Hotmail account hijacking has been a big thing in the past, even my Dad was affected when a Chinese hacker got into his account and changed his passwords. Thankfully - having changed languages in options - we were able to go back through each option (obviously in Chinese) and recover the account - some people however, are not so lucky.
Microsoft has updated it's security on Hotmail, and flushed out a tonne of hijackers. Today Microsoft are releasing new features to safeguard everyone's account from hijackers. The updates will help protect your password and in the unfortunate event that your account gets hijackers, it will provide a more secure recovery path so you'll always be able to get your account back and kick the hijacker out.
These are just a few things Microsoft do to safeguard your account from hijackers:
Use phishing schemes like fake "official" emails or websites that ask you to provide your password, Microsoft SmartScreen® technology filters over 5.5 billion spam emails per day and warns of suspicious emails and websites. Hotmail also helps you know an email is safe by adding a shield icon next to "trusted senders" we verify as legitimate.
Use key loggers and other types of malicious software (malware) to steal your password, Hotmail has introduced the "single use code" a one-time password sent to your cell phone so that you don't have to reveal your true password on public machines, risking its theft.
Attempt to intercept passwords on unsecure Wi-Fi networks (known as "man in the middle" attacks), we use SSL encryption to secure all connections at login. Later this fall, we will also provide the option to use SSL for the entire Hotmail session.
Try to guess your password by testing commonly used words, e.g., words in the dictionary, Hotmail protects your account by blocking login after multiple unsuccessful attempts. The number allowed depends on the reputation of the IP addresses being used.