What is the best "forgot my password" method? [duplicate]

Possible Duplicate:
Forgot Password: what is the best method of implementing a forgot password function?

I'm programming a community website.

I want to build a "forgot my password" feature.

Looking around at different sites, I've found they employ one of three options:

1. send the user an email with a link to a unique, hidden URL that allows him to change his password (Gmail and Amazon)

2. send the user an email with a new, randomly generated password (Wordpress)

3. send the user his current password (www.teach12.com)

Option #3 seems the most convenient to the user but since I save passwords as an MD5 hash, I don't see how option #3 would be available to me since MD5 is irreversible. This also seems to be insecure option since it means that the website must be saving the password in clear text somewhere, and at the least the clear-text password is being sent over insecure e-mail to the user. Or am I missing something here?

So if I can't do option #1, option #2 seems to be the simplest to program since I just have to change the user's password and send it to him. Although this is somewhat insecure since you have to have a live password being communicated via insecure e-mail. However, this could also be misused by trouble-makers to pester users by typing in random e-mails and constantly changing passwords of various users.

Option #1 seems to be the most secure but requires a little extra programming to deal with a hidden URL that expires etc., but it seems to be what the big sites use.

What experience have you had using/programming these various options? Are there any options I've missed?

4) Crediting their bank account with two random amounts and ask them to enter those in.
5) Snail mail them some new password and ask them to enter it in.
6) Have them text or call some number and enter some value to a phone number with the mobile phone they registered on file.
7) Get out of the password management problem altogether by outsourcing it to OpenID providers like Stack Overflow, Facebook, blog engines, and others are starting to do.

Outside of those, use option #1 or #2 with the added feature that both expire in an hour.

I'm shocked at the upvotes on answers describing #1 and #2 as equivalent. They aren't at all. Sending the user a short term link to change their password is the most convenient, most commonly used, and most secure approach that doesn't involve an out of band interaction (mail, text msg, etc.). A few reasons:

1. Setting a temporary password via a forgot password link allows users to effectively change a user's password and lock a user out of their account if they know the user's login. With a link, the user simply knows someone is messing around and their access isn't impacted.
2. The password reset link is only valid for a short period, so there's a very small window for an attacker to strike. And even if they did, the user would know because the reset link would no longer work if the attacker intercepted the link and used it to change the password. If the new assigned password isn't changed by the user immediately, the attacker who intercepted the password can quietly impersonate the user indefinitely. So the big difference is, while a hacker can intercept the reset password link email, if they use the link to change the user's password, the user will know something is wrong because the link won't work and they'll generate another password reset request.
3. Easier to use - the user simply clicks a link in their email rather than typing a new random password you've generated.

And security questions often make a site less secure, not more - they're another attack vector and often the weakest link. I highly recommend reading The Web Application Hacker's Handbook for an excellent discussion on this topic.

Note that Option #2 also requires you to keep track of the old password and expire the new random password if it isn't used within, say 24 hours.

Otherwise I could annoy you by repeatedly issuing you a new random password -- if you are not near your email you might not know why you cannot log in with your normal password.

Also, please avoid requiring an "identification question". The answers to these questions are typically much easier to guess/lookup than real passwords -- so everybody can identify themselves as me. See the Sarah Palin story for a recent example of how insecure this is.

Options 1 and 2 as insecure as each other.

There. I said it. If the user's email account has been breached, there's no reasonable secure way to do things unless you collect more private data like their address, mother's maiden name - all of which can be guessed.

The best (albeit most annoying) version I have seen is where you need to remember a secret question and a secret answer. It means the user has to remember which question they asked, which, of course, can always be forgotten too!

If they forget the question and you're a "real" company, there's always the option of sending the user a token through the post, with instructions on how to reset all their security... It's very unlikely that a hacker will have access to their real life mail.

A skew on that would be to collect a telephone number when the user created the account. If that existed and they couldn't remember any of their details, you could set up some sort of automated calling system that told them how to reset their details.

And one thing to mention about #2: Don't let the process overwrite the current account password. If that happened anybody could say they forgot any account's password, triggering lots of unwanted password changes.

There's no real difference between the security of option 1 or 2. Option 1 is effectively the same as preloading the new password in the form.

In fact, with the prevalence of phishing attacks, one could argue that encouraging use of option 1 with long URLs could make people less alert about clicking on long mysterious URLs.