The PayPal system glitch, exploited in a fraudulent scheme between late 2019 and 2020 in Singapore, operated through an automated payment and delivery loop hole involving tech vendors like Lenovo and Microsoft.
The mechanics of the exploit involved the following specific steps:
Account Setup: Participants linked their bank accounts to their PayPal accounts but purposely left a very low balance, typically around $100.
Funding and Remote Placement: The scheme's mastermind, Calvin Fong Jun Jie, would transfer the required purchase funds into the participant's account. He then used software to remotely control the participant's laptop to place orders for high-end tech devices.
The Exploited Glitch: When an order was completed, the payment was initially deducted from the bank account to pay the vendor. However, due to a technical glitch in PayPal’s system, the exact purchase amount was automatically credited or refunded back into the participant’s PayPal account shortly after the laptops were physically delivered.
The Outcome: The tech companies suffered a complete loss, as they delivered the physical laptops but ultimately received no financial payment. The perpetrators kept the free hardware and paid out a 40% "commission" to the participants involved in the operation.
The loophole was eventually brought to light after a participant, Jonathan Wee Jianwei, voluntarily confessed his involvement to the police out of guilt, as reported by Channel NewsAsia.