Please enable JavaScript to view the comments powered by Disqus.

We use cookies on our website to give you the best online experience. Please know that if you continue to browse on our site, you agree to this use. You can always block or disable cookies using your browser settings. To find out more, please review our privacy policy.

About


Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.

Comment Standards:
Comments are moderated and will not appear until the moderator has approved them.

Please submit appropriate comments. Inappropriate comments include content that is abusive, harassing, or threatening; obscene, vulgar, or profane; an attack of a personal nature; or overtly political.

In addition, no off-topic remarks or spam is permitted.

April 18, 2022

Smishing: Phishing with a Different Bait

The Retail Payments Risk Forum team is always on the lookout for changes in attack patterns by the criminal element regarding payments. Our sources of research include industry news, networking with payments stakeholders, third-party reports, and our internal security warnings. One other source we have is our own personal experience, though we have to remind ourselves of our colleague Claire Greene's warning that each of us is a sample of one. What we experience may not be, and probably isn't, what the average person might encounter.

I was recently reminded of this warning with regard to my own experience with smishing attacks. Unlike phishing, which uses email, smishing uses SMS text messages to entice you to click on a malicious link that either loads malware on your phone or, more likely, directs you to a fake website to capture your login information. (Simply opening the text message poses little risk.) Over the last several weeks, I have been getting one to two text messages a day on my phone asking me to click on a link to respond—usually to a customer satisfaction survey allegedly from a major retailer, with the offer of a gift card as a reward for responding. One message informed me that a product I had ordered (and already received) from an online retailer couldn't be shipped until I clicked on the link to pay an international tax of $2.83. I am confident that all these messages were "smishing" attempts.

Although a part of me was tempted to assume my experience was indicative of a very recent trend, I decided to research whether I was indeed average in experiencing an increased number of these attacks. It appears Claire was right—although my research showed that smishing attacks have substantially increased, seems I am fortunate to have only recently become a target. A cybersecurity firm that claims to handle 80 percent of mobile messages in North America has reportedOff-site link that the number of smishing attacks during the third quarter of 2020 had increased 328 percent over the previous quarter. The FBI's Internet Crime Complaint Center (IC3) doesn't separate smishing from phishing, vishing (phone calls), or pharming (redirection to a fake website) incidents, but the IC3's Internet Crime Report 2021 Adobe PDF file formatOff-site link shows that these complaints increased 34 percent from 2020 to 2021.

The warning signs for a smishing message are quite similar to those of a phishing attack and may include the following:

  • A sense of urgency, pushing you to respond right away. As we are now in income tax season, these messages may include references to past due taxes or a suspended refund.
  • An offer of a reward such as a gift card, rebate, or a coupon for a future purchase from the retailer
  • Poor English grammar or improperly formatted phone numbers
  • An unknown sender. It is best to report or delete messages you weren't expecting from people you don't know.

Be aware that what appears to be the sender's phone number is often spoofed. It may be a familiar number or at least may have a local area code. This is intended to increase your trust and thus the likelihood that you will respond.

Likewise, the protective measures you should take to protect yourself against falling victim to a smishing attempt are similar to any other safeguards you take:

  • Keep your mobile device software and browsers updated with the latest security upgrades.
  • If you are in doubt about the legitimacy of the message, do not use the link or phone number provided in the text to contact the sender. If the message appears to be from someone you know or a business you are familiar with, find their number in your contacts or online and contact them directly.

I realize that the criminals launching these types of attacks are generally using automated systems to transmit hundreds of thousands, if not millions, of the messages in hopes of getting even just a small percentage of recipients to click on the link. So even if you are like me and not average, there is a good chance you have been or are likely to be the target of a smishing attack. I hope you will use information to not become a victim, and distribute it to help keep others from falling victim.

February 28, 2022

5G and 3DS: A Perfect Pair?

Not that long ago, when you heard the term "5G," you would probably mentally translate it to "five grand" or "five thousand dollars." Today, 5G refers to the fifth generation of mobile network wireless communications technology. Network operators promise that 5G technology will deliver much faster data transmission speeds, lower latency, and greater signal reliability, which consumers may not truly realize on the mobile front for several years as operators upgrade their cell tower networks. But are there benefits on the payments side we're likely to see?

My colleague Doug King first raised this question in a Take On Payments post in September 2018, when the industry thought 5G was on the cusp of becoming a reality. While the pandemic and regulatory concerns about security and safety have slowed implementation, it is now underway.

We have also previously written about the evolution of 3DS (short for "three-domain secure"), which was developed in 2000 to improve the authentication of a legitimate consumer's payment transaction with a merchant. The first version of 3DS was unsuccessful in the United States for a variety of reasons centered on poor consumer experiences that resulted in high shopping cart abandonment rates. However, as the share of digital transactions of overall retail sales continued to grow, the payments industry knew that new tools were needed to combat increasing fraud.

