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.
News
Inside the Ransomware Campaigns Targeting Exchange Servers
Kelly Sheridan, Staff Editor, Dark Reading,  4/2/2021
Commentary
Beyond MITRE ATT&CK: The Case for a New Cyber Kill Chain
Rik Turner, Principal Analyst, Infrastructure Solutions, Omdia,  3/30/2021
Register for Dark Reading Newsletters
White Papers
Video
Cartoon
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you today!
Flash Poll
How Enterprises are Developing Secure Applications
How Enterprises are Developing Secure Applications
Recent breaches of third-party apps are driving many organizations to think harder about the security of their off-the-shelf software as they continue to move left in secure software development practices.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2021-29450
PUBLISHED: 2021-04-15
Wordpress is an open source CMS. One of the blocks in the WordPress editor can be exploited in a way that exposes password-protected posts and pages. This requires at least contributor privileges. This has been patched in WordPress 5.7.1, along with the older affected versions via minor releases. It...
CVE-2021-21405
PUBLISHED: 2021-04-15
Lotus is an Implementation of the Filecoin protocol written in Go. BLS signature validation in lotus uses blst library method VerifyCompressed. This method accepts signatures in 2 forms: "serialized", and "compressed", meaning that BLS signatures can be provided as either of 2 un...
CVE-2021-29430
PUBLISHED: 2021-04-15
Sydent is a reference Matrix identity server. Sydent does not limit the size of requests it receives from HTTP clients. A malicious user could send an HTTP request with a very large body, leading to memory exhaustion and denial of service. Sydent also does not limit response size for requests it mak...
CVE-2021-29431
PUBLISHED: 2021-04-15
Sydent is a reference Matrix identity server. Sydent can be induced to send HTTP GET requests to internal systems, due to lack of parameter validation or IP address blacklisting. It is not possible to exfiltrate data or control request headers, but it might be possible to use the attack to perform a...
CVE-2021-29432
PUBLISHED: 2021-04-15
Sydent is a reference matrix identity server. A malicious user could abuse Sydent to send out arbitrary emails from the Sydent email address. This could be used to construct plausible phishing emails, for example. This issue has been fixed in 4469d1d.