Telecom has threatened to axe Yahoo as its email service provider, pending an investigation into a security breach that sparked a spam attack.

A review over the next two months will investigate a series of issues that Telecom said had affected the email service badly, and led to repeated apologies to its customers.

Telecom retail chief executive Chris Quin said saying sorry to its frustrated customers was no longer good enough.

The review was triggered after potentially hundreds of thousands of emails were sent out from Yahoo!Xtra users' accounts to anyone in their contacts list. The email had a link to a website asking for personal details including credit-card numbers.

Telecom outsourced its Xtra email service to Yahoo in 2007. The service is free to Telecom's 450,000 broadband customers.

"It was the right thing to do at the time in terms of meeting our customers' desire for an ongoing email service associated with their Telecom broadband account," Mr Quin said.

"However, the global email environment has changed markedly since then and we believe the time is right for a comprehensive review of our approach in this area."

Dominion Post readers have reported cancelling their email accounts after the security breach.

Telecom spokeswoman Jo Jalfon said the number of people using free email was not recorded and it was unknown how many customers had deactivated their accounts.

There had been few complaints to Telecom yesterday, but the call centre had received a rise in queries about how to change email passwords.

Westpac Bank said no customers had reported their accounts being hacked, but a spokesman said the incident was a "timely reminder" of the importance of protecting online information.

ANZ Bank customers had not reported any issues either.

- © Fairfax NZ News

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