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In the vast digital landscape, breaches of security shake foundations and leave lasting impacts. Enter the saga of Yahoo’s tumultuous battles with cyber threats, where the line between data protection and vulnerability blurs. Delve into the annals of history, where the 2016 data breach stands as a testament to the perils lurking in cyberspace. From clandestine attacks to monumental revelations, the story unfolds with each twist and turn, revealing the intricate web of challenges faced by one of the internet’s pioneers.

Yahoo Data Breaches Explained

What Happened?

The 2016 data breach was one of the largest data breaches in history. The breach probably occurred due to attacks from a government-backed entity that began in 2014. The investigation revealed that the true identities, email accounts, birthdates, and phone numbers of 500 million Yahoo users were leaked to the public. The company disclosed that most passwords were secured with the strong bcrypt algorithm, rendering the passwords essentially worthless unless decrypted.  

A few months later, it was discovered that Yahoo had actually been compromised prior to the breach. The company disclosed that a separate set of hackers had obtained the data of 1 billion accounts. In addition to personal information like names, birthdates, email addresses, and passwords, security questions and answers were also exposed. In October 2017, Yahoo updated its assessment, stating that the breach, which occurred in 2013, had compromised all 3 billion user accounts. The security breaches resulted in Yahoo losing approximately $350 million from the sale to Verizon. Verizon ended up spending $4.48 billion for Yahoo’s main Internet operations. The sale agreement stated that both companies were responsible for regulatory and legal liabilities resulting from any breaches.

The Yahoo data breach has been attributed to a vulnerability in input validation, which enabled malicious actors to capitalize on weaknesses in user identification and authorization cookies (used for users’ identification). The security breach facilitated the ability for malicious actors to exploit the aforementioned cookies, thereby enabling them to impersonate any user identity and compromise user accounts and related activities.


  • 2016 (December): The Full Billion. Yahoo disclosed its largest security breach to date on December 14, 2016. The cyber intrusion, widely recognized as the most significant breach of user data to date, occurred in 2013 but was only revealed after a recent inquiry instigated by a tip-off from law enforcement authorities. The company asserts that the attack is “presumably distinct” from the breach disclosed in September 2016. The data breach, as reported by chief information security officer Bob Lord, resulted in the unauthorized acquisition of personal information including names, email addresses, telephone numbers, dates of birth, hashed passwords, and in some instances, encrypted or unencrypted security questions and answers. The infiltration, it is believed, was facilitated through the use of counterfeit cookies, enabling cybercriminals to access user accounts without requiring passwords. The company has asserted that it posits a potential linkage with a “state-sponsored actor.”
  • 2016 (September): The Half-Billion Hack. On September 22, 2016, Yahoo publicly disclosed a security breach where its servers were compromised in 2014, leading to unauthorized access to 500 million user accounts. The hackers obtained sensitive personal information, including names, e-mail addresses, telephone numbers, encrypted or unencrypted security questions and answers, dates of birth, and encrypted passwords. Yahoo reported that the cyber attack was conducted by hackers allegedly sponsored by a state entity. The assertion was contradicted by security researchers from InfoArmor.
  • 2014 (January): Yahoo Mail. Yahoo was compelled to acknowledge the detection of a purported breach of customer email account information. It has been observed that hackers utilized a compilation of usernames and passwords obtained from a third-party server to gain unauthorized access to users’ accounts and procure additional names and e-mail addresses. Yahoo expeditiously initiated a password reset to mitigate the ongoing attacks.
  • 2012 (July): Yahoo Loses Its Voices. Yahoo’s 2010 acquisition of the online publishing network Associated Content for $100 million posed certain challenges for the company. A group of cyber attackers released a collection of email addresses and encrypted passwords that were illicitly obtained from the servers of Yahoo Voices, which was formerly known as Associated Content. The security breach resulted in the compromise of 400,000 user accounts. The salient concern pertains to the deficient security measures within the systems bequeathed to Yahoo, which have not been subject to necessary upgrades.

Will there be a compensation?

It’s common for large-scale data breaches to result in compensation for affected individuals. The exact Yahoo settlement amount may vary based on factors like the user’s location and the extent of the data breach.

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Am I Affected?

