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Hackers hit LivingSocial and threaten 50 million users

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Hackers have hit the daily deals site LivingSocial, gaining access to credentials and encrypted passwords of its 50 million registered users.

Although the passwords were hashed and salted, the company said in a memo to employees that data for its 50 million users might have been compromised and it was contacting customers.

The memo said: “We recently experienced a cyber attack on our computer systems that resulted in unauthorised access to some customer data from our servers. We are actively working with law enforcement to investigate this issue.

“The information accessed includes names, email addresses, date of birth for some users, and encrypted passwords — technically ‘hashed' and ‘salted' passwords. We never store passwords in plain text.”

It also confirmed that neither the database that stores customer credit card information or the database that stores merchants' financial and banking information were affected or accessed.

The memo, signed by CEO Tim O'Shaughnessy and featured by allthingsd, said that it was "redoubling efforts to prevent any issues in the future" and in anticipation of a high call volume, it was likely to temporarily suspend consumer phone-based servicing and devote all of its resources to web-based servicing.

O'Shaughnessy said: “I apologise for the formality of this note, which the circumstances demand. We need to do the right thing for our customers who place their trust in us, and that is why we're taking the steps described and going above and beyond what's required. We'll all need to work incredibly hard over the coming days and weeks to validate that faith and trust.”

Paul Ducklin, head of technology for Sophos Asia Pacific, said that rather than storing an actual password, consider storing a random string of characters instead; which combine the password and this random string and pass the salted password through a non-reversible cryptographic function to get a message digest code.

“A crook can check to see if your password is, say ‘s3cr3cy' by salting-and-hashing himself, but he has to start with a guess, because he can't go back from the hash to your password,” he said.

“That's why easy-to-guess passwords are bad: the crooks crack them first.”

Terry Greer-King, managing director of Check Point UK, said: “LivingSocial users should change their passwords quickly, even though the stolen passwords were encrypted: this protection can be cracked using easily-available programs.

“They should also be cautious about clicking on links in emails they receive purporting to be from LivingSocial. There's a real risk that the stolen email addresses will be used to send phishing emails to users, to try and harvest more data such as credit card details.

“In 2012, businesses globally were reporting an average of nearly 70 attempted security attacks on their networks every week. For the attackers, this is just a numbers game.”

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