Yahoo disclosed that a breach in August 2013 by a group of hackers had compromised 1 billion accounts. In this instance, security questions and answers were also compromised, increasing the risk of identity theft. The breach was first reported by Yahoo while in negotiations to sell itself to Verizon, on December 14, 2016, and forced all affected users to change passwords and to reenter any unencrypted security questions and answers to make them encrypted in the future.

However, by October of 2017, Yahoo changed the estimate to 3 billion user accounts. An investigation revealed that users' passwords in clear text, payment card data and bank information were not stolen. Nonetheless, this remains one of the largest data breaches of this type in history.