Microsoft has fixed a flaw in Hotmail's password reset system that allowed hackers to take control of webmail accounts.
The vulnerability existed in Hotmail's password reset feature. Hackers were able to use a Firefox add-on called Tamper Data to intercept the outgoing HTTP request following a password reset request and modify the data, locking out the account holder and gaining access to their inbox.
Computer security researchers discovered the vulnerability in early April and told Microsoft about it soon afterwards. However, details of the bug leaked out in online forums, and earlier this week hackers were reportedly offering to break into any Hotmail account for as little as $20.
Microsoft said it has now issued an update to fix the bug.
"On Friday we addressed a reset function incident to help protect Hotmail customers, no action needed," the company posted on its Security Response Twitter account.
It is not known is just how many Hotmail accounts may have been compromised by the bug. According to some reports, Moroccan hackers were actively taking advantage of the vulnerability and planned to reset the passwords of a list of 13 million Hotmail users in their possession.
Sophos senior technology consultant Graham Cluley said that if Hotmail users are inexplicably unable to log into their account, then it is possible their email account has fallen victim to this attack.
"Hackers aren't just interested in breaking into email accounts out of curiosity or because they want to read your spam," said Cluley. "They're also interested in stealing your identity and perhaps using an email account hack as a method to crowbar their way into other online accounts under your control."
Last year, the webmail accounts of Google, Yahoo and Hotmail users were hit by a series of politically-motivated spearphishing attacks. Hackers were able to gain access to webmail accounts and send specially crafted phishing email messages to several thousand victims.