SERVICE NSW has confirmed 186,000 accounts were hacked in a data breach earlier this year.
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The cyber attack targeted 47 staff email accounts, stealing 3.8 million documents making up 738 gigabytes of data.
NSW Labor party has come out demanding the government notify motorists whose "licences were exposed through an unsecured cloud storage site and is calling for an investigation into the privacy breach".
According to a release from Service NSW this process has already begun with person-to-person registered Australia Post letters being sent to all affected drivers.
"The cyber incident was a criminal attack," the statement said.
"Cyber-attacks occur daily, and we are often able to intercept them. On this occasion we couldn't stop the attack."
A NSW Police investigation is underway and a review by the auditor general of Service NSW's practices and systems will be completed.
The audit will assess how effectively Service NSW handles personal customer and business information to ensure its privacy.
