BBC Watchdog (a consumer protection television program) is today airing a report on 'food fraud' against the UK-based Deliveroo service. Food is ordered via the Deliveroo iOS or Android apps, and delivered to the customer. It appears, however, that scores of customers have recently been charged for food they didn't order; food that was actually delivered to complete strangers.

Deliveroo is adamant that it has not suffered a breach, and that no card details or other personal information has been stolen. "We are aware of these cases raised by Watchdog - they involve stolen food, not credit card numbers," it said in a statement. "These issues occur when criminals use a password stolen from another service unrelated to our company in a major data breach." Deliveroo is reimbursing the customers.

If Deliveroo is correct in this statement, it raises several other issues. Firstly, yes and obviously, users need to start practicing better password hygiene. Secondly, Deliveroo needs to improve its security in terms of fraud detection and customer authentication. Thirdly, it is not immediately apparent how the fraudster benefits from this fraud.

The reaction from most security vendors is simple. Single factor password authentication is no longer adequate. Users should have unique strong passwords for every service they use, while vendors should implement and insist on multi-factor authentication. It seems clear that multi-factor authentication (MFA) hasn't been implemented because Deliveroo has sought a frictionless experience for its users. Furthering this frictionless approach, Deliveroo maintains the customers' card details to allow easily repeatable orders -- but does not require the 3-digit security number when taking new orders.

This fits in with the idea that the fraudster/s used credentials obtained from other hacks and released on the internet -- that is all they would need. Kaspersky Lab's David Emm comments, "Businesses must ensure they implement two-factor authentication, so that credentials stolen from another site would not be sufficient for an attacker to get access to their customers' accounts." 

F-Secure's Sean Sullivan agrees. "An app such as this probably really requires that the app vendor requests the account holder's phone number -- and then sends an SMS with a code in order to activate the app. If all it relies on is a password… then any old fraudster will be able to exploit the system for free food. If a second factor of some sort is used during setup, it limits the risk. But that's the thing… start-ups want to be 'frictionless' to setup. So, Deliveroo will just have to eat the costs, if it can."

But you can have frictionless MFA with modern smartphones using, for example, facial recognition.

It is difficult at this point to know whether Deliveroo has adequate fraud prevention systems simply because there is insufficient information yet. But it seems unlikely.

The BBC reports, "User Judith MacFadyen, from Reading, told Watchdog: 'I noticed that I had a 'thank you' email from Deliveroo for a burger joint in Chiswick. I thought that was really odd so I went on to my account and had a look and there had been four orders that afternoon to a couple of addresses in London.'" Four separate orders on one account to two addresses in one afternoon should really trip warning flags.

The third puzzle is how does the fraudster benefit from food delivered to different parts of the country? Three locations are mentioned by the BBC; London, Reading and Manchester. Manchester and London are 200 miles apart. It could still be simple food fraud. Sullivan explains, "All the fraudster needs to do is to have the food delivered to a public address such as a coworking space. Or even just the front of some building -- the app lets you track the delivery -- so the fraudster would know when to step forward to claim the order. The delivery person isn't going to be able to vet the person picking up the food is actually the legitimate account holder. They'll just hand over the food to the person who knows the order ID."

But multiple orders in one afternoon and such diverse delivery locations suggest it could equally be something different. ESET Senior Research Fellow David Harley commented, "I wouldn’t be surprised if it did turn out to be due to the action of a person or persons targeting the company by getting food delivered to what may be randomly-selected addresses. A disgruntled employee? A competitor using information provided by a mole? A hacker for hire, or just doing it because it amuses them and they can? I don’t know, but I'll be watching future developments with interest."

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Kevin Townsend is a Senior Contributor at SecurityWeek. He has been writing about high tech issues since before the birth of Microsoft. For the last 15 years he has specialized in information security; and has had many thousands of articles published in dozens of different magazines – from The Times and the Financial Times to current and long-gone computer magazines.

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