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This just happened to me over Labor Day weekend. They got into my facebook account as well. The only difference was that my friends were told that I was mugged in Wales and needed money asap. They actually had the nerve to instant message friends who were online. Unfortunately this is happening more often and it's not just Hotmail accounts either so change your passwords often and don't use the same one for multiple logins. It's a real pain to manage passwords but it's a bigger pain to have your email hacked into.
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