RFriese, Paypal has never iirc been hacked.  Individual accounts have been hacked into using the same methods that hack into any credit account, i.e spoof emails, phishing, etc.  But the Paypal database of customer information has never been hacked. The hacker group Anonymous even tried but all they managed to do was a DDOs attack that shut their servers down.  The databases with customer information were never compromised.

The founder of Paypal is the guy who invented the captcha image concept btw, they stay on top of security pretty tightly.

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