Gas pump skimmers are getting craftier. A new scam out of Oklahoma that netted thieves $400,000 before they were caught is a reminder of why it’s usually best to pay with credit versus debit cards when filling up the tank.
The U.S. Attorney’s office in Muskogee, Okla. says two men indicted this month for skimming would rent a vehicle, check into a local hotel and place skimming devices on gas pumps at Murphy’s filling stations located in the parking lots of Wal-Mart retail stores. The fraud devices included a card skimmer and a fake PIN pad overlay designed to capture PINs from customers who paid at the pump with a debit card.
A PIN pad overlay device for gas pumps. Photo; NewsOn6.com
According to their indictment (PDF), defedants Kevin Konstantinov and Elvin Alisuretove would leave the skimming devices in place for between one and two months. Then they’d collect the skimmers and use the stolen data to create counterfeit cards, visiting multiple ATMs throughout the region and withdrawing large amounts of cash. Investigators say some of the card data stolen in the scheme showed up in fraudulent transactions in Eastern Europe and Russia.
As the Oklahoma case shows, gas pump skimmers have moved from analog, clunky things to the level of workmanship and attention to detail that is normally only seen in ATM skimmers. Investigators in Oklahoma told a local news station that the skimmer technology used in this case was way more sophisticated than anything they’ve seen previously.
Cybercrooks can be notoriously cheap, considering how much they typically get for nothing. I’m reminded of this when I occasionally stumble upon underground forum members trying to sell a used ATM skimmer: Very often, the sales thread devolves into a flame war over whether the fully-assembled ATM skimmer is really worth more than the sum of its parts.
Card skimmer device made for Wincor/Nixdorf ATMs
Such was the fate of an audio-based ATM skimmer put up for sale recently on a private crime forum. The seller, a Ukrainian, was trying to offload a relatively pro-grade skimmer powered by parts cannibalized from an MP3 player and a small spy camera. The seller set the price at $2,450, but made the mistake of describing the device’s various parts, all of which can be purchased inexpensively from a variety of online retailers.
For example, he told forum members that the main component in the card skimmer as an MSR-605, which is a handheld magnetic stripe reader of the sort that you might find attached to a cash register/point-of-sale machine at a retail clothing store, for example.
This ubiquitous device can be had for approximately $200 at a number of places online, including Newegg.com and Amazon.com. The seller went on to describe the inexpensive flash storage drive that was incorporated in his device, and the modified tiny video camera that was hidden on the underside of a fake fascia designed to be affixed to the top of the ATM and record victims entering their PINs.
This tiny spy camera powers the fake ATM fascia that records victims entering their PINs.
The image below shows the fake fascia as it appears from the side meant to be pointed toward the PIN pad.
Experts in the United States and Europe are tracking a marked increase in ATM skimmer scams. But let’s hope that at least some of that is the result of newbie crooks who fail as hard as the thief who tried to tamper with a Bank of America ATM earlier this week in Nashville.
Nashville police released a series of still photos (which I made into a slideshow, below) that show a man attaching a card skimming device to a local ATM, and then affixing a false panel above the PIN pad that includes a tiny video camera to record victims entering their PINs. According to Nashville NBC affiliate WSMV.com, this scammer’s scheme didn’t work as planned: The card skimmer overlay came off of the ATM in the hands of the first customer who tried to use it.
As you can see in the image montage, the first would-be victim arrives less than seven minutes after the thief installs the skimmer. The story doesn’t state this, but the customer who accidentally pulled the card skimmer off of the ATM actually drove off with the device. Interestingly, the fraudster returns a few minutes later to salvage what’s left of his kit (and perhaps his pride).
As lame as this ATM skimming attempt was, a few aspects of this crime are worth highlighting because they show up repeatedly in skimming attacks. One is that the vast majority of skimming devices are installed on Saturdays and Sundays, when the crooks know the banks will be closed for at least a day. As a result, you have a much higher chance of encountering a skimmer if you regularly use ATMs on a weekend.
Second, the thieves who install these fraud devices very often are lurking somewhere nearby — to better keep an eye on their investments. If you ever happen to discover a skimming device attached to an ATM, just remember that while walking or driving off with the thing might seem like a good idea at the time, the miscreant who put it there may be watching or following you as you depart the ATM area.
