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Online payment service PayPal hit by scam

By Linda Rosencrance
September 27, 2002 12:00 PM ET

Computerworld - During the past two weeks, online payment service PayPal Inc. has been targeted by scam artists trying to get the personal information of its users, including credit card data, user names and passwords.
On Sept. 16, an unsophisticated scam e-mail, slugged "PayPal Verification," was sent requesting users to log into their PayPal accounts "asap" to confirm they were still active users of the service.
The e-mail said:
"We are now requesting the password to the e-mail address you signed up to PayPal with. This is so our systems can confirm the confirmation e-mails off PayPal stay in your account because there has been a rise in the amount of fraudsters getting access to users e-mail addresses and deleting the Paypal confirmations. This is to protect you and ourselves. PayPal will use this information for fraud protection only."
The e-mail went on to say PayPal would use the information for fraud protection only and was part of the Mountain View, Calif.-based company's new annual process to screen out inactive accounts.
Recipients were then given a link that seemed to go to PayPal's secure site, but was actually a fake.
Then on Sept. 25, another, more sophisticated e-mail, slugged "URGENT: PayPal System Problems" arrived in some users' in-boxes.
That message, which arrived as an HTML e-mail set up to resemble PayPal's Web site, said:
"Today we had some trouble with one of our computer systems. While the trouble appears to be minor, we are not taking any chances. We decided to take the troubled system offline and replace it with a new system. Unfortunately this caused us to lose some member data. Please follow the link below and log into your account to make sure your information is not affected. Account balances have not been affected."
The hackers even offered unsuspecting users their next two transfers at no charge.
The URL listed in the e-mail took users to an official-looking site that asked for their personal data, including user name, password and credit card information.
PayPal spokeswoman Julie Anderson said the company hasn't had a problem with its site and said spoof sites are very commonplace. She said the scam artists probably got hold of a database and sent messages to thousands of people hoping to hit some PayPal account holders.
"[These scams] happen often, and they happen often to successful Web sites like eBay, PayPal and other financial services sites," Anderson said. "Fortunately, we know from experience that PayPal users are for the most part savvy enough not to fall



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