Information from at least 500 million Yahoo accounts was stolen from the company in 2014 and the  company believes that a state-sponsored actor was behind the hack.

The information may have included names, email addresses, telephone numbers, dates of birth, and, in some cases, encrypted or unencrypted security questions and answers, Yahoo said.

Claims surfaced in early August that a hacker using the name “Peace” was trying to sell the usernames, passwords and dates of birth of Yahoo account users on the dark web — a black market of thousands of secret websites.

Reset passwords

Yahoo recommends that users who haven’t changed their passwords since 2014 do so.

The company said it was notifying potentially affected users and taking steps to secure their accounts. That included invalidating unencrypted security questions and answers so that they could not be used to access an account and asking potentially affected users to change their passwords.

Yahoo users should change passwords and security questions and answers for any other accounts on which they use the same or similar information used for their Yahoo account.

In addition, avoid clicking on links or downloading attachments from suspicious emails that claim to be updates from Yahoo about the breach. Hackers often use news of big breaches to conduct “phishing” campaigns. Yahoo users should be cautious of unsolicited communications that ask for personal information, the company said.

Finally, all users should review their online accounts for suspicious activity

Sale in progress

The announcement comes as Yahoo looks to complete its $4.8. billion sale of its core Internet business to media giant Verizon Communications.

Given the unsettled nature of Yahoo’s ownership just now, “regulators should be concerned with who will take responsibility for the response to this compromise. It can be easy for the ‘right thing to do’ to slip through the cracks in a multi-billion dollar transition, said Tim Erlin, senior director of IT security and risk strategy at Tripwire, a computer security firm.

Yahoo Chief Executive Officer Marissa Meyer stands to earn as much as $44 million if she leaves the company as part of that deal.

Credential stuffing

Most consumers might not think there’s much in their Yahoo account that would be of use to hackers, which typically might only include only their email and Yahoo password. However that simple duo offers multiple users for ingenious hackers bent on extracting the maximum value from information, say experts.

First, the password. According to a Gartner survey, 50% of users reuse their passwords across multiple platforms. So armed with an email address and Yahoo password, hackers might be able to gain access to multiple accounts.

The technique is called “credential stuffing” and it’s become epidemic over the last year and a half, said Avivah Litan, a vice president and analyst at Gartner Research.

“The bad guys get lists of user IDs and password and then test them, they run through them at all the sites they want to attack to see where they work,” she says.

Once hackers gain access to other accounts, they are able to assemble dossiers on individuals. These are called “fullz” and include as much information as the hacking group has about a person, assembled from multiple sources over time. Typically they contain the person’s name, Social Security number, birth date, address, birthday, account numbers and other data.

“There are fullz available probably for most of the U.S. population,” said Litan.

The attackers don’t only use that information to go after bank accounts and credit cards, but also less obvious and harder to track information that is still worth money on the black market.

That can include loyalty points at hotel chains and airlines, avatars and points from online games, stored value in coffee cards. Once accessed, all of these can be siphoned off, bundled and then resold.

“They’ve gone low, slow and distributed. You used to be able to see these attacks coming through really quickly after a breach,” said Litan. Instead organized crime groups take their time, harvesting points and value.

“It’s very lucrative,” said Litan.

– USA Today