Credit card fraud is on the rise. As noted by an October 2016 issue of The Nilson Report, global losses topped $21 billion in 2015 and show no signs of slowing, even with the adoption of supposedly secure Europay, MasterCard and Visa (EMV) chip-and-PIN cards.

Part of the problem comes from increased fraud activity across e-commerce channels, which often allow card-not-present (CNP) purchases that circumvent chip-and-PIN technology. However, authorities recently uncovered a low-tech scam to compromise credit card chip security that primarily targets large enterprises.

Fraudsters Intercept Chip-and-PIN Cards

According to Krebs on Security, the U.S. Secret Service recently reported that enterprising cybercriminals are intercepting corporate chip-and-PIN cards sent directly by issuing financial institutions. These cards often access business accounts for travel or work-related purchases, meaning there’s no shortage of funds available. Attackers, recognizing the futility of beating credit card chip security, instead opt to bypass it altogether.

First, they intercept the bulk cards and use a heat gun to pry off new chips. Old chips are then attached to the cards before they’re sent off to their destination. After companies activate their new cards, they discover that the cards don’t work because the chips aren’t valid. The newly chipped criminal cards, however, work just fine, giving attackers full access to corporate bank accounts.

Instead of trying to beat chip-and-PIN security at its own game, attackers leverage secure chips themselves as an effective means to compromise. According to PC Magazine, the best course of action for concerned companies may be to pay banks for tracked, secure shipping methods to ensure that cards aren’t compromised en route.

Emerging Trends in Credit Card Chip Security

While chip-and-PIN cards have dramatically reduced the incidence of in-store fraud, according to Visa, new tactics such as mail interception show that criminals aren’t giving up — they’re just developing new methods. As noted by Retail TouchPoints, this means an uptick in both new attack vectors and old-school methods to circumvent defenses.

On the sophisticated side of the equation, cybercriminals are now choosing collaboration over lone action, allowing them to infiltrate systems and hide out for months before making their move, Forbes reported. By targeting vulnerable devices and internet-facing services, actors can sidestep the need for chip-and-PIN cards and go straight to the source of payment data. There’s also a significant uptick in mail order and telephone order (MOTO) fraud in which attackers phone in orders to call centers that don’t have protections against card-not-present fraud, according to Retail TouchPoints .

Credit card chip security has pushed fraud out of stores and into e-commerce. As retail websites improve protection, attackers are leveraging physical interception and digital subterfuge in an effort to both bypass chip-and-PIN defenses and leverage this technology for their own gain.

More from

Emotional Blowback: Dealing With Post-Incident Stress

Cyberattacks are on the rise as adversaries find new ways of creating chaos and increasing profits. Attacks evolve constantly and often involve real-world consequences. The growing criminal Software-as-a-Service enterprise puts ready-made tools in the hands of threat actors who can use them against the software supply chain and other critical systems. And then there's the threat of nation-state attacks, with major incidents reported every month and no sign of them slowing. Amidst these growing concerns, cybersecurity professionals continue to report…

RansomExx Upgrades to Rust

IBM Security X-Force Threat Researchers have discovered a new variant of the RansomExx ransomware that has been rewritten in the Rust programming language, joining a growing trend of ransomware developers switching to the language. Malware written in Rust often benefits from lower AV detection rates (compared to those written in more common languages) and this may have been the primary reason to use the language. For example, the sample analyzed in this report was not detected as malicious in the…

Why Operational Technology Security Cannot Be Avoided

Operational technology (OT) includes any hardware and software that directly monitors and controls industrial equipment and all its assets, processes and events to detect or initiate a change. Yet despite occupying a critical role in a large number of essential industries, OT security is also uniquely vulnerable to attack. From power grids to nuclear plants, attacks on OT systems have caused devastating work interruptions and physical damage in industries across the globe. In fact, cyberattacks with OT targets have substantially…

Resilient Companies Have a Disaster Recovery Plan

Historically, disaster recovery (DR) planning focused on protection against unlikely events such as fires, floods and natural disasters. Some companies mistakenly view DR as an insurance policy for which the likelihood of a claim is low. With the current financial and economic pressures, cutting or underfunding DR planning is a tempting prospect for many organizations. That impulse could be costly. Unfortunately, many companies have adopted newer technology delivery models without DR in mind, such as Cloud Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS)…