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  Microsoft Security Bulletin (MS01-019) : Passwords for Compressed Folders are Recoverable (Win98, Win Me)
Time: 10:31 EST/15:31 GMT | News Source: ActiveWin.com | Posted By: Robert Stein

Plus! 98, an optional package that extends Windows 98 and Windows 98 Second Edition, introduced a data compression feature called Compressed Folders that was also included in Windows Me. For interoperability with leading third-party compression tools, it provides a password protection option for folders that have been compressed. However, due to a flaw in the package’s implementation, the passwords used to protect the folders are recorded in a file on the user’s system. If an attacker gained access to an affected machine on which password-protected folders were stored, she could learn the passwords and access the files.

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