PayPal Scam Rises Again
By Kevin Poulsen, SecurityFocus May 22 2003 3:17PM
PayPal users are once again the targets of a hit-and-run e-mail scam aimed at conning them out of their personal and financial information.
On Thursday, netizens began receiving a convincing forgery of a PayPal e-mail, with the subject line "PayPal Verification" and the false return address
verification@paypal.com.
The text of the message claims that PayPal -- owned by online auctioneer eBay -- has launched an anti-fraud initiative that requires the recipient to verify their account information on a particular website, "as part of our continuing commitment to protect your account."
Clicking on the supplied link -- masked as a PayPal URL -- takes the user to paypal.un-fraud.com. The website, hosted by Verio, consists entirely of a professional-looking "Personal Account Identity Verification" page that asks the user for their name, address, birth date, credit card numbers, social-security number, mother's maiden name, checking account numbers and ATM codes.
"There's no form like that on PayPal that I could find, but it uses their graphics and everything," says Ralph Logan, a Houston-based computer security consultant, and PayPal user, who spied the scam mail Thursday and reported it to eBay. "Basically what this guy is doing is redirecting people through spam to his website."
The e-mail's header reveals the message passed through a mail server in Lithuania, and not eBay's offices in Northern California.
Domain registration records show that un-fraud.com was registered less than two weeks ago, to an Illinois woman named Crystal Panzer. She appears to be one of the cyber thief's previous victims -- her identity stolen to perpetrate the newest round of the scam.
"We just walked in tonight to a whole bunch of messages on our answering machine," says husband Mike Panzer. "Somebody got a hold of my wife's credit card information through her PayPal account, and has gone out and purchased some kind of stuff that I guess is asking people for credit card information or something like that. Now I got a whole bunch of people pissed off at me for something I didn't do."
Growing Sophistication
Forged account-verification spam has become a popular ruse for identity thieves, who've also targeted users of eBay, Earthlink, e-Gold, and other popular sites and online services. But most efforts are dogged by poor spelling and grammar, or just plain sloppiness; one fake PayPal message spotted in the wild last month misspelled the word "address" and included a disclaimer from the credit card company Providian, which has no link to PayPal or eBay.
But others, like the un-fraud.com scheme, are more polished, and therefore more dangerous. A scam mail sent last April falsely warned PayPal users that their accounts had been placed on "Limited Access" status, and could only be reinstated if they entered their credit card and bank account information into a form embedded in the e-mail.
"They're becoming more and more sophisticated in their attempts to induce victims into falling for the e-mail, or the site itself," says eBay spokesman Kevin Pursglove. "We get the sense that most users are becoming more sophisticated about it too, and are putting it in the trashcan right off the bat... But we do hear from users or law enforcement officials that let us know someone has fallen for the scam."
Even if only a fraction of the spam's recipients are PayPal users, and only a tiny number of them fall for the hoax, that's still enough of a response to make it worthwhile for the scammers, says Pursglove.
In recent months, eBay and PayPal have stepped up efforts to educate users about the scams, providing guidance on how to identify bogus sites, and urging users to be suspicious of e-mails asking for passwords.
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