Yahoo officially announced the discovery of another major cyber attack: more than 1bn user accounts were compromised three years ago in the largest breach of this type ever. This is double the number implicated in a 2014 breach disclosed by Yahoo in September and blamed on state hackers. The company believes all these hacks are connected.

The intruders used “forged ‘cookies’”, which could allow them to access users’ accounts without a password. The breach may be related to theft of Yahoo’s proprietary code. The company admitted that it began to suspect the breach in November, when law enforcement approached Yahoo with leaked user data including forged cookies.

The company confirmed that the stolen user account data may have included user names, email addresses, phone numbers, dates of birth, hashed passwords and security questions and answers. Yahoo assures that payment card data and bank account information were not stored in the system believed to be affected. The company is notifying the affected users and asking them to change their passwords. After Yahoo disclosed the smaller security breach a few months ago, 6 US senators sent it a letter demanding it reveal exactly when it had learned of the intrusion and calling for a hearing. However, no hearing has been scheduled thus far. The senators claimed they were disturbed that user data was first compromised 2 years ago, but the company only announced the breach in 2016.

Yahoo is currently being acquired by Verizon for $4.8bn, but new revelations make the sale not an easy one. In October, the company had cooperated with the National Security Agency to scan users’ emails for keywords on behalf of the agency. Of course, the hacks clearly damaged Yahoo’s value and the damage ought to be reflected in the buying price.

Text of Apology Letter Written by Yahoo

Dear xxxxxx,

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


Bob Lord
Chief Information Security Officer