Once or twice a month I am interviewed by various news outlets about ATM skimming attacks, and I’m nearly always asked for recent figures on the incident and cost of these crimes. Those stats are hard to come by; I believe the last time the U.S. Secret Service released figures about the crime, it estimated that annual losses from ATM fraud totaled about $1 billion, but that was for 2008.
Today’s figures are almost certainly higher. On Tuesday, Verizon Enterprise Solutions released its annual data breach investigations report, a deep dive into more than 620 data breaches from the past year. Interestingly, this year’s report shows that of the Top 20 Threat Actions the company tracked across all of the breaches from 2012, physical tampering was the most frequent cause — present in more than 30 percent of all incidents detailed in the report.
“Physical tampering is our way of categorizing the installation of a skimming device, and that was the number one threat action out of everything we looked at,” said Wade Baker, managing principal of RISK intelligence at Verizon. “If you look at the last two [Verizon annual] reports, a large majority of the data set was the point-of-sale intrusions at small organizations such as retail establishments and restaurants, and those are actually a much smaller portion of our data set this time.”
Credit and debit card skimmers aren’t just for ATMs anymore. According to European anti-fraud experts, innovative skimming devices are turning up on everything from train ticket kiosks to parking meters and a host of other unattended payment terminals.
Recently, at least five countries reported skimming attacks against railway or transport ticket machines, according to the European ATM Security Team (EAST), a not-for-profit organization that collects data on skimming attacks. Two countries reported skimming attacks at parking machines, and three countries had skimming incidents involving point-of-sale terminals. EAST notes that Bluetooth devices increasingly are being used to transit stolen card and PIN data wirelessly.
Skimming devices found at train ticket kiosks in Europe. Source: EAST
The organization also is tracking a skimming trend reported by three countries (mainly in Latin America) in which thieves are fabricating fake ATM fascias and placing them over genuine ATMs, like the one pictured below. After entering their PIN, cardholders see an ‘out-of-order’ message. EAST said the fake fascias include working screens so that this type of message can be displayed. The card details are compromised by a skimming device hidden inside the fake fascia, and the PINs are captured via the built-in keypad, which overlays the real keypad underneath.
Every so often, the sophistication of the technology being built into credit card skimmers amazes even the experts who are accustomed to studying such crimeware. This post focuses on one such example — images from one of several compromised point-of-sale devices that used Bluetooth technology to send the stolen data to the fraudsters wirelessly.
This point-of-sale device was one of several found in an as-yet undisclosed merchant breach.
In October 2012, forensics experts with Trustwave Spiderlabs were called in to examine the handiwork of several Bluetooth based point-of-sale skimmers found at a major U.S. retailer. The skimmers described and pictured in this blog post were retrieved from a retail breach that has not yet been disclosed, said Jonathan Spruill, a security consultant at Trustwave.
Spruill said the card-skimming devices that had been added to the small point-of-sale machines was beyond anything he’d encountered in skimmer technology to date.
“The stuff we’ve been seeing lately is a leap forward in these types of crimes,” said Spruill, a former special agent with the U.S. Secret Service. “You hate to say you admire the work, but at some point you say, ‘Wow, that’s pretty clever.’ From a technical and hardware standpoint, this was really well thought-out.”
Spruill declined to name the breached merchant, and said it was unclear how long the devices had been in place prior to their discovery, or how they were introduced into the stores. But the incident is the latest in a string of breaches involving bricks-and-mortar merchants discovering compromised point-of-sale devices at their retail stores. Late last year, bookseller Barnes & Noble disclosed that it had found modified point-of-sale devices at 60 locations nationwide.
The picture below shows the card skimmer in more detail. The entire green square circuit board with the grey square heat shield and the blue element to the left are the brains of the device. The eight-legged black component in the upper right is the memory module that stored stolen credit and debit card and PIN data from unwitting store customers.
Beneath the large grey heat shield in the center of the circuit board are the chips that control the Bluetooth radio. That entire component is soldered to the base of the board. The blue and white wires leading from the skimming device connect the skimming module to the card reader on the point-of-sale device, while the group of eight orange wires that come out of the bottom connect directly to the device’s PIN pad.
The Bluetooth point-of-sale skimmer, up close.
The image below shows the eight orange wires from the skimmer soldered to the POS device. Spruill said the quality of the soldering job indicates this was not made by some kid in his mom’s basement.
“One of the reasons suggesting that the attacker was fairly accomplished is the quality of the solder done with those very small connections to the PIN pad,” he said.
