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Researchers warn of Chip and PIN relay threat

06 February 2007  |  19148 views  |  0 PED cradle

Researchers at Cambridge University are warning that fraudsters could steal Chip and PIN details while customers make purchases in stores.

Security researchers Saar Drimer and Steven Murdoch, at the Computer Laboratory, University of Cambridge, have demonstrated for the BBC's Watchdog programme how Chip and PIN terminals can be doctored to enable criminals to capture customer details in a so-called "relay attack".

For the programme, the researchers showed how they were able to intercept cardholder data during a transaction at a book shop and relay it wirelessly to an accomplice.

The attack relies on the removal and subsititution of a genuine Chip and PIN terminal with a doctored device - bought off eBay in this instance - which is presented to the unwitting customer. The fake terminal captures the details from the genuine card and this is relayed to a blank card inserted into the merchant's real terminal off-site. The PIN is also recorded by the fake terminal.

Because the payment is accepted everything seems normal to the customer. The cloned card can then be used to make further fraudulent purchases.

In a statement, the Cambridge team says: "Banks have previously claimed that if a fraudulent Chip and PIN transaction was placed, then the customer must have been negligent in protecting their card and PIN, and so must be liable. This work shows that despite customers taking all due care in using their card, they can still be the victim of fraud."

Drimer and Murdoch say this type of attack has been thought to be too difficult and expensive to implement, but they have shown that it can be accomplished for less than £250.

Says Murdoch: "We have successfully demonstrated our attack between two shops on the same street over a wireless connection, but our measurements indicate that it would work equally well, via mobile phone, to the other side of the world."

The researchers say it is unlikely that criminals are currently using this technique, as there are less sophisticated attacks which Chip & PIN remains vulnerable to, but as security is improved the relay attack may become a "significant source of fraud".

Sandra Quinn, spokesperson for the UK payments association Apacs, told the BBC that this type of fraud would be difficult because it would need an in-store accomplice and an external accomplice to work at the same time.

Quinn stold reporters there is "no evidence that this is about to happen".

Earlier this month Drimer and Murdoch managed to hack a so-called tamper resistant Chip and PIN terminal and got it to play a version of Tetris.

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