A method for changing an account password stored at a physically remote location is provided. After initiating a password change sequence, a user submits both an old and a new password to its client machine. Thereafter, the client computes two message values to be transmitted to the server. The first message is computed by encrypting at least the new password using a one-way hash of the old password as an encryption key. The second message is computed by encrypting the one-way hash of the old password using a one-way hash of the new clear text password as the encryption key. The server receives both messages and computes a first decrypted value by decrypting the first message using the one-way hash of the old password, previously stored at the server, as the decryption key. The server computes a second decrypted value by decrypting the second message using a one-way hash of the first decrypted value as the decryption key. The server compares the decrypted one-way hashed value, transmitted in encrypted form in the second message, to the pre-stored hashed old password. If the two values are equal, then the server replaces the old password by the new password.