On February 14th, Mad Otter Games issued a statement to let its community know that a hacker had "acquired access to game servers". In a new note, the team reassured its community that all player data is backed up and will be restored in the near future. In addition, players are assured that "player names, addresses, payment or other credit card information, passwords and other personal information were NOT compromised in this security incident".
Here is the most recent letter in its entirety:
At approximately 2:45 pm PST on Thursday, February 14th, a hacker gained access to our servers. We need to notify you that it is possible this hacker got the email names that you use to log into Villagers & Heroes. Your game passwords are encrypted, therefore the hacker cannot access your game accounts. Just to be 100% safe, we recommend that if you use your game password for any other accounts, that you change it. We can tell you that all of your accounts and characters are completely backed up, and will be restored. We are working to completely secure the servers so this does not happen again. We estimate this process will take 2-4 days. We apologize for this extreme downtime and will be working tirelessly to restore everything and get the game up and running again. Additionally, we do not store your name, address, or any payment or credit card info on our servers, so that was not compromised. We will absolutely be compensating you for missed calendar rewards, and then some. In short, we will make this up to you, we promise. Thank you again so much for your patience and understanding. You are truly a fantastic community.
Learn more on the Villagers & Heroes site, though it seems to have issues connecting at this writing.