Security Experts:

$45 Million Bank Fraud Scheme Compromised Card Payment Processors in India

The two card payment processors compromised by hackers as part of a massive international fraud scheme have been identified as ElectraCard Services and enStage, Inc. 

Both companies are located in India, and were hacked as part of a multi-stage fraud operation that stole a total of $45 million over the course of several months. According to reports, enStage processed card payments for the Bank of Muscat in Oman, which lost $40 million in February when gang members looted ATMs around the world using compromised card data.  In the case of ElectraCard Services [ECS], the compromise of their organization contributed to a heist that ultimately resulted in $5 million in losses.

"As the popularity of payment cards, online, and digital service channels in banking and finance has grown, so to have the risks of cyber-attacks," said Torsten George, vice president worldwide marketing, products, and support for Agiliance. "These industries are prime targets for advanced persistent threats (APTs), since, as the famous saying goes, 'that’s where the money is'."

ElectraCard Services was attacked in December of 2012, and handled transactions for prepaid MasterCard debit cards issued by the National Bank of Ras Al-Khaimah PSC in the United Arab Emirates. In the attack, the gang compromised prepaid card accounts and changed the account balances and withdrawal limits. Afterwards, groups of individuals known as "cashers" used cards encoded with fraudulent card information to withdraw money from ATMs, including nearly $400,000 at more than 140 different ATMs in the New York City area.

In a statement, ECS said that it has engaged external agencies such as Verizon to do forensic and other investigations, and has contacted the U.S. Secret Service. The investigations revealed that the PIN and magnetic stripe data used by the gang was stolen from elsewhere, the company said.  

"As part of the standard process under such circumstances in the 3rd party payments processing industry, ECS is in the process of re-certifying and re-listing itself for compliance with the PCI-DSS standards of the PCI Security Standards Council (whose certifications are recognized by international payment associations such as Visa and MasterCard)," the company said in a statement. "ECS has already taken several measures to further strengthen its processing environment and is confident of being re-certified and re-listed over the next couple of months."

The rising tide of insider and advanced persistent threats, mounting regulatory pressure and the impact of big security data on an organization’s operational efficiency can be overwhelming, said George.

"This holds especially true for organizations that cannot afford to spend millions on shoring up their defenses, hiring cyber security experts, or assigning a legion of resources to piece together data from different sources, connect the dots, and detect suspicious patterns that would indicate a cyber-attack or data breach," he said. "Thus, smaller payment processors are definitely facing a tougher challenge to stand up to APTs compared to their bigger brothers. However, Information Security Risk Management (ISRM) systems can help even smaller processors beat the hackers."

In addition to the seven people arrested by authorities in the U.S., two Dutch citizens were arrested by police in Germany in February when they were allegedly caught withdrawing 170,000 euros ($220,500) using Bank of Muscat credit cards.

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