Russ Harvey Consulting - Computer and Internet Services

Data Breaches

A failure to protect

Personal Data Revealed | Equifax Data Breach
Were You Affected? | Accountability?

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Photo of a man's face looking towards you with numbers in the background representing the data he seeks.
Everyday we hear about another undisclosed data breach. Private information being collected, sometimes sold, and given away without our knowledge or consent.

 

CEOs sit before Congress saying they will "do better" while stories continue to break about negligence and wrong-doing.
— Mozilla 2019
A new report from Mastercard shows that the average data breach costs Canadian businesses $5.64 million while only 39 per cent of businesses are implementing adequate cybersecurity tools.

 

According to the report, cybercrime has increased by 600 per cent since COVID-19 pandemic with remote work resulting in a 238 per cent rise in cyberattacks.
— CTV News March 2023

Hacks and Security Breaches

While organizations are happy to collect your private data, they aren't committed to protecting it anywhere as carefully as they do their own private information.

Until companies are forced to take responsibility or face significant business-damaging fines, they will continue to find it cheaper to hire lawyers than invest in better security.

Legislated is badly needed to protect personal data that includes significant mandated payouts to those affected and severely penalizes the executives and companies affected by data breaches.

Data breaches occur because of a failure to protect your data.

Instead, much of this data is protected only with the least effective (and least expensive) technology and some companies leave the information unprotected and available to anyone that can locate the server it is stored on.

Corporations have essentially zero incentive to provide security for any private data they hold. Given the amount of data collected by these companies, this is criminal.

The Equifax data breach allowed executives to protect their own financial interests while providing the least effective security for data affecting virtually every adult in North America yet failed to offer adequate compensation.

Data Breaches Take Months or Longer to be Discovered

One of the biggest problems is that those responsible for the data are often unaware that a data breach has occurred until they are told by someone else, often months or longer later.

The time it takes cybercriminals to compromise a system is often just a matter of minutes — or even seconds. They don't need much time to extract valuable data — they usually have much more than they need as it typically takes organizations weeks or months to discover a breach.

 

68% of breaches took months or longer to discover.

 

In many cases, it's not even the organization itself that spots the breach — it's often a third party, like law enforcement or a partner. Worst of all, many breaches are spotted by customers
— 2018 Verizon Data Breach Investigations Report

This obviously makes it very difficult for consumers and businesses to protect themselves in a timely manner by changing passwords and other compromised data. However, there are things you can do to prevent data breaches.

More Common Than You Think

Data breaches are more common than you'd think, given the infrequency of news reports. How often?

How often? “Every day. Multiple times. Every day, without question.” Many of these are never reported to anyone.

A new study looking into data breaches in 2019 found that on average, a US citizen had their personal information leaked to the public at least four times. This is only based on publicly reported data and leaves out hundreds of other breaches that may have occurred behind closed doors.
— TechRepublic
Among organizations that experienced a data breach, over half informed senior leadership (53 per cent), and just under half informed the board (46 per cent) or their customers (45 per cent). About four in 10 informed a regulatory body (42 per cent) or law enforcement (38 per cent).
— CIRA 2024

Only the very largest breaches are reported in media and then often months or years after they happen.

Data breaches now happen so often that they rarely make the regular news cycle, but that doesn't make them any less dangerous.

 

A data breach gives cybercriminals the chance to uncover your private information and use it for nefarious purposes, such as identity theft.
— PCMag

The LastPass Breach

A good example of poor and too-late reporting is the LastPass breach.

It took over six months from the time of the first incident to begin reporting risks to customers.

Customer data wasn't reported missing until December 22, 2022 even though it appears to have been taken months earlier beginning in August.

Initially customers were told their data vaults were probably safe, based upon the highest recommendations. However, the company had failed to warned customers with weak security to upgrade.

TL;DR: The breach was helped by a lax security policy, an employee was accessing critical company data from their home computer.

 

So the breach affects LastPass users who had an active LastPass account between August 20 and September 16, 2022.
— Almost Secure

Remember, LastPass was password management software protecting customers' most critical data — credit cards and the passwords to ALL their online accounts including critical banking and government websites.

