Basic cyber security says that passwords should be encrypted and hashed, so that even the company storing them doesn’t know what the password is. (When you log in, the site performs the same encrypting and hashing steps and compares the results) Otherwise if they are hacked, the attackers get access to all the passwords.
I’ve noticed a few companies ask for specific characters of my password to prove who I am (eg enter the 2nd and 9th character)
Is there any secure way that this could be happening? Or are the companies storing my password in plain text?
There’s a security exchange thread on it here
It looks like there are certain kinds of algorithms you can run that give you this property.
Also, I’ve seen this when you have an alternate form of authentication like a password you type in full, or an existing session token. In those scenarios, you could probably use some sort of symmetric key encryption to encrypt the secondary password with the primary password / session token in such a way that you aren’t storing the key and can’t decrypt it, but that you can check specific digits on command.