Attacking Bank-Card PINs
Research paper by Omer Berkman and Odelia Moshe Ostrovsky: “The Unbearable Lightness of PIN Cracking“:
Abstract. We describe new attacks on the financial PIN processing API. The attacks apply to switches as well as to verification facilities. The attacks are extremely severe allowing an attacker to expose customer PINs by executing only one or two API calls per exposed PIN. One of the attacks uses only the translate function which is a required function in every switch. The other attacks abuse functions that are used to allow customers to select their PINs online. Some of the attacks can be applied on a switch even though the attacked functions require issuer’s keys which do not exist on a switch. This is particularly disturbing as it was widely believed that functions requiring issuer’s keys cannot do any harm if the respective keys are unavailable.
Basically, the paper describes an inherent flaw with the way ATM PINs are encrypted and transmitted on the international financial networks, making them vulnerable to attack from malicious insiders in a bank.
One of the most disturbing aspects of the attack is that you’re only as secure as the most untrusted bank on the network. Instead of just having to trust your own issuer bank that they have good security against insider fraud, you have to trust every other financial institution on the network as well. An insider at another bank can crack your ATM PIN if you withdraw money from any of the other bank’s ATMs.
The authors tell me that they’ve contacted the major credit card companies and banks with this information, and haven’t received much of a response. They believe it is now time to alert the public.