Yahoo reports massive data breach involving 1 billion accounts

The data breach occurred in August 2013 and is not connected to another recently disclosed huge breach

In what is likely the largest data breach ever, Yahoo is reporting that data associated with more than 1 billion user accounts was stolen in August 2013.

The incident is separate from a breach Yahoo reported in September involving at least 500 million users that originally occurred in late 2014 and shook public trust in the company.

Stolen user data from this new breach involves names, email addresses, telephone numbers, dates of birth, and hashed passwords using an aging algorithm known as MD5 that can be cracked.

In some cases, encrypted and unencrypted security questions from users was also stolen, the company said on Wednesday. However, no payment card data or bank account information was taken.

Yahoo is notifying potentially affected users, and is asking them to change their passwords and invalidate affected security questions. Users should also check other accounts that use similar security questions.

Yahoo has blamed this newly disclosed breach on an "unauthorized third party," without providing more details. It initially learned about the breach in November when law enforcement approached the company with data files that allegedly came from Yahoo, but were obtained by a third party.

The company then verified that stolen data was indeed legitimate with the help of outside forensic experts.

Verizon, which is in the process of buying Yahoo, said on Wednesday, "We will evaluate the situation as Yahoo continues its investigation. We will review the impact of this new development before reaching any final conclusions."

In what appears to be a separate incident, the company also said an intruder was able to access its proprietary code on how to forge the internet cookies with the site. This would allow a hacker access to a users’ account without the need for a password.

Yahoo said the cookie forgery is partly connected with the state-sponsored hacker responsible for the data breach the company reported in September.

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