If you were affected, you should receive a data breach notification letter within 72 hours of its discovery. But, there have already been cases when these notices don’t get sent out at all, either as part of a cover-up to protect the company’s image or to avoid identifying users who might be entitled to compensation. So in case of a data leak, it’s a smart move to fill out the form and join the claim regardless. 

What To Do?

Whether you believe you were affected or are just exploring your options, you can quickly and easily check your eligibility and compensation amount with our quick data breach checker. In under two minutes, you’ll know how much money you can get and will be able to claim compensation. Give it a try!

Legal Proceedings and Yahoo Settlement

In 2020, Yahoo became embroiled in 23 class-action lawsuits due to reported data breaches. The legal actions pertained to a cybersecurity incident that transpired in July 2016. Surprisingly, the CEO was purportedly cognizant of the breach but opted to conceal it from users, resulting in allegations of egregious negligence. In light of the Yahoo email breach, the company has proposed a remedy for the affected individuals, including those who maintained a Yahoo account from January to March 2020. The period of turmoil aligns with Yahoo’s acquisition by Verizon for $4.8 billion in July 2016, contributing to the heightened legal complexities the company experienced.

On September 9, 2016, Yahoo provided a statement to the Securities and Exchange Commission (SEC) assuring them that it was not aware of any breaches. However, less than two weeks later, it was publicly disclosed that a breach had occurred, with evidence indicating that Yahoo may have had prior knowledge of the breach. Six members of the legislative body directed inquiries to the chief executive officer, expressing concerns regarding potential legal consequences.

The Securities and Exchange Commission (SEC) levied a fine of $35 million against Yahoo for its delayed disclosure of a security breach. Yahoo failed to conduct a comprehensive investigation or assessment of the necessity for disclosure. The findings of the Securities and Exchange Commission’s investigation exposed Yahoo’s failure to disclose the potential ramifications of the breach in reports submitted over a two-year period. This indicates a deficiency in the company’s disclosure controls and procedures.

How to Claim Yahoo Compensation

If you want to get compensation for the data breach, you need to join a group lawsuit, also known as a class action. When you do this, you’ll work with a financial litigation partner who handles everything for you. That is us! Your task is just to apply and then wait to get money

Remunzo handles all the hard work. We set up the lawsuit and take the corporation to court for you. Corporations don’t want to pay money easily, but Remunzo will fight hard to get your settlement payout. When joining thousands of others in a lawsuit like this, the corporation is more likely to pay and the settlement payment amount per person i.e. how much will you get tends to be higher.

Remunzo will keep you updated about the settlement status. But you need to be patient because it can take months till the settlement payments are done and you get paid

Quickly check your eligibility and compensation amount with our simple data leak checker. In under 2 minutes, you’ll know how much money you can get and will be able to claim compensation. Give it a try!

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Impact of the Yahoo Data Breach on Users

The initial Yahoo data breach was reported to have impacted 500 million users, while the subsequent breach was reported to have affected 1 billion users. Subsequently, they acknowledge that the entirety of the company’s 3 billion users experienced an impact. The quantity of data that has been illicitly obtained currently stands as the most significant in the modern era of the Internet. 

Unauthorized individuals gained access to personal data such as names, email addresses, phone numbers, security question responses, birthdates, and encrypted passwords through hacking activities. The researchers further identified the presence of web cookies utilized to falsify login credentials in order to illicitly acquire entry into user accounts.

Yahoo’s Response and Changes in Data Security

Following the cyberattacks, Yahoo has rendered the forged cookies utilized in the security breach void. It is no longer permissible to use unencrypted security questions and answers to access the account, and Yahoo has implemented a two-step verification process. 

“As we have previously disclosed, our outside forensic experts have been investigating the creation of forged cookies that could have enabled an intruder to access our users’ accounts without a password,” a Yahoo spokesperson said in an emailed statement. Yahoo improved its data security by implementing TLS encryption for the transmission of specific types of information, including financial services and payment details. 

Future Implications and Impact on the Industry

The 2013 and 2014 Yahoo data breaches had significant ramifications for both the company and the wider technology sector. The breaches affected Yahoo’s value, resulting in a decrease in the price Verizon was willing to pay to acquire it. The impact went beyond financial issues, as Yahoo users’ confidence was greatly damaged.

