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Yahoo discloses its second data breach in 4 months

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Yahoo is having the worst year ever. The company has written to its e-mail customer that their accounts might be compromised, in a different hack from the one that it reported in September. This breach, according to the company, likely took place in August 2013, predating the previous disclosed breach that apparently happened in 2014.

The currently breach has compromised the data of over 1 billion user accounts, twice the number of the 2014 breach which stood at 500 million, according to various reports. According to Yahoo, law enforcement provided it with hacked data files that were claimed to be Yahoo user data in November, which it has now confirmed. It mentions that hackers created forged cookies, using Yahoo’s proprietary code, that would allow them access to accounts without a password.

Compromised data includes names, email addresses, telephone numbers, dates of birth, hashed passwords, and in some cases encrypted and unencrypted(!!) security questions and answers. According to the company, the data did not include plain text passwords, payment card data or bank account information. It’s not clear if email themselves were compromised, as this could lead to hackers having access to financial information not necessarily saved with Yahoo.

Note that the scale of this attack is the largest yet, breaking the company’s own previous record of compromising 500 million user accounts. However, the breach is not quite revelatory as say the Office of Personnel Management (US) hack, which compromised the data of 32 million current and former federal employees, including potential military enlistees.

Verizon deal in trouble?

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Interestingly, the revelation by Yahoo comes around the time it’s still working out its $4.8 billion acquisition by Verizon. During the previously disclosed data breach, Verizon had said that it had a ‘reasonable basis’ to believe the incident represented a material impact that could allow it to withdraw from the $4.8 billion deal. The company was apparently looking to get a $1 billion discount on the Yahoo deal, although this was not confirmed by either party. While Verizon is yet to comment on the latest disclosure, things are not looking good for Yahoo. A copy of the mail it send users:


Dear (customer),

We are writing to inform you about a data security issue that may involve your Yahoo account information. We have taken steps to secure your account and are working closely with law enforcement.

What Happened?

Law enforcement provided Yahoo in November 2016 with data files that a third party claimed was Yahoo user data. We analyzed this data with the assistance of outside forensic experts and found that it appears to be Yahoo user data. Based on further analysis of this data by the forensic experts, we believe an unauthorized third party, in August 2013, stole data associated with a broader set of user accounts, including yours. We have not been able to identify the intrusion associated with this theft. We believe this incident is likely distinct from the incident we disclosed on September 22, 2016.

What Information Was Involved?

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The stolen user account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (using MD5) and, in some cases, encrypted or unencrypted security questions and answers. Not all of these data elements may have been present for your account. The investigation indicates that the stolen information did not include passwords in clear text, payment card data, or bank account information. Payment card data and bank account information are not stored in the system we believe was affected.

What We Are Doing

We are taking action to protect our users:

  • We are requiring potentially affected users to change their passwords.
  • We invalidated unencrypted security questions and answers so that they cannot be used to access an account.
  • We continuously enhance our safeguards and systems that detect and prevent unauthorized access to user accounts.

What You Can Do

We encourage you to follow these security recommendations:

  • Change your passwords and security questions and answers for any other accounts on which you used the same or similar information used for your Yahoo account.
  • Review all of your accounts for suspicious activity.
  • Be cautious of any unsolicited communications that ask for your personal information or refer you to a web page asking for personal information.
  • Avoid clicking on links or downloading attachments from suspicious emails.

Additionally, please consider using Yahoo Account Key, a simple authentication tool that eliminates the need to use a password on Yahoo altogether.

For More Information

For more information about this issue and our security resources, please visit the Yahoo Security Issues FAQs page available at https://yahoo.com/security-update.

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Protecting your information is important to us and we work continuously to strengthen our defenses.


Bob Lord

Chief Information Security Officer


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