Breaches Go Back Years

Breached companies seldom report the loss until much later (often years later) and are not financially responsible because of their vague terms of service and poor privacy policies.

You only need to look at the way Facebook, Hotmail and others so quickly changed their privacy policies to enhance their profitability. You're on your own when it comes to protecting your identity.

Online Crime Treated Like White Collar Crime

Much like white-collar criminals, online criminals face far lighter repercussions (if they are caught at all) than someone robbing a store or kidnapping for ransom.

As cybercrime begins to overtake physical offenses for the first time, we need to realize that as our world continues to be dominated by technology so is organized crime. There is a common misconception that these out of sight online attacks are victimless crimes or are not treated with the same level of importance as those that occur offline, and this needs to change.
— Daniel Burrus

In addition, most of these crimes are committed abroad where it is much more difficult to prosecute the perpetrators.

White Collar Crime Punished Lightly

One of the reasons that the loss of personal information occurs is that companies don't see any reason to spend money to protect information they didn't pay for in the first place.

No one forced these companies to carelessly collect that information nor retain it.

Until such crimes see the company executives punished appropriately and as severely as bank robberies and other blue-collar financial crimes, these breaches will continue.

How Many Affected Commonly Understated

Often initial breach reports understate the actual number of affected accounts. Later reports progressively report larger numbers.

As the public faces of huge corporations, executives have a lot to lose if their reputation — or that of their company — becomes tarnished. Their public relations team and their company's board may feel that paying off the criminal gangs could be less expensive than damaging the company's brand or causing a drop in stock value after announcing their business has become a victim to a serious cyberattack.

 

So while some companies and individuals will try to cover up that they have been scammed, the truth can and often does come out.
— ZoneAlarm blog

One example is the Yahoo breach which initially reported 500 million accounts were breached in 2013. We later learned that all 3 billion Yahoo accounts were affected including Yahoo Mail, Tumblr, Flickr and Fantasy Football.

The Motive: Financial Gain and Espionage

The primary purpose of hacking these sites is financial gain, although other factors such as espionage are likely factors.

Cyber criminals have placed 617 million hacked accounts for sale on the dark web, stemming from 16 separate data breaches.
— Independent

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Breaches Expose Personal Data

Each time there is a data breach containing your information, it has the potential to reveal a pattern in your password use. In the very least it provides the personal information that was used to create and maintain your account.

Most large companies now make at least some of their income by collecting and analyzing personal data from people on social media, websites and more.

Companies like Facebook and Google are based entirely on collecting and reselling data to advertisers.

When the product is free, YOU are the product.

Companies seldom provide decent protection for collected information because they paid virtually nothing for it and the consequences of a data breach seldom affect their bottom line.

Neither Facebook nor Clearview AI suffered significant fines for their part in the scraping of millions of photos on Facebook accounts without permission in order to sell the data to police forces in North America, yet ordinary citizens can face huge fines when caught posting images not owned by them.

One of the best security and privacy actions you can make is to get off Facebook.

There have been at least 200 documented data breaches since 2005, and the number of records exposed is only on the rise as more folks move their lives online. It's impossible to know the impact and extent to which data breaches are occurring as many almost certainly go unreported.
— Interest.com 2019

Each year the number and severity of data breaches, compromised accounts is becoming increasingly frequent and more severe.

Example Privacy Breaches

Marriott International and its subsidiary Starwood Hotels will pay $52 million and create a comprehensive information security program as part of settlements for data breaches that impacted over 344 million customers.

 

The settlement requires Marriott and Starwood to implement a comprehensive security program and allow their U.S. customers to request personal data deletions.

 

Additionally, the American hospitality giant has agreed to pay $52,000,000 to 49 states to resolve claims related to the data breaches.
— BleepingComputer October 10, 2024
Fidelity Investments, a Boston-based multinational financial services company, disclosed that the personal information of over 77,000 customers was exposed after its systems were breached in August.

 

Fidelity added that the incident exposed the data of 77,099 customers but has yet to reveal what personal information was stolen in the data breach besides names and other personal identifiers (as shared with Maine's Attorney General).

