50 million customers hit in LivingSocial cyber attack

By Alistair Barr

SAN FRANCISCO (Reuters) - LivingSocial, the second-largest daily deal company behind Groupon Inc, said on Friday that it was hit by a cyber attack that may have affected more than 50 million customers.

The company said the attack on its computer systems resulted in unauthorized access to customer data including names, email addresses, date of birth for some users, and "encrypted" passwords.

LivingSocial stressed that customer credit card and merchants' financial and banking information were not affected or accessed. The company also does not store passwords in plain text.

"We are actively working with law enforcement to investigate this issue," the company, part-owned by Amazon.com Inc, wrote in an email to employees.

The attack comes as LivingSocial struggles to handle a decline in consumer and merchant demand for daily deals. The company raised $110 million from investors including Amazon earlier this year, but was forced to make large concessions to get the new money.

Amazon invested $56 million in LivingSocial in the first quarter, according to a regulatory filing on Friday, which also revealed that LivingSocial had a first-quarter operating loss of $44 million on revenue of $135 million.

LivingSocial said on Friday that it was beginning to contact more than 50 million customers whose data may have been affected by the cyber attack.

LivingSocial told customers in an email that they should log on to LivingSocial.com to create a new password for their accounts.

"We also encourage you, for your own personal data security, to consider changing password(s) on any other sites on which you use the same or similar password(s)," LivingSocial Chief Executive Tim O'Shaughnessy wrote in the email.

"We are sorry this incident occurred," he added.

All Things D reported the cyber attack earlier on Friday.

(Reporting by Alistair Barr; Editing by Tim Dobbyn, Bernard Orr)

Source: http://news.yahoo.com/livingsocial-says-cyber-attack-affects-millions-customers-205938910.html

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