With contactless payments increasing in popularity, MWR InfoSecurity has warned consumers to be aware of the dangers from a contactless card. It also issued a reminder to retailers and banks that not all fraudulent card theft is the fault of the card owner and more needs to be done to thwart scammers.
MWR has developed an application that uses NFC (near field communication) to read
the information stored in the contactless chip embedded in credit and debit cards. Google Play currently has a number of similar apps available via its store that claim to do the same thing, plus the source code isn’t too difficult to find.
In a piece in Thursday’s Tonight programme, MWR senior research consultant – Nick Walker illustrates the simplicity of the app, and how it could be used in the wrong hands. Explaining the process he said, “Brushing past someone, the app sends a signal to the chip in the card to query the data stored.
Depending on the card type will determine just what information is returned but classically the long card number and expiry date are easily read, with the card name occasionally retrieved too. In addition, the data usually includes metadata about the cards correct usage scenarios, such as whether the card is valid for ATM cash withdrawals, or how many pin attempts are allowed before an ATM should swallow the card.
The piece that is typically missing is the CVV number [card verification value code, also referred to as CSC – card security code], however some retailers will still allow online payment transactions without this number which was introduced to prevent this type of ‘card not present’ fraud.”
Speaking about the limitations he said, “Due to limitations in the NFC technology in use, you have to be in fairly close proximity (4-5 centimeters) to be able to extract the data, but far too often I see people place a card in a breast or back pocket having made a transaction and that leaves them open to attacks like this.
The problem, I think, is that consumers just don’t know that this type of app is readily available so need to be warned that cards stored in pockets present an inviting target to modern day criminals. To mitigate this kind of attack, cards can be stored in an RFID protected wallet – which contains a metal mesh which disrupts the signal and makes it harder for a criminal to steal the details.”
Speaking about the part retailer’s play in processing payments, Nick adds, “Our research identified a number of online retailers where payments could be made without the CVV number, so enabling this verification would instantly prevent the scammer using card details obtained by such an app to make purchases.
However, this wouldn’t stop someone who had stolen the card details and perhaps visually observed the CVV number during a legitimate transaction. As part of the research, a purchase was made from an online retailer during which there were a number of opportunities for the fraudulent transaction to be spotted, that weren’t.
For example, the name of the card holder was incorrectly entered plus the billing address did not match – however neither was caught at the point the payment was taken. Even after the sale had been made, it wasn’t flagged as the order was processed and a day later the goods were delivered to my door. Retailers have a part to play to thwart ‘card not present’ crime and flags should be raised when things are amiss and transactions delayed while further checks are carried out.
“We all have a responsibility to prevent fraudulent transactions – the cardholder by making sure that they keep their details and payment cards secure; the retailer in having stringent processes in place to identify and halt suspicious activity and the acquirer [the merchant bank who processes the payment] to provide information of, or better still actual, fraud screening tools that will help guard against potential fraudulent transactions.”