PayPal Data Breach Unveiled
PayPal has recently disclosed a significant data breach affecting its Working Capital loan application. A coding error led to the exposure of sensitive customer information over a six-month period, from July to December 2025. This incident has raised concerns about data security and customer privacy.
Details of the Security Lapse
The breach was identified on December 12, 2025, with PayPal notifying affected customers on February 10, 2026. The root of the issue lay in an internal software flaw that permitted unauthorized access to personal data. This flaw was not due to an external cyberattack but an inadvertent code alteration within PayPal’s systems.
The exposed information includes crucial personal identifiers such as full names, email addresses, phone numbers, business addresses, Social Security numbers (SSNs), and birth dates. These details are particularly sensitive, posing a heightened risk for identity theft and fraud.
Impact and Response
In response to the breach, PayPal has undertaken several measures. They reversed the problematic code change and reinforced security protocols to prevent further unauthorized access. Additionally, impacted customers who experienced unauthorized transactions have been reimbursed.
To mitigate risks, PayPal has mandated password resets for affected accounts and introduced enhanced security controls. These measures aim to safeguard customer data and prevent future breaches.
Customer Protection and Advice
As a precaution, PayPal is offering two years of free credit monitoring and identity restoration services through Equifax Complete™ Premier. This package includes substantial identity theft insurance, providing peace of mind to affected customers.
Customers are advised to monitor their accounts and credit reports vigilantly. They can also place fraud alerts or credit freezes with major credit bureaus to enhance their security. PayPal emphasizes that they will never solicit sensitive information via unsolicited communications.
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