Recognizing that the 3DS process needed an overhaul to meet consumer, issuer, and merchant requirements, EMVCo released EMV 3DS 2.0 specifications video fileOff-site link in 2016. While this version results in a more complex transaction and was slow to gain traction in the marketplace until recently, its strength relies on the merchant's ability to send additional data to the payment card issuer. This additional information includes transaction, method of payment, and payment device information and is intended to help the issuer to run fraud mitigation tools more effectively, better detecting the fraudulent transactions and not denying the legitimate ones. The issuer, if still concerned about a transaction's legitimacy, can perform stepped-up authorization with the customer, including out-of-band confirmations. An out-of-band confirmation is authentication occurring on a different channel than the one initiating the transaction, such as when a banking app sends an email or text with a password the customer must enter in the app to carry out the transaction. A recent reportOff-site link indicates that 10 percent or less of transactions require this stepped-up authorization, and merchant adoption increased 50 percent during Q4 2021 compared to Q4 2020.

So how will 5G and 3DS work together? Transmitting and handling payment authorization messages with the additional data the EMV 3DS 2.0 specifications require can increase transaction time. Slow response time (latency) is a major factor in a consumer abandoning a shopping cart and the merchant losing a sale. The mobile network benefits of 5G will be realized over time, but many operators have already begun to support local 5G networks for small to mid-sized businesses requiring fast data speeds.

Such networks will allow these businesses to handle the additional message data, as well as additional payment devices, while providing better service levels. While the GSMAOff-site link (Global Systems for Mobile Communications Association) estimates it will take until 2025 before half of the mobile communications in North America will be on a 5G network, the uptake in the United States is expected to be faster.

I believe that the further adoption of EMV 3DS will be enhanced with the continued implementation of 5G technology in the United States. We will continue to monitor both technologies as well as when their expected benefits start to come about.

February 7, 2022

Data Privacy Legislation: Stuck on Pause?

How did you celebrate National Data Privacy Day on January 26? Oh, that celebration didn't make it onto your social calendar? Almost three years ago, I asked on this blog whether a federal privacy law would be passed in 2019. The short answer is no. Nor did a data privacy law pass in 2020 or 2021, despite numerous attempts by sponsors of both political parties. Some of the proposed bills provided comprehensive consumer protections for a business's use of personally identifiable information (PII). Others targeted specific elements of data privacy, such as requirements for businesses to protect data they collect or to notify customers in the event of a data breach.

It was thought that the European Union's passage of the General Data Privacy Regulation, or GDPR, which took effect in 2018, would spur federal activity in the United States. That same year, the state of California passed its comprehensive privacy law, the California Consumer Privacy Act. Some expected that Congress would head off state initiatives by passing federal laws to provide a consistent set of rights and responsibilities for all stakeholders. In the 117th US Congress, 30 data privacy/protection bills have been introduced, 12 in the House of Representatives and 18 in the Senate. Primary points of political disagreement have centered around preemption of state law and a private citizen's right to bring action against the offender rather than the enforcing governmental agency. No bill including either of these provisions has received bipartisan support. Social media platforms and their use of personal data have come under congressional scrutiny on several occasions over the last year with no formal action resulting from those hearings.

With little movement on the federal front, two states—Virginia and Colorado—followed California's lead in passing a comprehensive data privacy/protection law in 2021. Mississippi and Vermont recently introduced comprehensive data privacy legislation. Many other states have introduced some form of data privacy legislation addressing specific types of data such as healthcare or specific classes of people such as minors. The International Association of Privacy ProtectionOff-site link provides an excellent source for tracking federal and state privacy legislation and news about data privacy issues.

We will continue to monitor developments on this important issue. In the meantime, place a candle in your choice of dessert, change your password, and have a belated celebration of National Data Privacy Day.

November 29, 2021

Mindfulness and Phishing Resistance

How many emails do you receive in a day? 50? 150? 1,500?

Do you sometimes find yourself processing all those messages automatically, rapidly deleting as many as possible and trying to respond ASAP to items that are appear easy to get out of your box?

Maybe think about slowing down.

If you're reading this blog, you know that phishing is the main avenue for ransomware and account takeover attacks. You're familiar with most of the rules that can keep you safe from phishing: don't click through on emails from unknown senders, look at return addresses, watch out for a sense of urgency, et cetera.

You're adept at following those rules. Maybe you have aced your organization's phishing simulations. Not only the easy ones, like "Congrats. You are the employee of the month. Click here," but also the tricky messages with a direct relationship to your job content.

So now it's time to talk about the role of overconfidenceOff-site link—yours and mine—in our ability to identify phishing emails. That overconfidence could lead to a lack of attention.

I got to thinking about overconfidence after reading some reports of research projects that use phishing simulations to try to understand whether personality traits or demographics are associated with phishing susceptibility. I repeatedly saw words and phrases like "impulsive," "deficient self-regulation," "attention control," and "not paying attention."

Which led me to this experimentOff-site link finding that training in mindfulness techniques reduced the likelihood that university students would fall for a mock phish. Students already trained to know the anti-phishing rules were divided in two groups. Half received additional training on the rules. Half received mindfulness training.

The mindfulness training took a step back from the specific phishing rules. "Mindfulness training cautioned individuals against quickly responding to e-mail requests and encouraged them to stop, consider what e-mails ask them to do, and then take appropriate action." It was about following a process, not following a rule. The authors point out that environmental awareness and an understanding of potential consequences in that environment are key aspects of mindfulness.

Is there a role for mindfulness in your organization's anti-phishing program? In May, my colleague Scarlett Heinbuch wrote about the impetus to hurry when encountering a payment problem at checkout. For phishers, a similar impetus to hurry creates opportunity. Before you click, pause—take a breath—exhale—take another breath. Only then should you decide whether or not it's safe to click.