writes "According to DUO, PayPal's mobile app doesn't yet support Security Key and displays an error message to users with the feature enabled when they try to log in to their PayPal account from a mobile device, terminating their session automatically. However, researchers at DUO noticed that the PayPal iOS application would briefly display a user's account information and transaction history prior to displaying that error message and logging them out. ... The DUO researchers investigated: intercepting and analyzing the Web transaction between the PayPal mobile application and PayPal's back end servers and scrutinizing how sessions for two-factor-enabled accounts versus non-two-factor-enabled accounts were handled. They discovered that the API uses the OAuth technology for user authentication and authorization, but that PayPal only enforces the two-factor requirement on the client — not on the server."
The attack worked simply by intercepting a server response and toggling a flag
) from true to false. After being alerted, PayPal added a workaround to limit the scope of the hole.
Update: 06/26 00:42 GMT
: (Get the story straight from the source: Here's the original report from DUO