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A security specialist issued a research note Thursday warning of a handful of flaws in Microsoft's Outlook 2002 e-mail software which he claims could let "bad guys" cause havoc on a user's computer.

Independent security consultant Richard Smith points to four "questionable security policies" in Outlook 2002 which he says Microsoft has yet to fix, even though he notified the company of the problems over the last twelve months, according to Smith's note.

Microsoft did not immediately return calls seeking comment.

Smith says the most critical problem is that Outlook will automatically download potentially dangerous files sent in certain HTML e-mail messages. The warning applied to e-mails with IFRAME HTML tags embedded in the message. If a user reads such an e-mail, Outlook will begin downloading executable files from a Web specified in the message.

"Outlook will put up a dialog box asking a user if they want to open the file, save it, or cancel the download," Smith writes. "There is no security warning that the executable file might be dangerous. Unfortunately, the default action of the dialog is 'Open'."

Smith recommends that IFRAME tags be used only in conjunction with HTML, image, and text files.

Hidden Code

Another HTML-related flaw allows JavaScript code to run in e-mails even though scripting is turned off in the default settings of Outlook. A malicious hacker could bury the JavaScript code in a seemingly harmless link, causing hidden dangerous code to execute when the user clicks on a link, he says.

"In Outlook, URLs are limited to about 2,000 characters which is probably enough space to contain a simple worm which could exploit one of the know Internet Explorer security holes," Smith writes.

In addition, Smith claims that cookies can be set and read in HTML e-mails despite Outlook's default settings to turn cookies off. Cookies are small programs that collect information about which sites users visit on the Internet. While cookies can make life easier by identifying users when they return to a site, they can also be used to track Internet usage, making them a contentious privacy issue.

Smith contends that Microsoft's Outlook and Internet Explorer development teams disagree on the potential threat posed by .URL files, causing disruptive messages to occasionally appear when working with the two applications.

"The Outlook group sees them as security threat, while the IE group does not," Smith writes.

He also notes that: "These problems likely affect earlier versions of Outlook as well as Outlook Express."

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