In today's world password compromise by some adversaries is common for different purpose. In ICC 2008 Lei et al. proposed a new user authentication system based on the virtual password system. In virtual password system they have used linear randomized function to be secure against identity theft attacks, phishing attacks, keylogging attack and shoulder surfing system. In ICC 2010 Li's given a security attack on the Lei's work. This paper gives modification on Lei's work to prevent the Li's attack with reducing the server overhead. This paper also discussed the problems with current password recovery system and gives the better approach.