 

When asked how the attacker could access the data of thousands of customers using two accounts they previously created, Michael Aalto, Fidelity's head of external corporate comms, told BleepingComputer they couldn't share that information and added that "they did not view accounts. They viewed customer information".
— BleepingComputer October 10, 2024
This is unprecedented: almost half of all people in Canada had their sensitive, personal information from a medical testing company hacked and stolen. And it took over 6 weeks for the public to be informed.
— OpenMedia

See if you're affected then sign the OpenMedia petition for action.

Be sure to read the resource links at the bottom of the OpenMedia petition to understand the scope of the problem and why action must be taken to stop this loss of personal data.

Over 75% of Canadians Affected

In the first year that reports are mandatory under PIPEDA ending October 31, 2019, the OPC received 680 breach reports affecting more than 28 million Canadians, six times as many as the year before:

Type of incident Total breach reports
Accidental Disclosure 147
Loss 82
Theft 54
Unauthorized Access 397
Grand Total 680

Clearly breaches experienced by private businesses have been greatly undereported.

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Equifax Data Breach

Probably the most glaring of the many reported (and unreported) data breaches is the 2017 Equifax data breach.

Richard F. Smith, former Equifax CEO, blamed it on an employee's error in not patching a known security vulnerability.

Many Affected

The data stolen provided more than enough information to commit widespread identity theft on the majority of American and Canadian citizens.

Inadequate Security

Even though this data was particularly sensitive, Equifax provided little data security.

A company like Equifax that has sensitive, personal information on most Americans should have the best data security in the industry. Instead, it has the worst.
— Senator Elizabeth Warren
Errors were at the heart of almost one in five (17%) breaches. That included employees failing to shred confidential information, sending an email to the wrong person or misconfiguring web servers. While none of these were deliberately ill-intentioned, they could all still prove costly.
— 2018 Verizon Data Breach Investigations Report

Executives Cashed Out

There was also a delay in reporting the Equifax breach while the company executives cashed out.

The lack of quick action by the company's executives should have resulted in firings and severe financial penalties for the company.

Consumers Unprotected

If you checked the Equifax site to check if your personal identity was compromised, you agreed to give up the right to sue. Seriously?

Settlement Inadequate

Equifax settled the FTC lawsuit by agreeing to provide either 10 years of credit monitoring or $125 settlement but never provided enough funds for this settlement:

Equifax earmarked only $31 million for claims, meaning that if all 147 million people affected by the breach filed a claim, everyone would get just 21 cents.
— The New York Times

Where Did Data Go?

For quite some time there was a mystery of what happened to the data because it didn't show up on the dark web like such breaches usually do.

The Great Equifax Mystery

The theory that a foreign government was behind the attack was the most logical conclusion.

The great Equifax mystery: 17 months later, the stolen data has never been found….

 

Most experts familiar with the case now believe that the thieves were working for a foreign government and are using the information not for financial gain, but to try to identify and recruit spies.
— Kate Fazzini, CNBC

In February 2020, it was revealed that four Chinese officers of the People's Liberation Army…were responsible for carrying out the largest theft of sensitive personal information by state-sponsored hackers ever recorded.

Weird Online Data Dump

An open (not password protected) 4 terabytes of data from the People Data Labs (PDL) and OxyData.io (OXY) contained cross-linked information on over 1.2 billion people was found on October 16, 2019. PDL and OXY are data enrichment companies. What they do is allow companies to search:

De-duplicating the nearly 3 billion PDL user records revealed roughly 1.2 billion unique people, and 650 million unique email addresses, which is in-line with the statistics provided on their website. The data within the three different PDL indexes also varied slightly, some focusing on scraped LinkedIN information, email addresses and phone numbers, while other indexes provided information on individual social media profiles such as a person's Facebook, Twitter, and Github URLs.
— Check Point blog

It is interesting that the data is an accurate copy of data obtained from 2 different companies blended into one database. Someone either was a very large customer of both companies or managed to hack both databases.

Why was it available on an open IP address (35.199.58.125) rather than hidden away?

Who's Accountable?

Someone should be held accountable for both scraping (collecting) such data then combining it for profit as well as allowing it to be copied into an unprotected cloud account unnoticed.

