The 12:30 ITN news on ITV1 today featured a segment (video) on Chip and PIN, and should also be shown at 19:00 and 22:30. It included an interview with Ross Anderson and some shots of me presenting our Chip and PIN interceptor. The demonstration was similar to the one shown on German TV but this time we went all the way, borrowing a magstripe writer and producing a fake card. This was used by the reporter to successfully withdraw money from an ATM (from his own account).
More details on how the device actually works are on our interceptor page. The key vulnerabilities present in the UK Chip and PIN cards we have tested, which the interceptor relies on, are:
- The entered PIN is sent from the terminal to the card in unencrypted form
- It is still possible to use magstripe-only cards to withdraw cash, with the same PIN used in shops
- All the details necessary to create a valid magstripe are also present on the chip
This means that a crook could insert a miniaturised version of the interceptor into the card slot of a Chip and PIN terminal, without interfering with the tamper detection. The details it collects include the PIN and enough information to create a valid magstripe. The fake card can now be used in ATMs which are willing to accept cards, which from its perspective, have a damaged chip — known as “fallback”. Some ATMs might even not be able to read the chip at all, particularly ones abroad.
The fact that the chip also includes the magstripe details is not strictly necessary, since a skimmer could also read this, but the design of some Chip and PIN terminals, which only cover the chip, make this difficult. One of the complaints against the terminals used in the Shell fraud was that they make it impossible to read the chip without reading the magstripe too. This led to suggestions that customers should not use such terminals, or even that they wipe their card’s magstripe to prevent skimmers from reading it.
While it is possible that the Shell fraudsters did read the magstripe, wiping it will not be a defence against them reading the communication between terminal and chip, which includes all the needed details. Even the CVV1, the code used to verify that a magstripe is valid, is on the chip (but not the CVV2, which is the 3 digit code printed on the back, used by ecommerce). This was presumably a backwards-compatibility measure, as was magstripe fallback. As shown by countless examples before, such features are frequently the source of security flaws.