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Gonzalez: The Al Capone Of Cyber Thieves?

August 19th, 2009

The attacks began with Gonzalez and others “reviewing a list of Fortune 500 companies,” to identify targets that would likely have tons of credit card data on file. “It was further part of the conspiracy that Gonzalez and P.T. would travel to retail stores of potential corporate victims, both to identify the payment processing systems that the would-be victims used at their point of sale terminals and to understand the potential vulnerabilities of those systems. It was further part of the conspiracy that P.T. would also visit potential corporate victims’ websites to identify the payment processing systems that the would-be corporate victims used and to understand the potential vulnerabilities of those systems.”

Other research: They tested their malware “against approximately 20 different antivirus programs.”

They would create backdoors and install sniffers to “capture credit and debit card numbers, corresponding card data and other information on a real-time basis as the information moved through the Corporate Victims’ credit and debit card processing networks, and then periodically transmit that information to the coconspirators.” The malware also erased some evidence of the attack, according to the indictment (and, for that matter, common sense).

One retail security expert, who agreed to discuss the indictment if neither her name nor employer was identified, said much in the indictment points out inherent weaknesses in PCI.

The back door approach used, a time-honored hacking technique for decades, is a red flag. “Being on the inside, these probably would have passed right through firewalls as the data would be travelling in the ‘safe’ direction. Also note that any gains a company would have from a password rotation scheme would be negated by the installation of a back door. My main point there is that password rotation schemes are not an effective defense, and shouldn’t be elevated to such by PCI or corporate ‘security policies.’ In any case, Hackers 2, PCI 0.”

Another concern that she listed involved Heartland details. “The attackers installed sniffers to capture the traffic, they did not harvest data intentionally stored by Heartland on hard drives. PCI doesn’t say anything about encrypting data on private networks, only that you must protect stored cardholder data or encrypt data traveling over open, public networks. And the networks obviously have the business need-to-know, that’s what they do: carry data. That’s a three-point shot for the Hackers; Hackers 6, PCI 0.”

She also questioned the PCI requirement to update antivirus software. There’s no doubt it’s a good thing to do, but she pointed to the indictment as evidence it won’t block any serious attack. “The hackers coded their own malware and tested their code against 20 anti-virus programs (I didn’t even know there were 20 AV programs out there!) Of course custom code is not going to be recognized as viral, especially if it performs no viral behaviors,” the expert said.


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Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

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