The 'hack' isn't the same as what most people would recognise from wow, this ISN'T an account hack, it's a character hack, and tbh it's more like duping than hacking. Only in this case it's not just a single item, but the entire character thats being copied :s
The hacker/duper what ever you want to call them, basically makes a 'copy' of a game (including the character) that they have previously joined with in a public session (they only have to be there a couple of mins. aka join, stand in town, then leave)
They then log the copy they have made, (hence the error some ppl get that someone is useing there account and the get kicked off) give all the items/gold etc to a 'friend' then log out.
The servers don't know it's a copy so the real character gets re-saved with the new info for the duped character with no items and no gold.
Also as the hacker/duper doesn't need to log out there's no password/authenticater needed, so theres no sign of the account being hacked, as it's all done server side.
They can only copy/hack characters that they have joined with for a public game. Thats why it's only one character and the stash/gold that is being comprimised, and not every character on the account.
My advice, don't join/create public games with compleate random strangers. Stick to 'private' games that only your friends can join.