Third-Party Data Breaches: What You Need to Know

Kaseya Ransomware Supply Chain Attack

Remote Monitoring & Management software attacks have become a primary concern for many IT teams and Managed Services Providers. On July 2, 2021, Kaseya announced that attackers had taken advantage of a vulnerability in the company's VSA software to stage a ransomware attack against Kaseya’s customers. Dozens of IT service providers and hundreds of downstream customers were affected resulting in millions of dollars worth of damages.

Like the SolarWinds Orion breach and other recent third-party cyber security incidents, this is another example of the potential exponential impact of supply chain attacks on the extended supply chain.

Mercedes-Benz

Mercedes-Benz announced in June 2021 that approximately 1.6 million unique records were leaked through a third-party vendor's cloud storage platform. An eternal cybersecurity researcher reportedly found the flaw and notified Mercedes-Benz of the incident. According to Mercedes-Benz, less than 1,000 customers had sensitive information like social security numbers and drivers license information leaked.

The car manufacturer disclosed the breach on Thursday, June 24th. It appears that potential buyer and customer information was leaked from filling out information on Mercedes-Benz websites between January 1, 2014 through June 19, 2017. Any individual seeking to access these files would need to implement “special software programs and tools” to find the information leaked. The company announced that the security flaw has been remediated and plugged.

Possibly leaked data included:

• Driver's license numbers

• Social Security numbers

• Credit card information

• Birthdays

• First and last name

• Email address

• Phone numbers

• Purchased vehicle information

Volkswagen

Over 3.3 million customers were impacted in a data breach of car manufacturer Volkswagen announced in June 2021. Current and prospective customers' information was left exposed online between August 2019 and May 2021. According to Volkswagen, they were alerted that an unauthorized third party may have accessed the customer information on March 10, 2020.

Possibly exposed data included:

• First and last name

• Personal address

• Business addresses

• Email addresses

• Phone numbers

• Vehicles purchased

• Vehicles leased

• Vehicle ID numbers makes, models, years, and colors

PracticeMax Ransomware Attack

Healthcare billing and IT solutions vendor PracticeMax announced that it was the victim of a ransomware attack that occurred between April 17 and May 5, 2021. PracticeMax is a business associate of healthcare organizations Humana and Anthem. During the breach, an unauthorized actor accessed and stole more than 4,000 Humana patient files containing protected health information (PHI).

SolarWinds

The SolarWinds supply chain breach, first reported in December of 2020, impacted over 18,000 users of its Orion network management product. The SolarWinds supply chain breach continues to wreak havoc on Orion customers around the world, as they continue to identify and mitigate its risks. The list of impacted companies includes major US government agencies and firms:

• Department of Energy

• Department of the Treasury

• Department of Commerce

• State and local governments

• Department of State

• Department of Homeland Security

• National Institutes of Health

• The Department of Defense

Private companies affected by the breach include Microsoft and FireEye. This security incident dealt a major blow to US national security that revealed major flaws in cybersecurity defenses. Recognizing the potentially damaging impact on companies’ operations, Prevalent released a free event and incident management assessment to its customers soon after the breach was first reported.

Capital One

In 2019, Capital One reported a data breach affecting over 100 million customers and involving data going back a decade. The Office of the Comptroller of the Currency cited the failure “to establish effective risk assessment processes” before moving IT infrastructure and data to the public cloud as one of the principal causes of the breach. Capital One was fined over $80,000,000 for the breach. Data compromised included:

• Social Security Numbers

• Bank Account Numbers

• Customer Credit Scores

• Payment Histories

• Self-Reported Incomes

GE

The 2020 GE breach shows that a security incident can harm not only customer relationships, but also employee relationships and trust in the company. General Electric’s human resources document management provider, Canon Business Process Service, suffered a breach at the beginning of 2020. Over 200,000 current and former employees' sensitive information, including benefits and personal health information (PHI), and more were exposed in the incident.

The personal information released includes:

• Names

• Social Security Numbers

• Bank account information

• Date of birth

• Direct deposit forms

• Driver’s licenses

• Passports

• Birth certificates

• Marriage certificates

Death certificates, medical child support orders, tax withholding forms, beneficiary designation forms and applications for benefits such as retirement, severance and death benefits with related forms and documents were also exposed.

Adobe

In 2019, over 7 million Adobe Creative Cloud user records were exposed because an internal Elasticsearch database was left exposed online without password protection. The information included usernames and customer account information but not financial data or user passwords.

Other information exposed included:

• User email addresses

• Adobe member IDs

• Country of origin

• Adobe products used

• Account creation date

• Last login date

• Subscription status

• Payment status

Although the breach did not include user credentials like names, passwords or financial information, the incident still posed harm to users. Hackers using spear phishing techniques can email high-value accounts, obtain passwords, and sell them on the dark web. Any breach of customer information, no matter how small, can pose enormous risks.

Marriott

When Marriott acquired Starwood in 2016, the company inherited a compromised reservation system platform that resulted in lawsuits and reputational damage after the breach was announced in 2018. Malicious actors had direct access to Starwood’s networks and systems since 2014. The attackers maintained access to Starwood systems until the breach’s discovery and disclosure in 2018.

