Digital Journal — An Israeli computer security company says they have found a massive flaw in the system banks use to protect debit card PIN numbers while they are sent across bank networks. The flaw is said to be so serious it could undermine the entire debit card system
Full Story: MSNBC.com
MSNBC obtained a memo written by the U.S. Secret Service shows that members of organized crime circles have “systematically attempting to subvert the ATM system and unscramble encrypted PIN traffic.”
The banking industry is overwhelmed, as many critics say financial industry experts are downplaying the seriousness of this flaw.
But Odelia Moshe Ostrovsky, the report’s principal author, says a hacker could get access to thousands of PIN codes and compromise hundreds of banks. They could then print fake debit cards and withdraw vast amounts of money from anywhere around the world.
According to MSNBC, ATMs are a huge part of the global economy, with 8 billion transactions happening every year in the U.S. alone. The volume of retail store transactions is even higher.
For more info, check out MSNBC’s long report
Here is an diagram of how the ATM encrypting system works:
