The Electrum Servers (anyone can run one) can check your balance and send bitcoin on your behalf. Thanks to the magic of cryptography, this is all perfectly safe. If you send bitcoin through them, they couldn't redirect it to themselves. The worst they could do is refuse to send it.
Turns out Electrum Servers are allowed to return custom error messages to the client, though. So this guy set up a bunch of these servers and had them always return a message saying "Please update your electrum here: http://github.com/my-hostile-electrum/steal-yo-coins.git". What's worse, because Electrum is using the QT QMessageBox, these errors are displayed with full HTML rendering, making them look even more convincing.
So, crap. Bitcoin is, as they say, a bug bounty on the entire world.