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Analysts apply Occam's razor to Tesco Bank breach

Unexpected items in the banking area

Analysis Security analysts have narrowed down the range of possible explanations for the Tesco Bank breach.

Earlier this month Tesco Bank admitted that an estimated £2.5m had been looted from 9,000 accounts. Initially it was feared that money had been taken from 20,000 accounts, but this figure was revised a few days after the breach was disclosed.

Tesco Bank temporarily froze online account operations and contactless payments for its current account holders in the immediate aftermath of the breach, one of the worst to affect a British retail bank. The bank reimbursed funds to defrauded customers.

The newly established UK National Cyber Security Centre (NCSC) issued a statement on 7 November confirming that an investigation into the Tesco Bank breach was underway. It said it was “unaware” of any threat to the wider UK banking sector. The ongoing investigation is led by the National Crime Agency (NCA), with NCSC providing support and technical assistance.

Digital Shadows, a security intelligence firm, claims it has identified “multiple instances” of Tesco Bank customers who say that fraudulent online transactions had been made from their accounts. Some of these reported small fraudulent transactions of around £20 before larger transactions of £500 or more were attempted. Another report talked about cash which had been fraudulently withdrawn from a customer’s account from an ATM in Rio de Janeiro, Brazil.

Tesco Bank login pages were included as a target in the config files of three major banking trojans: Vawtrak, Dridex and Retefe. In addition, Digital Shadows has identified a user on the forum linked to the cybercrime bazaar AlphaBay, who claimed in September 2016 that he was able to cash out Tesco Bank accounts with the assistance of an insider at the bank. The claim is unverified but nonetheless deserves to be taken seriously in the light of subsequent events.

Several competing theories about what might have happened have sprung up in the wake of the incident. Security pundits have variously blamed credential stuffing, an inside job, and exploitation of a third-party supplier retail partner for the breach.

Digital Shadows has applied the technique of the Analysis of Competing Hypothesis (ACH) on the available data in an attempt to narrow down the possibilities between four competition theories.

This work suggests that a banking trojan or a cash-out using aggregated card information sits badly with available evidence. Two scenarios - payment system compromise) and cash-out of cloned cards - are more plausible theories, according to this analysis.

NCSC’s statement that the Tesco Bank incident does not represent a threat to the wider UK banking sector, the short timeframe of the attack, and the focus of the breach on current accounts rather than credit accounts were key reference points that Digital Shadows applied to the competing theories it evaluated.

The company is careful to say it is not possible to definitively rule out any of the four hypotheses examined, but thinks that cash-out of cloned cards is the most likely because it offered a simpler attack method.

“Cash-out of cloned cards would likely have been a simpler to execute than payment system compromise and, in operational terms, would have involved fewer moving parts… [and] may be the more plausible scenario,” Digital Shadows says.

The security intelligence firm concludes that the heist was run by an organised criminal group, which is likely to present an ongoing threat.

“It is a realistic possibility that the actors responsible for these thefts will attempt to further monetise any Tesco Bank account information in their possession by attempting to sell it within the criminal ecosystem,” Digital Shadows warns.

“In the immediate future, it’s likely Tesco Bank customers will be targeted with phishing emails imitating law enforcement or Tesco Bank customer support. Tesco Bank customers are advised to exercise caution when receiving calls or opening emails or SMS messages purporting to relate to this incident and to report any suspected phishing attempts to Tesco Bank via,” it adds. ®

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