Firefox flaw allows PayPal hack, says researcher

A potential flaw in the way Firefox web browser handles log-ons could be used by identity thieves to dupe users into disclosing passwords, a leading security researcher has warned.

According to Aviv Raff, an Israeli researcher, the flaw in Firefox 2.0.0.11 - Mozilla's latest version - could redirect the username and password entered by the user to the hacker's server instead of the real one.

An attacker could also create a web page with a link to a trusted website (for example, a bank, a PayPal account, webmail, etc.). When the victim clicks on the link, the trusted web page will be opened in a new window, and a script will be executed to redirect the new opened window to the attacker's web server, which will then return the specially crafted basic authentication response.

A video which demonstrates the first attack vector can be found on YouTube. A better quality video can be download from here.