Most of you probably noticed (some poor lads even first hand) that there was a lot of hacking going on lately. People logged into other players accounts and tried to cause havoc in it. Mostly by selling heirlooms or by resetting chars.
a) Will those chars be restored.
Yes, definately. We will not allow anyone's fun and effort to be ruined by incidents like this. It will probably be a lot of work though, so just hang in there. Every transaction is logged, so it can be verified and restored. We will announce it when we have the tools&admins ready to reestablish the belongings.
b) How does it work.
It is, as far as I can see (the investigation isn't finished yet) related to the unpassed alts. Everyone can log into your account if you have no password set, all he needs is the name. We are currently believing, though not verified, that the reason why it got so easy is the NA stats. All you have to do is search for a player, check for some low level alt and hope for the best. I assume that works really well. This would also explain why it started when the stats were released and why it is mostly NA accounts that got hacked.
c) What are we doing about it.
Right now, we disabled logging into unpassworded alts. So this means you cannot use alts as a password retrieving tool for now. We will be changing the system entirely - when you join a server with a new alt, you will receive a 4 digit password that you can then enter into the website. This should deal with this exploit. However, this requires a website and a cRPG patch, and could take some time. We're trying to deal with this as fast as possible though.
Edit: actually, we changed it a bit. You now have 120 seconds to log into an alt before it gets impossible to login via this alt. Then you'd have to create a new alt and login within 120 seconds again. This should make it impossible for alt-guessers.
We're really sorry about this, and even further sorry that this will delay strategus ;)
But we're working on it, and all will be back to normal.
PS: please make sure your password is secure (not easily guessable). If you think your account got compromised, change your password.