when flaws first surface. They'll probably call the attacks theoretical. They'll probably say the attack is too technical and too complicated for use in the real world. And they'll probably keep saying so until someone is caught actually using the attack technique.

For my security, technology, and business observations throughout the day, consider following me on Twitter.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
khizar_07
50%
50%
khizar_07,
User Rank: Apprentice
5/30/2013 | 10:50:41 AM
re: Researchers: UK's Chip and PIN Payment System Flawed
There are numerous attacks on the system in addition to a man-in the middle type scam. The system can be improved by using a wallet sized shim so that the user knows what he is authorizing and the pin verification done online for high value transactions.
I 'Hacked' My Accounts Using My Mobile Number: Here's What I Learned
Nicole Sette, Director in the Cyber Risk practice of Kroll, a division of Duff & Phelps,  11/19/2019
DevSecOps: The Answer to the Cloud Security Skills Gap
Lamont Orange, Chief Information Security Officer at Netskope,  11/15/2019
Attackers' Costs Increasing as Businesses Focus on Security
Robert Lemos, Contributing Writer,  11/15/2019
Register for Dark Reading Newsletters
White Papers
Video
Cartoon Contest
Current Issue
Navigating the Deluge of Security Data
In this Tech Digest, Dark Reading shares the experiences of some top security practitioners as they navigate volumes of security data. We examine some examples of how enterprises can cull this data to find the clues they need.
Flash Poll
Rethinking Enterprise Data Defense
Rethinking Enterprise Data Defense
Frustrated with recurring intrusions and breaches, cybersecurity professionals are questioning some of the industrys conventional wisdom. Heres a look at what theyre thinking about.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2019-5087
PUBLISHED: 2019-11-21
An exploitable integer overflow vulnerability exists in the flattenIncrementally function in the xcf2png and xcf2pnm binaries of xcftools 1.0.7. An integer overflow can occur while calculating the row's allocation size, that could be exploited to corrupt memory and eventually execute arbitrary code....
CVE-2019-5509
PUBLISHED: 2019-11-21
ONTAP Select Deploy administration utility versions 2.11.2 through 2.12.2 are susceptible to a code injection vulnerability which when successfully exploited could allow an unauthenticated remote attacker to enable and use a privileged user account.
CVE-2019-6693
PUBLISHED: 2019-11-21
Use of a hard-coded cryptographic key to cipher sensitive data in FortiOS configuration backup file may allow an attacker with access to the backup file to decipher the sensitive data, via knowledge of the hard-coded key. The aforementioned sensitive data includes users' passwords (except the admini...
CVE-2019-17272
PUBLISHED: 2019-11-21
All versions of ONTAP Select Deploy administration utility are susceptible to a vulnerability which when successfully exploited could allow an administrative user to escalate their privileges.
CVE-2019-17650
PUBLISHED: 2019-11-21
An Improper Neutralization of Special Elements used in a Command vulnerability in one of FortiClient for Mac OS root processes, may allow a local user of the system on which FortiClient is running to execute unauthorized code as root by bypassing a security check.