Bizarre Australian iPhone, iPad hijack serves as yet another reminder to use unique passwords

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There are reports coming out of Australia about iPhones and iPads somehow locked down by Find my iPhone, in some cases with a "held hostage" message claiming the devices will only be unlocked if a $50 ransom is paid. What makes this bizarre is that it appears to only be happening in Australia (and the internet has no borders) and it's unclear how the attackers are accessing Find my iPhone for the devices in question. One theory is that some other, local service was hacked and because people were using the same email and password combinations, the attacker could access their iPhones and iPads online via Find my iPhone as well. So, if true, what can be done?

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