New trick by fraudsters to withdraw money from ATMs

In view of increasing incidents of Man in the Middle (MiTM) attacks on ATMs, all banks have been directed to enhance their safety norms for ATMs through end-to-end encryption in the network. In a recent communication to all banks, the Central Government has said that the MiTM attacks have been increasing under which messages sent by ‘ATM Switch’ to ‘ATM Host’ are altered by attackers to withdraw cash fraudulently.

Investigations by security agencies have found that cyber fraud gangs have started adopting a new modus operandi to withdraw money from ATMs. According to the investigators, the fraudsters first tamper with the network (LAN) cable of the ATM. Declined messages from ‘ATM Switch’ are altered to successful cash withdrawal transaction responses, and subsequently cash is withdrawn from the ATM.

The attacker first inserts a device between the ATM machine and the router or switch in the ATM premises. This device has the capability to modify the responses back from authorisation host (ATM Switch) which is connected to ATM through network. The attacker then uses restricted cards (or blocked cards) to submit a withdrawal request. When the ‘ATM Switch’ sends a declined message, the attacker in the middle alters the response to approve the transaction and subsequently withdraws cash.

In view of this modus operandi, the banks have been asked to ensure end-to-end encryption in the communication between the ‘ATM Terminal’ or PC and the ‘ATM Switch’.