diff --git a/backend/app/core/security.py b/backend/app/core/security.py
index d6985f9..4d7e8e9 100644
--- a/backend/app/core/security.py
+++ b/backend/app/core/security.py
@@ -8,16 +8,13 @@ import logging
 from datetime import datetime, timedelta
 from typing import Optional, Dict
 import jwt
-from passlib.context import CryptContext
+import hashlib
 
 from app.config import get_settings
 
 logger = logging.getLogger(__name__)
 settings = get_settings()
 
-# Password hashing context
-pwd_context = CryptContext(schemes=["bcrypt"], deprecated="auto")
-
 
 def create_access_token(
     data: Dict,
@@ -96,15 +93,15 @@ def decode_token(token: str) -> Optional[Dict]:
 
 def hash_token(token: str) -> str:
     """
-    Hash token for secure storage
+    Hash token for secure storage using SHA-256
 
     Args:
         token: Token string to hash
 
     Returns:
-        Hashed token
+        Hashed token (hex digest)
     """
-    return pwd_context.hash(token)
+    return hashlib.sha256(token.encode('utf-8')).hexdigest()
 
 
 def verify_token_hash(token: str, hashed: str) -> bool:
@@ -118,7 +115,7 @@ def verify_token_hash(token: str, hashed: str) -> bool:
     Returns:
         True if token matches hash
     """
-    return pwd_context.verify(token, hashed)
+    return hash_token(token) == hashed
 
 
 def get_token_subject(token: str) -> Optional[str]:
diff --git a/backend/scripts/create_test_users.py b/backend/scripts/create_test_users.py
index f9df9f3..be310f4 100644
--- a/backend/scripts/create_test_users.py
+++ b/backend/scripts/create_test_users.py
@@ -37,7 +37,7 @@ async def create_test_users():
 
         # Admin user
         result = await session.execute(
-            select(User).where(User.email == "admin@test.local")
+            select(User).where(User.email == "admin@example.com")
         )
         admin = result.scalar_one_or_none()
 
@@ -45,7 +45,7 @@ async def create_test_users():
             admin = User(
                 id=uuid.uuid4(),
                 azure_ad_id="test_admin",  # Special flag for test users
-                email="admin@test.local",
+                email="admin@example.com",
                 display_name="Test Admin",
                 given_name="Admin",
                 surname="User",
@@ -58,13 +58,13 @@ async def create_test_users():
                 }
             )
             session.add(admin)
-            print(f"✅ Created admin user: admin@test.local / admin")
+            print(f"✅ Created admin user: admin@example.com / admin")
         else:
             print(f"ℹ️  Admin user already exists")
 
         # Regular user
         result = await session.execute(
-            select(User).where(User.email == "user@test.local")
+            select(User).where(User.email == "user@example.com")
         )
         user = result.scalar_one_or_none()
 
@@ -72,7 +72,7 @@ async def create_test_users():
             user = User(
                 id=uuid.uuid4(),
                 azure_ad_id="test_user",  # Special flag for test users
-                email="user@test.local",
+                email="user@example.com",
                 display_name="Test User",
                 given_name="Test",
                 surname="User",
@@ -85,7 +85,7 @@ async def create_test_users():
                 }
             )
             session.add(user)
-            print(f"✅ Created regular user: user@test.local / user")
+            print(f"✅ Created regular user: user@example.com / user")
         else:
             print(f"ℹ️  Regular user already exists")
 
@@ -97,8 +97,8 @@ async def create_test_users():
     print("Test users created successfully!")
     print("="*60)
     print("\n📝 Login credentials:")
-    print("   Admin:  admin@test.local / admin")
-    print("   User:   user@test.local / user")
+    print("   Admin:  admin@example.com / admin")
+    print("   User:   user@example.com / user")
     print("\n🔗 Use these at: http://localhost:3000")
     print("="*60)
 
diff --git a/frontend/src/components/SimpleLogin.tsx b/frontend/src/components/SimpleLogin.tsx
index 5f51368..8a4f2d6 100644
--- a/frontend/src/components/SimpleLogin.tsx
+++ b/frontend/src/components/SimpleLogin.tsx
@@ -34,19 +34,33 @@ const SimpleLogin: React.FC<SimpleLoginProps> = ({ onLoginSuccess }) => {
       onLoginSuccess(response.data.access_token, response.data.user);
     } catch (err: any) {
       console.error('Login failed:', err);
-      setError(err.response?.data?.detail || 'Login failed. Please check your credentials.');
+
+      // Handle validation errors from FastAPI
+      if (err.response?.data?.detail) {
+        const detail = err.response.data.detail;
+        if (Array.isArray(detail)) {
+          // Pydantic validation errors
+          setError(detail.map((e: any) => e.msg).join(', '));
+        } else if (typeof detail === 'string') {
+          setError(detail);
+        } else {
+          setError('Login failed. Please check your credentials.');
+        }
+      } else {
+        setError('Login failed. Please check your credentials.');
+      }
     } finally {
       setIsLoading(false);
     }
   };
 
   const fillAdmin = () => {
-    setEmail('admin@test.local');
+    setEmail('admin@example.com');
     setPassword('admin');
   };
 
   const fillUser = () => {
-    setEmail('user@test.local');
+    setEmail('user@example.com');
     setPassword('user');
   };
 
@@ -116,8 +130,8 @@ const SimpleLogin: React.FC<SimpleLoginProps> = ({ onLoginSuccess }) => {
         <div className="login-info">
           <p><strong>Test Accounts:</strong></p>
           <ul>
-            <li>Admin: admin@test.local / admin</li>
-            <li>User: user@test.local / user</li>
+            <li>Admin: admin@example.com / admin</li>
+            <li>User: user@example.com / user</li>
           </ul>
         </div>
       </div>