PayPal has fixed a critical flaw that allowed an attacker to delete any account at will and replace it with one of their own.
In April, security researcher Ionut Cernica discovered that US PayPal account holders could add an email address to someone else's account by visiting a PayPal webpage. This then allowed the account to be deleted, he showed in a demonstration video (beware, old-school techno soundtrack):
"After you added an existing email to your account if you go to the account profile and you delete the unconfirmed email, the original account will be deleted too," Cernica's report reads.
"After you removed the account, you can make another one with same username with your desired password, but you will have no money and is not confirmed."
In order to achieve verified PayPal status, the attacker would simply need to assign a bank account or credit card to the replacement username and go through the standard accreditation procedure. If the scam wasn't spotted quickly, funds could then be siphoned off as soon as they came in.
According to the report, PayPal acknowledged the flaw a week later and in May told Cernica that a fix had been issued – but the researcher reported back that the dodge was still possible. The final patch was issued this week, and Cernica has received his bounty for the bug.
The bug will net Cernica $3,000 at most, and would be worth many times that on the black market. The case highlights the effectiveness of once-controversial bug bounty programs, something even long-time holdout Microsoft has now acknowledged. ®