Feeds

Hacker claims PayPal loophole generates FREE MONEY

Convicted hacker comes good with fraudster flowchart

Protecting against web application threats using SSL

A PayPal loophole can be exploited to earn free cash according to a convicted former NASA hacker turned white hat.

Fraudsters can double their money, says Razvan Cernaianu, by funnelling cash into a mule account before filing for a transaction refund.

To pull off the rort* a fraudster needs three PayPal accounts. One is a legitimate buyer, another is a disposable seller and the third is a mule. The latter accounts would be linked to virtual credit cards.

"You transfer the money to the second account with the pretext of buying a phone. From the second account you again transfer the money to the third account as a gift. After 24 hours, you use the chargeback function from the first account to get the money back with the excuse that the phone did not arrive on time," Cernaianu explained.

"As the second account is only a virtual one, it will not have real money from which Paypal can extract. Therefore you are left with $500 restored by PayPal, and $500 in your third account."

Cernaianu said he reported the loophole to PayPal's bug bounty team which said it was an issue with its Protection Policy.

"While the abuse described here is possible in our system, repeated abusive behavior by the same and/or linked account(s) is addressed," PayPal reportedly told Cernaianu.

The company could not immediately offer additional information about its ability to prevent one-off instances of the scam.

Cernaianu did not say whether he performed the rort himself but his claims that the scam could be repeated to generate thousands of dollars were questionable given PayPal's investment in fraud detection capabilities.

Virtual credit cards were payment systems designed to combat online fraud by utilising temporary card numbers.

Cernaianu, known as TinKode, was found guilty of hacking into the Pentagon, NASA and the British Royal Navy and ordered to pay $US120,000 in damages ®.

*Rort - "To cheat, rip-off, beat, defraud, hack or scam something," says the Urban Dictionary. So now non-Aussies know.

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Early result from Scots indyref vote? NAW, Jimmy - it's a SCAM
Anyone claiming to know before tomorrow is telling porkies
TOR users become FBI's No.1 hacking target after legal power grab
Be afeared, me hearties, these scoundrels be spying our signals
Home Depot: 56 million bank cards pwned by malware in our tills
That's about 50 per cent bigger than the Target tills mega-hack
Hackers pop Brazil newspaper to root home routers
Step One: try default passwords. Step Two: Repeat Step One until success
NORKS ban Wi-Fi and satellite internet at embassies
Crackdown on tardy diplomatic sysadmins providing accidental unfiltered internet access
UK.gov lobs another fistful of change at SME infosec nightmares
Senior Lib Dem in 'trying to be relevant' shocker. It's only taxpayers' money, after all
Critical Adobe Reader and Acrobat patches FINALLY make it out
Eight vulns healed, including XSS and DoS paths
Spies would need SUPER POWERS to tap undersea cables
Why mess with armoured 10kV cables when land-based, and legal, snoop tools are easier?
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.