This very heavily implies that the database column which stores "passwords" is typed as "char(12)" and that the site is storing unhashed plaintext passwords in that column.
Why: Because if they were (at least) hashing the password, then the output of the hash would be a fixed size token unrelated to the length of the input plaintext password, and no such arbitrary short limit would be necessary on the plaintext password itself.
Why: Because if they were (at least) hashing the password, then the output of the hash would be a fixed size token unrelated to the length of the input plaintext password, and no such arbitrary short limit would be necessary on the plaintext password itself.