Telecom says everyone in New Zealand with an email address should change their passwords out of fear a cyber attack could get even worse.
The trouble began about 10 February with a cyber attack that led some Yahoo! Xtra customers to inadvertently send out potentially corrupting emails to their contacts.
Some 60% of the 87,000 customers affected by spam have since changed their passwords, but thousands of customers were unable to access their email accounts by Monday.
Internet watchdog NetSafe warns the attack could affect customers from other providers who were on mailing lists of those affected and a huge amount of detailed personal information could have been downloaded by hackers.
Telecom retail chief executive Chris Quin said on Monday there is no evidence of this happening, but Yahoo! has not confirmed that it has not. However to be safe, everyone should update their passwords.
On Saturday night, Telecom cancelled the passwords of more than 15% of its 450,000 customers. Mr Quin said 60,000 customers might have been compromised so it was decided to change their passwords and tell them they were doing so at the same time, not in advance, because of the danger.
Mr Quin told Radio New Zealand's Morning Report programme that Telecom did not have the resources to handle a sudden problem for 60,000 customers and 50% more staff had put on to try to help deal with this.
Despite the problems, he said 90% of customers have been able to change their passwords online.
But NetSafe chief executive Martin Cocker believes Telecom has been too slow in its response to the cyber attack and cancelling passwords should have happened much sooner.
Mr Cocker said changing passwords will stop cyber criminals' direct access to the email account - but once the information is out, there is no taking it back.
Ted Woodfield, of Wellington, said he changed his password and was then told to do so again, but this was rejected. In the end, he said he could not get in to his system at all.