"We were alerted by Yahoo! yesterday afternoon about it, after we had some customers say to us that they had received some suspicious looking emails.
"Yahoo worked overnight on implementing security protocols and we are working with them to address the issue.''
Telecom said in a statement possibly up to 1000 people were affected, "although we will continue to monitor this''.
Customers who believed their account had been compromised were required to change their password.
"This is recognised as the best way to re-secure their account.''
Telecom said it was also urgently working to implement a much simpler process for alerting customers whose accounts had been compromised and helping them to re-secure their accounts.
"This will automatically direct customers to a web page that steps them through how to change their password and make any necessary changes to their account settings. We hope to have this new system in place later today.''
Customers were advised to delete any emails that appeared to be suspicious and to never click on suspicious links contained within emails.
Telecom said it was pleased with Yahoo!`s response.
"Yahoo handles many billions of emails each day and can't possibly monitor every single one. Frankly nor would our Xtra customers want them to do so.
"From Telecom's perspective, we believe that Yahoo!`s response to this matter has been timely and appropriate.''
Telecom launched a two-month review of the relationship after February's hacking disruptions, which it said at the time were the latest in a series of issues over the past year.
The company has since said it would continue to offer its Yahoo! Xtra email service with Yahoo! as their email provider, after receiving strong feedback from customers and a commitment to respond to security issues.
"In the last 24 hours we have seen this new commitment in action as both Telecom and Yahoo! have worked quickly to contain this latest incident,'' Telecom said.
