Hotmail Password Reset Bug Exploited in Wild

UPDATE: Microsoft has issued a permanent fix for a previously undisclosed bug in its MSN Hotmail Web email service that could have allowed remote attackers to reset account passwords.

The flaw in the password reset functionality allowed a remote attacker to reset the Hotmail/MSN password with their own values, according to a notice published by Vulnerability Laboratory senior researcher Benjamin Kunz Mejri. It affected Microsoft’s official MSN Hotmail (Live) service. Remote attackers could use the security hole to bypass the password recovery service to setup a new password, according to the notice.

Hotmail is the world’s largest web-based email service provider, touting some 364 million users. The flaw would also allow an attacker to bypass MSN Hotmail's token-based login protection. According to the Vulnerability Laboratory report, the token protection only checks if input values are empty before blocking or closing the web session. Mejri managed to bypass that feature by entering a string of characters, in this case, ‘+++)-.’

“On Friday, we addressed an incident with password reset functionality; there is no action for customers, as they are protected,” a Microsoft spokesperson told Threatpost via email.

According to a report published on WhiteC0de, the exploit was initially discovered by a Saudi Arabian hacker working for Dev-point.com and was, leaked to hacker forums, where it spread quickly. Despite the quick action to fix the flaw, Whitec0de claims it has been widely used to compromise Hotmail accounts. In turn, unauthorized access to those email accounts was leveraged to gain access to social media, financial, and other accounts linked to those addresses.