The Yahoo breaches resulted in widespread changes across the industry, bringing heightened attention to cybersecurity. This prompted technology companies to strengthen their security protocols, implement more stringent regulatory measures, and improve their methods of enforcing data security and privacy. The aforementioned incidents also underscore the necessity of comprehensive cybersecurity evaluations in mergers and acquisitions. Moreover, the breaches demonstrated lasting repercussions, leading to heightened user consciousness. In contemporary digital environments, individuals increasingly emphasize creating robust passwords and utilizing two-factor authentication for enhanced security. Simultaneously, organizations have begun to allocate greater resources toward bolstering cybersecurity protocols and strengthening incident response capacities. These events sparked in-depth discussions on the importance of protecting data and privacy and the necessity for global cooperation in addressing cyber threats.

Other Famous Incidences of Privacy Breaches

Yahoo is not the only one that had its data stolen. Hundreds of other companies have faced or will face data breaches in the future. Therefore, we strongly suggest using our Compensation Calculator. This tool will help you find out how many compensation claims you are eligible for and how much money you might get—and we can help you easily get it.


In summary, the 2013 and 2016 Yahoo data breaches compromised billions of user accounts, leading to significant legal and financial repercussions. Yahoo faced numerous class-action lawsuits and a $35 million fine from the SEC for delayed disclosure. The breaches underscored the importance of robust data security measures. Yahoo responded by nullifying forged cookies, enhancing account access controls, and implementing encryption protocols. These actions aim to restore user trust and prevent future breaches.

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Are you missing out on other data breach payouts? Try our compensation calculator and find out now!

Frequently Asked Questions

How to minimize or prevent Data breach impact?

Using virtual payment cards with spending limits and unique email addresses for different services can greatly reduce the risks of data breaches. Disposable virtual cards protect your financial details, while custom email addresses (like “”) help identify compromised services. These strategies add security layers, minimizing the impact of breaches on your personal and financial data.

What to do after a data breach?

In case of a data breach, promptly change your passwords on the affected accounts, making them strong and unique. Activate two-factor authentication for added security. Monitor your financial statements and credit reports for any unusual activity. Alert your bank or credit card provider about potential fraud. Be cautious of phishing scams following the breach and consider a credit freeze. Finally, report the incident to the appropriate authorities.

What is a Data breach notice?

A data breach notice is an official alert sent by an organization to individuals whose personal data, including potentially compromised passwords, may have been exposed in a security breach. Such a notice can often follow warnings from services like Apple or Google indicating that “this password appeared in a data leak.” It details the nature of the breach, affected data types, potential risks, and the organization’s remedial actions. The notice advises on protective measures, such as changing passwords and monitoring credit reports to mitigate harm.

Can I sue, and how to join a class action lawsuit?

Yes, you can sue for a data breach. With Remunzo, joining an active class action lawsuit is easy. Check your eligibility on our platform, and if your case is active, you can join the lawsuit. Remunzo handles all legal proceedings and negotiations for a settlement. These processes can take some time, but we keep you updated throughout. Use our Quick Data Leak Checker to see if you qualify to join and claim compensation.

When will I get paid the data breach settlement?

The time it takes to receive a data breach settlement payment varies, often taking several months after a settlement is reached. Factors like case complexity, number of claimants, and legal procedures affect the timeline. Remunzo will keep you informed about the settlement progress, but patience is key as these processes can be lengthy.


  1. 500 Million Yahoo Users Affected by Data Breach – Password Change Recommended – Wiadomości bezpieczeństwa. (n.d.).
  2. Condliffe, J. (2020, April 2). A history of Yahoo hacks. MIT Technology Review.
  3. David Lukić  (2021, January 25). What to do if you’re victim of Yahoo Data Breach. IDStrong.
  4. Inside the Russian hack of Yahoo: How they did it. CSO Online. (2017, October 4).
  5. Online, B. (2020, November 23). Yahoo Data Breach: What actually happened?. Medium.,for%20Yahoo’s%20core%20Internet%20business.
  6. Perlroth, N. (2017, October 3). All 3 billion Yahoo accounts were affected by 2013 attack. The New York Times.
  7. Reuters | Breaking International News & Views. (n.d.).
  8. Yahoo Data Breach Lawsuit Lawyer. Cohen & Cohen. (2022, October 26).


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