If you hand your credit or debit card to a merchant who is using a wireless point-of-sale (POS) device, you may want to later verify that the charge actually went through. A top vendor of POS skimmers ships devices that will print out “transaction approved” receipts, even though the machine is offline and is merely recording the customer’s card data and PIN for future fraudulent use.
This skimmer seller is a major vendor on one of the Underweb’s most active fraud forums. Being a “verified” vendor on this fraud forum — which comes with the stamp of approval from the forum administrators, thus, enhancing the seller’s reputation — costs $5,000 annually. But this seller can make back his investment with just two sales, and judging from the volume of communications he receives from forum members, business is brisk.
This miscreant sells two classes of pre-hacked wireless Verifone POS devices: The Verifone vx670, which he sells for $2,900 plus shipping, and a Verifone vx510, which can be had for $2,500. Below is a video he posted to youtube.com showing a hacked version of the vx510 printing out a fake transaction approval receipt.
From the seller’s pitch: “POS is ‘fake’ and stores D+P [card data and PIN], prints out approved receipt or can be setup for connection error. Software to decrypt the data is provided. It keeps d+p inside memory for manual retrieval via USB cable.”
These types of hacked POS systems, known as “offline POS skimmers” in the Underweb, are marketed for suggested use by miscreants employed in seasonal or temporary work, such as in restaurants, bars or retail establishments.
This blog has featured stories about a vast array of impressive, high-tech devices used to steal money from automated teller machines (ATMs). But every so often thieves think up an innovation that makes all of the current ATM skimmers look like child’s play. Case in point: Authorities in Brazil have arrested a man who allegedly stole more than USD $41,000 from an ATM after swapping its security camera with a portable keyboard that let him hack the cash machine.
Photo: TV Bahia
The story comes from O Estado de S. Paulo (“The State of São Paulo“), a daily newspaper in Brazil’s largest city. According to the paper, late last month a crook approached an ATM at the Bank of Brazil and somehow removed the security camera from the machine. Apparently, the camera was a USB-based device, because the thief then was able to insert his own USB stick into the slot previously occupied by the camera. As you can imagine, a scene straight out of Terminator 2 ensued.
The attacker was then able to connect a folding keyboard to the ATM’s computer and restart the machine. The newspaper story isn’t crystal clear on the role of the USB device — whether it served as a replacement operating system or merely served to connect the keyboard to the machine (it’s not hard to imagine why this would be so easy, since most ATMs run on some version of Microsoft Windows, which automatically installs drivers for most USB-based input devices).
At any rate, after the thief rebooted the ATM’s computer, he was reportedly able to type the value of the currency notes that he intended to withdraw. According to the story, the thief started by removing all of the R $100 bills, and then moved on to the R $50 notes, and so on.
A crude skimming device removed from an Inova Hospital in Fairfax, Va. last month.
As clever as this hack was, the crook didn’t get away: The police were alerted by the central bank’s security team, and caught the thief in the process of withdrawing the funds. Brazilian authorities said they believe the man was being coached via phone, but that the guy they apprehended refused to give up the identity of his accomplice. My guess is the one coaching the thief had inside knowledge about how these machines operated, and perhaps even worked at a financial institution at one point.
These kinds of attacks make traditional ATM skimmer scams look positively prehistoric by comparison. But the sad part is that even really crude skimming devices can be very lucrative and go undetected for months. I was reminded of this last week, when, for the third time in as many months, authorities discovered ATM skimmers at hospitals within a few miles of here. Local police believe the same thieves are responsible for planting all of the fraud devices, which are relatively unsophisticated but nonetheless enabled the theft of thousands of dollars over a period of several weeks.
Many security-savvy readers of this blog have learned to be vigilant against ATM card skimmers and hidden devices that can record you entering your PIN at the cash machine. But experts say an increasing form of ATM fraud involves the use of simple devices capable of snatching cash and ATM cards from unsuspected users.
Security experts with the European ATM Security Team (EAST) say five countries in the region this year have reported card trapping incidents. Such attacks involve devices that fit over the card acceptance slot and include a razor-edged spring trap that prevents the customer’s card from being ejected from the ATM when the transaction is completed.
These devices were made to capture the ATM user’s card after the user withdrawals cash. Credit: EAST.
