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"Phishing" Attacks for Consumer ATM Card Numbers and PINs Still Rife, Says Gartner
3 Million US Customers Victimized From June 2004 - May 2005
By: Jeremy Geelan
Aug. 4, 2005 02:30 AM
3 million U.S. consumers were in the past 12 months victimized by fraud involving automated teller machine (ATM)/debit cards, according to Gartner, Inc. The findings are based on a Gartner survey in May of 5,000 U.S. adults who are active online and demographically representative of the U.S. online adult population. Techniques used include "phishing" - when a cyber thief sends an e-mail with a link to a false Web site.
Gartner estimates that in the 12 months ending in May 2005, ATM/debit card fraud in the U.S. generated losses of $2.75 billion, with an average loss of more than $900. Criminals secretly are obtaining consumer banking account and password information by online phishing and keystroke logging attacks, and then using this information to hack into consumers' ATM accounts.
Most of the losses were covered by banks and other financial institutions that issued the specific ATM/debit cards exploited by thieves.
"Criminals sometimes counterfeit ATM/debit cards with just account numbers and PINs in hand, and they can use this stolen information at ATMs to withdraw cash from a cardholder's account," said Avivah Litan (pictured), vice president and research director at Gartner. "They succeed when the card-issuing bank is not validating security codes on the magnetic stripe of the card while authorizing transactions."
According to Litan, banks have the ability to stop these attacks, but many have not taken the extra steps needed to prevent them. "Banks can modify their ATM host systems to check for security data on a card's magnetic strip. This data is unknown to bank customers and, therefore, cannot be phished. Thieves generally cannot duplicate this security data unless they have insider knowledge of the bank's algorithms and security codes."
Phishing occurs when a cyber thief sends an e-mail with a link to a false Web site. The false sites typically are disguised to look like sites of banks or well-known e-commerce merchants. Recipients of these e-mail attacks are asked to provide personal account information.
"Criminals are seeking out customers of banks that are not validating ATM cards' Track 2 magnetic stripe security data during cash withdrawal transactions," Litan said. "The hackers call these banks 'cashable.' The prime candidates are banks with high cash withdrawal limits," she added.
Gartner analysts said banks must protect against all types of fraud committed against checking accounts, regardless of the channel used, such as insider theft, online banking, phone banking, and automated clearing house (ACH) transfers.
"The best defense is a transaction anomaly detection system that compares incoming transactions with profiles of what is expected from the user," Litan continued. "Anomalies are flagged for further investigation and/or subsequent interactive authentication of the user, perhaps through a phone call to the user."
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