Doctored payment machines could be used to lift confidential authorisation codes from Chip and PIN credit and debit cards, security researchers at Cambridge University have discovered.

Shoppers attempting to use fake terminals to make purchases might unwittingly allow scammers to hijack details and make fraudulent purchases using counterfeit cards at another shop. Card identity codes would be sent wirelessly from crooks running fake terminals to accomplices buying goods so that fake cards are accepted as genuine. The PIN is then sent from the fake terminal to the accomplice so fraudulent purchases can be authorised.

Cambridge University researchers are due to demonstrate the attack on Tuesday's edition of the BBC's consumer rights magazine show Watchdog. The programme features a demo of a cardholder's details being intercepted during a transaction in a book shop and sent to an accomplice via a wireless connection.

UK banking association APACS played down the threat of the attack by saying there's no evidence that the technique has been applied to make fraudulent purchases. "I think we should be more concerned about other types of fraud - there is no evidence that this is about to happen," Apacs' Sandra Quinn told the BBC.

Cambridge University researcher Steven J Murdoch agrees that it's unlikely criminals are currently using this so-called "Chip & Spin" attack, since the next-generation cards remain open to less sophisticated attacks. But, he argues that defences against the attack ought to be applied sooner rather than later to prevent relay attacks becoming a significant cause of fraud in the future. ®

Related stories

• Updated Cloned US ATM cards: Can they fool Brit self-service checkouts? (29 August 2008)
• Analysis UK fraudster gang go PIN sniffing (21 August 2008)
• Analysis Cybercrime bust highlights PIN terminal insecurity (13 August 2008)
• Criminals hijack terminals to swipe Chip-and-PIN data (13 August 2008)
• Online banking payment system aims to reduce fraud (18 March 2008)
• Foreign losses jack UK plastic fraud up to £535.2m (12 March 2008)
• Updated Paper clip attack skewers Chip and PIN (27 February 2008)
• Online sellers warned on UK cheque clearance changes (28 November 2007)
• Fraud abroad drives up card losses (3 October 2007)
• Barclays deploys PINsentry to fight fraud (18 April 2007)
• Payday delayed for 400,000 (30 March 2007)
• Internet scams dominate UK card fraud losses (14 March 2007)
• 'Mobile eCash' could change the face of commerce (8 February 2007)
• Hacked Chip and PIN terminal plays Tetris (5 January 2007)
• UK credit card fraud down to £209.3m (7 November 2006)
• Tesco self-scan tills 'open to card fraud' (5 October 2006)
• Chip and PIN fraud hits Lloyds TSB (11 May 2006)
• Shell suspends Chip and PIN after £1m fraud (8 May 2006)
• Fraud falling under Chip and PIN (14 March 2006)