“Spring traps are still being widely used,” EAST wrote in its most recently European Fraud Update. “Once the card has been inserted, these prevent the card being returned to the customer and also stop the ATM from retracting it. According to reports from one country – despite warning messages that appear on the ATM screen or are displayed on the ATM fascia – customers are still not reporting when their cards are captured, leading to substantial losses from ATM or point-of-sale
According to EAST, most card trapping incidents take place outside normal banking hours with initial fraudulent usage taking place within 10 minutes of the card capture (balance inquiry and cash withdrawal at a nearby ATM), followed by point-of-sale transactions.
A twist on this attack involves “cash traps,” often claw-like contraptions that thieves insert into the cash-dispensing slot which are capable of capturing or skimming some of the dispensed bills. Here are a few pictures of a cash-trapping device from an EAST report released earlier this year.
Claw-like cash trap devices found inserted into ATMs in Europe. Source: EAST.
Researchers in the United Kingdom say they’ve discovered mounting evidence that thieves have been quietly exploiting design flaws in a security system widely used in Europe to prevent credit and debit card fraud at cash machines and point-of-sale devices.
The innards of a chip-and-PIN enabled card.
At issue is an anti-fraud system called EMV (short for Europay, MasterCard and Visa), more commonly known as “chip-and-PIN.” Most European banks have EMV-enabled cards, which include a secret algorithm embedded in a chip that encodes the card data, making it more difficult for fraudsters to clone the cards for use at EMV-compliant terminals. Chip-and-PIN is not yet widely supported in the United States, but the major card brands are pushing banks and ATM makers to support the technology within the next two to three years.
EMV standards call for cards to be authenticated to a payment terminal or ATM by computing several bits of information, including the charge or withdrawal amount, the date, and a so-called “unpredictable number”. But researchers from the computer laboratory at Cambridge University say they discovered that some payment terminals and ATMs rely on little more than simple counters, or incrementing numbers that are quite predictable.
“The current problem is that instead of having the random number generated by the bank, it’s generated by the merchant terminal,” said Ross Anderson, professor of security engineering at Cambridge, and an author of a paper being released this week titled, “Chip and Skim: Cloning EMV cards with the Pre-Play Attack.”
Anderson said that the failure to specify that merchant terminals should insist on truly *random* numbers, instead of merely non-repeating numbers — is at the crux of the problem.
“This leads to two potential failures: If the merchant terminal doesn’t a generate random number, you’re stuffed,” he said in an interview. “And the second is if there is some wicked interception device between the merchant terminal and the bank, such as malware on the merchant’s server, then you’re also stuffed.”
The “pre-play” aspect of the attack mentioned in the title of their paper refers to the ability to predict the unpredictable number, which theoretically allows an attacker to record everything from the card transaction and to play it back and impersonate the card in additional transactions at a future date and location.
Anderson and a team of other researchers at Cambridge launched their research more than nine months ago, when they first began hearing from European bank card users who said they’d been victimized by fraud — even though they had not shared their PIN with anyone. The victims’ banks refused to reimburse the losses, arguing that the EMV technology made the claimed fraud impossible. But the researchers suspected that fraudsters had discovered a method of predicting the supposedly unpredictable number implementation used by specific point-of-sale devices or ATMs models.
I spent several hours this past week watching video footage from hidden cameras that skimmer thieves placed at ATMs to surreptitiously record customers entering their PINs. I was surprised to see that out of the dozens of customers that used the compromised cash machines, only one bothered to take the simple but effective security precaution of covering his hand when entering his 4-digit code.
I recently obtained the video footage recorded by that hidden ball camera. The first segment shows the crook installing the skimmer cam at a drive-up ATM early on a Sunday morning. The first customer arrives just seconds after the fraudster drives away, entering his PIN without shielding the keypad and allowing the camera to record his code. Dozens of customers after him would do the same. One of the customers in the video clip below voices a suspicion that something isn’t quite right about the ATM, but he proceeds to enter his PIN and withdraw cash anyhow. A few seconds later, the hidden camera records him reciting the PIN for his ATM card, and asking his passenger to verify the code.
Some readers may thinking, “Wait a minute: Isn’t it more difficult to use both hands when you’re withdrawing cash from a drive-thru ATM while seated in your car?” Maybe. You might think, then, that it would be more common to see regular walk-up ATM users observing this simple security practice. But that’s not what I found after watching 90 minutes of footage from another ATM scam that was recently shared by a law enforcement source. In this attack, the fraudster installed an all-in-one skimmer, and none of the 19 customers caught on camera before the scheme was foiled made any effort to shield the PIN pad.