Bugged Retail Card Readers on a Mass Scale

Rather nasty: a gang of crooks went around bugging just one card reader at scores of different stores in a national chain. The challenge is figuring out just who they were and how they did it. A physical compromise appears likely, but did they have help from employees? Did they tamper with the devices in-situ, or did the swap out card readers for ones they’d pre-bugged?

Useful tip: When it comes to defense, take care to do attack attribution right. It’s a deadly serious business.

In this case, if the crooks were able to walk in the door and change out the readers, that will call for a very different strategy than if the attackers were staff on the take. And a whole ‘nother set of tactics if the attack starts seeming like the work of a competitor or extremely large-scale organized crime.

And hopefully people will keep shopping for books at real bookshops —
paying cash when they do. a) Amazon is incompatible with privacy, and b) flipping through books in person is absurdly useful when you’re just getting into a new subject. (Especially a visual one, as I learned when I started researching advertising design and imagery for a class… A good subject to know about in general if you’re ever looking to work for yourself, by the way.)


“Rogue PIN pad devices discovered at more than 60 Barnes & Noble stores nationwide appear to be the handiwork of a well-orchestrated financial fraud scheme that rigged just one device at each store.

The retail bookseller revealed today that it had halted use of all PIN pad devices in most of its 700 stores as of Sept. 14 in the U.S. and that the FBI is investigating the case. The compromised PIN pad devices represent less than 1 percent of the total number of these devices in Barnes & Noble stores, according to the retailer.[…]

Somehow, the criminals were able to gain physical access to the devices, which Barnes & Noble described as having been tampered with and implanted with “bugs” that let the fraudsters capture credit card and debit card PIN numbers. […]

“The devices are typically shipped with a number of tamper-resistant and tamper-evident features. However, it requires that staff are trained in inspecting the devices and identifying the hallmarks of tampering. Even then, the simple substitution of the device with a compromised one, where the criminals have spent time defeating the visible tampering defenses, can be achieved easily enough.”

There are cases where PIN pads have shipped to retailers already compromised. A source with knowledge of such a case says one large retailer discovered that its PoS devices were shipped already compromised. Employees of the device-maker were building counterfeit, rigged devices — some of which landed at that retailer. According to the source, the retailer, who he would not name, caught the problem quickly.

Security experts say poisoned PIN pads from the vendor is a very remote possibility in the Barnes & Noble case since only a single device was compromised at each of the stores, and there are some geographic trends among the locations that were affected, indicating a physical breach of some sort.[…]

Butterworth says the scam was likely an organized effort by a large group that was able to rig the PIN devices. An attacker could remove a jack from the point-of-sale device and insert a “bullet” that siphons card data entered by the consumer, saves it, and allows the attacker to retrieve it at another time, he says.

There are two types of communications that could be used here, he says: Bluetooth and cellular. “You can set it up with a buffer that when it reaches [a certain volume of information], it will initiate an outbound phone call” and dump the data to the bad guys, according to Butterworth. Or the attackers could use Bluetooth to transmit the stolen information to the attacker on-site: “A perpetrator could come in, grab a book and have a device in his hand .. and communicate to download” the stolen information, he says.

And it would bThis is a good e relatively simple to swap out a keypad when no one was looking, notes Dave Marcus, director of advanced research and threat intelligence at McAfee, a subsidiary of Intel. It would be just a matter of distracting the cashier, for instance, he says.

Damballa’s Ollmann says chip-and-pin technology, which is widely deployed in Europe but not in the U.S., would have helped protect the consumers from the attacks at the bookseller that exploited the mag-stripe card format.”


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