The malicious actors stole information on up to 500 million guests, including:

• Names

• Addresses

• Phone numbers

• Birth dates

• Email addresses

• Encrypted credit card details

• Passport numbers

• Travel histories

In 2020, Marriott announced a second breach, which affected over 5 million customer accounts and compromised addresses, birthdays, phone numbers, and loyalty card information. This third-party data leak was caused because two Marriott franchise owners had their corporate access to systems stolen. It is important to monitor any third parties who have access to your business infrastructure information, even if this is a partner organization like a franchisee. Franchisees frequently may not adhere to the same cybersecurity requirements as their parent company, exposing the entire organization to risk.

Target

In 2013, major retailer Target was hacked by cyber attackers compromising the data of over 70 million consumers. During this seminal third-party breach, one of Target's HVAC contractors was the victim of a spear-phishing attack that leaked credit card numbers, security codes, phone numbers, and full names.

The hackers accessed Target’s corporate network with stolen credentials and installed malware on Target’s POS devices. The installed malware collected sensitive customer data between November and December of 2013. The Target breach provides a clear example of how even the best-funded information security programs can easily be compromised via security exposures in third-party products and services.

Best Practices for Preventing Third-Party Security Breaches Throughout the Vendor Lifecycle

Effectively managing risk throughout the extended supply chain can be difficult, particularly for large organizations. However, there are several steps you can take to better understand your risk environment and mitigate the impact of potential third-party risk. Here are Prevalent’s recommendations to help mitigate the risk of a third-party data breach throughout the vendor lifecycle.

Consider Information Security During Sourcing and Selection

As your IT infrastructure becomes increasingly integrated with third and fourth parties, it is critical to consider information security during vendor sourcing and selection. When considering vendors with a high degree of profiled risk based on their access to your organization's sensitive data and systems, give precedence to those with demonstrable information security maturity. It is worth asking:

• Does the vendor work with other enterprise clients with complex information security needs?

• Does the vendor have the necessary security controls to comply with requirements that would flow down from your organization? (e.g. HIPAA, CMMC, GDPR)

• What is the vendor's information security track record? Do they have multiple publicized data breaches or compliance violations?

Consider leveraging third-party risk management software or vendor risk intelligence networks to inform your sourcing and selection process with preloaded cybersecurity risk data.

Set Clear Contractual Expectations for How Data Is Stored and Transferred

Many organizations fail to build their vendor contract management processes with vendor risk management in mind. Your organization should have clear company policies regarding when personal information, customer data, or other sensitive information can be shared with third parties. For example, you might want to consider including clear stipulations regarding when confidential information can be shared with fourth parties and beyond.

Conduct Continuous Monitoring on Third Parties with Access to Sensitive Data or Systems

Vendors should be monitored for unauthorized access to personal data or other proprietary information. Even if the vendor isn’t acting maliciously, their IT systems could have been compromised resulting in malware spreading to your organization’s systems. Any vendor with any access to your IT assets should be monitored for the duration of access.

In addition, you should practice proactive, external third-party monitoring for all vendors that deal with your confidential information. Organizations change their information security programs over time, and what was originally reported on their vendor risk assessment questionnaire may not hold true a few months later. Additionally, a proactive monitoring approach can help you to catch potential data breaches before they happen. By monitoring the dark web, pastebin and other areas where stolen credentials are posted, you can learn if one of your vendors has been compromised.

Pay Attention to Regulatory Requirements

Information security and data privacy regulations have been ramped up dramatically in the past decade. We’ve seen the introduction of GDPR, CCPA, NY Shield Act, and dozens of other compliance requirements in just the past few years. It is highly likely that regulatory scrutiny will continue to mount as new third-party breaches emerge.

Require Vendors to Independently Verify Their Information Security Practices

Third-party risk assessment questionnaires can be enormously helpful in determining whether vendors are taking appropriate information security measures. However, in some cases, you may want to consider requiring potential vendors to become certified against an information security standard. For example, the Department of Defense recently propagated the Cybersecurity Maturity Model Certification. This regulation required contractors working with the Department of Defense to be certified against a 5-tier standard set by DOD determined by the type of information the contractor is working with.

Your organization can take a similar approach in dealing with vendor cybersecurity concerns. For many vendors, particularly those not dealing with large amounts of confidential data, a simple vendor risk assessment questionnaire might suffice. However, for vendors that need access to proprietary data and systems, you might want to consider requiring compliance against an outside standard such as SOC 2 or NIST CSF.

Get Visibility Into the Extended Supply Chain

The first step of any cybersecurity program is to get visibility into IT assets. The same is true for third-party risk. You need to understand not only which third parties are used across the extended enterprise, but also who makes up their supply chains down to fourth and Nth party vendors. As a rule, the more critical the vendor is or the more data they have access to, the more visibility you need into their extended supply chains. The Kaseya and SolarWinds attacks are illustrative examples of how the security practices of fourth parties can have ripple effects throughout the supply chain.

Audit Your Offboarding Process

Effective vendor offboarding is one of the most essential elements of a third-party risk management program and is essential to preventing third-party data breaches. Most organizations have some form of an offboarding process for third parties and contractors, but in a busy corporate environment, it can be overlooked. Make an effort to routinely audit offboarding processes across multiple departments for third-party vendors. Ensure that permissions and access are fully revoked across departments to comply with corporate policy and government regulations.

Next Steps for Preventing Third-Party Data Breaches

Wondering how prepared your organization is for a third-party data breach? Get started with our 10-question risk calculator. For a custom benchmarking report on your third-party risk management program, request a free TPRM maturity assessment and consulting session. Interested in how Prevalent can help? Read more about our third-party risk management platform and vendor risk assessment services, or request a demo.