Once the bad guys figured out how easy it was to sniff unencrypted ATM and card authorization traffic to steal track data, and after making a killing with stolen card numbers, they began setting their sights on bank PINs. PIN numbers - thanks to ANSI's TG3 - are encrypted with a half decent algorithm (and they are looking to strengthen that even more now). Which means that sniffing the traffic will only give you an encrypted number - something which would require a decryption key. A number of security controls like requiring dual control and split knowledge for key components, strict physical security requirements and Tamper Resistant Security Modules help in securing the keys. Assuming one cannot gain access to the encryption keys, this leaves only two scenarios for an attacker to gain access to the unencrypted PINs:
1. Before the PIN is encrypted by the Tamper Resistant Security Module (an ATM in the case of bank customers). Most criminals have been using fake PIN PADs and a number of other techniques like jamming and skimming to steal PINs, blissfully unaware that they are on camera most of the time. Nice video here.
2. After the PIN reaches the issuer and is decrypted. This is the scarier situation -as the attacker would have access to a database of unencrypted PIN numbers / PIN offsets coming in from all around the globe. PCI supposedly requires that issuers be compliant and not store unencrypted PANs or PINs - but does not give any guidance on how validation of this should be done(unless they are a VisaNet processor - in which case they need to validate that they are PCI compliant).
Well - Kevin Poulsen at Wired wrote today about how an alleged ATM crime spree has been blamed on a Citibank hack. While Citibank has denied the hack as the cause of the fraudulent withdrawals - all signs seem to point towards it so far.
(This definitely is not new - While testing an issuer's security I had stumbled upon ATM log entry files - complete with PAN, PIN, full name, address, zip code and ATM location - all this - back in the day when RFP had just released whisker. ) Sigh.
This is probably just the beginning of a new wave. Issuers really need to pull up their socks and begin to treat cardmember data with the same respect that PCI Co is requiring merchants and processors to do. - and while I'm wishing horses - can ANSI or someone start working on some standards for requiring all track data to be encrypted in transit too?