A row has broken out between PayPal and bug hunters who claim to have found a flaw on its website.

Vulnerability Laboratory published an advisory about a vulnerability that it said creates a means to bypass the security approval procedure and two-factor authentication applied by the payment service earlier this month, as previously reported.

PayPal initially told El Reg that it was looking into the problem in a holding statement that acknowledged a separately reported XSS flaw, which was discovered by BitDefender and resolved in July. The payment provider has since told El Reg that it was unable to replicate the problem reported to it by Vulnerability Laboratory, as a statement provided by the firm explains:

We received Vulnerability Lab’s bug submission and attempted to reproduce the issue with the details provided. With the information given to us, we were unable to reproduce the claimed issue. We are working with Vulnerability Labs, and other security researchers, to keep our customers secure. We have no evidence to suggest that any PayPal accounts were impacted in any way. PayPal takes the security of our customers’ data, money and account information extremely seriously.

Benjamin Kunz Mejri, the founder of Vulnerability Laboratory, maintains that the issue it has uncovered is genuine.

“Our video shows clean and clear what is the impact of the bug and PayPal should have the knowledge to interpret what has happened,” he told El Reg.

The practical upshot of the security shortcoming is that hackers who obtain second-hand phones with PayPal installed might be able to get into accounts even if 2FA and security approval is activated, according to Vulnerability Lab.

Vulnerability Laboratory’s advisory includes screenshots and links to a video (below) designed to illustrate the security weakness. ®

PayPal Inc 2015 - Stored Cookies Remote (SecurityApproval & 2FA) Auth Bypass Vulnerability (API)

Bugnote

Vulnerability Lab was rewarded under PayPal's bug bounty scheme for finding an XSS on the payment processing firm's systems.