LivingSocial, the daily deals website, has suffered a huge data breach on its computer systems, impacting up to 50 million customers.
LivingSocial CEO Tim O'Shaughnessy sent employees an email, seen by AllThingsD, which explained that the company had experienced a cyber-attack that resulted in "unauthorised access to some customer data from our servers", before stating that it is working with law enforcement to investigate the matter.
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The Washington DC-based firm said that information included the names, email addresses and dates of birth of many users, as well as encrypted passwords.
Fortunately for the firm, the databases that store customer credit card information, and merchant's financial and banking information, were not affected or accessed, it said.
The daily deals website sent customers a separate email emphasising that their credit card information was not affected or accessed, before asking them to create a new password.
"Although your LivingSocial password would be difficult to decode, we want to take every precaution to ensure that your account is secure, so we are expiring your old password and requesting that you create a new one," it said.
The breach is the latest in a long line of attacks against social websites. Last year LinkedIn reportedly had more than 6.5 million hacked passwords posted online. Other high-profile attacks involved the firms Evernote and Zappos.
The attack on LivingSocial – part-owned by Amazon – comes at a tough time for the firm, which competes with Groupon in the online discount industry.
Online coupon sites have already been hit by ailing market conditions in the last year. In February, Groupon lost 77 per cent of its share value since its IPO in November 2011, as investors grew concerned that customers are tiring of the deals it offered. LivingSocial recently raised $110m (£70.8m) from existing investors, after a slew of losses in 2012.