Now I have researched card fraudsters for years, and I can tell you they always tend to go with simplest methods of committing card fraud with poses the least risk of being caught, and as any security professional knows, bad guys always tend to go for the lowest hanging fruit.
So here's my main point, why would a card fraudster who is in possession of stolen card bother with the sophisticated technique as highlighted by the Cambridge boffins, when it is far easier and less risky to just damage the chip on card, forcing a magnetic swipe and signature payment, perhaps if needed requiring a bit social engineering against the cashier. Still it would be far easier and less risky to the card fraudster to use the stolen card with online transactions or even get away with small contactless payments which also don’t require any PIN knowledge.
Secondly I find card fraudsters tend to use stolen card details where the actual cardholder has no awareness of their card details being compromised. When the physical card is stolen, it tends to be reported by cardholder, so it quickly is cancelled preventing transactions from working on it, remember the Cambridge attack is all about the physical possession of the stolen plastic card, not stolen payment card details, which is where the bulk of card fraud occurs.
Just to prove how easy it is to get around Chip and Pin without having a PHD, I performed a demonstration yesterday at a “birthday card” retailer in a UK City. I used one of my own credit cards as opposed to a stolen credit card, the credit card I used just happened to have a damaged chip.
Here's the receipt, note "Date" and transaction type "Swiped" and "Signature Verifed"
I personally reckon at least £1 Billion is stolen on British payment cards every year, and to my knowledge on how UK card fraudsters operate, I would say the Cambridge Chip & Pin attack could be responsible for just few percent of that fraud spend presently. I have not come across any fraudsters nor have I heard of any fraudulent incidents using this technique, however you can never rule out that the bad guys aren’t taking advantage of a known vulnerability (a golden rule in security). But I am very confident the vast majority of payment card fraud in the UK is not being made against this particular vulnerability at present, and I don’t see that changing in the future, as there are still far easier methods to commit fraud against UK payment cards.
If the payment card industry was serious about preventing payment card fraud, they should be looking into the types of things I mentioned in this blog posting.