If both companies (and the company officers) were bankrupted for this breach, perhaps the tracking of such sensitive data would be less attractive and companies would spend money securing customer data as carefully as confidential company data.

TransUnion Data Breach

TransUnion's 2019 data breach affected 37,000 Canadians.

The personal information of about 37,000 Canadians held by TransUnion may have been compromised this past summer, leaving both of Canada's credit monitoring agencies with data blemishes on their record. TransUnion says someone fraudulently accessed data using a customer's login credentials.
— CBC

It is disconcerting that those protecting businesses from fraud are so lax in their security. One reason is that TransUnion and Equifax serve businesses, not consumers.

NCIX Computers

Following the bankruptcy of computer retailer NCIX in Vancouver their computers were never wiped to remove customer data before they were sold.

This personal information included IP, home and email addresses, passwords, credit card information and social insurance numbers.

Not only did the company fail to ensure that the computers containing customer information were wiped, but that data was so poorly encrypted that the information was sold on Craigslist.

Whoever is responsible for the careless disposal of the company assets is to blame. Bankruptcy protection should not remove liability for those responsible for not securing that information, including the former officers of that company.

Timely Reporting Lacking

The number, frequency and size of security breaches are not improving. Companies are protecting their servers, not their users' information.

Often companies don't even realize they've been hacked until long after the data has made its way into the dark web.

68% of breaches take months or longer to detect.
— Menlo Security

The history of data breaches includes some of the largest and most damaging on record as well as how to prevent data breaches.

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Have You Been Hacked?

It is important for you to learn as soon as possible about any data breaches that may affect you.

Unfortunately, not all breaches make it into the news nor do all companies report breaches to those directly affected.

Search These Databases

These sites not only list many of the largest breaches, but can search databases to see if you've been affected:

If You've Been Affected

Do you have an account that has been compromised in a data breach?

If so, change passwords for those accounts (and any others using the same user names and/or password). Today, most accounts use your email address to log into accounts, so a unique password for every account is critical.

Stop Reusing Passwords

Reusing passwords can mean that multiple accounts have been hacked since the breach.

Using the same easy-to-remember password everywhere is a great way to put your accounts at risk. You should care about your data showing up in a data breach because bad actors could use this information to take over your sensitive accounts or even steal your identity.
— PCMag

Learn more about safe password practices.

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Where is the Accountability?

Would you simply shrug your shoulders if your bank “lost” your life savings because of lax security? Why should mass data breaches be any different?

Many of these companies either are unaware that the breach took place (indicating technical incompetence) or have opted not to report the breach to those affected (essentially fraud).

Insufficient security resources to protect the information in their care should not be an accounting decision.

Clearly, company executives have no skin in the game. They should be personally liable with their personal assets on the line.

Privacy should start with our government representatives. It is shocking that our federal parties totally ignore privacy laws and that our governments not only spy on us but share that information widely both internally and internationally.

What Companies Can Do to Minimize Data Breaches

The best advice comes from the 2018 Verizon Data Breach Investigations Report:

Be vigilant

Don't wait to find out about a breach from law enforcement or a customer. Log files and change management systems can give you early warning of a security compromise.

Make people your first line of defense

Do your employees understand how important cybersecurity is to your brand, and your bottom line? Get them on board, and teach them how to spot the signs of an attack and how to react.

Only keep data on a need-to-know basis

Do you know who can see your sensitive data and systems? Limit access to the people who need it to do their jobs, and have processes in place to revoke it when they change roles.

Patch promptly

Cybercriminals are still successfully exploiting known vulnerabilities. You can guard against many threats simply by keeping your anti-virus software up to date.

Encrypt sensitive data

Do what you may, one day you're likely to be the victim of a breach. But by encrypting your data you can render it useless if it is stolen.

Use two-factor authentication

Phishing campaigns are still hugely effective. And employees make mistakes. Two-factor authentication can limit the damage that can be done if credentials are lost or stolen.

Don't forget physical security

Not all data theft happens online. Surveillance cameras and entry systems for restricted areas, for example, can help avoid criminals tampering with systems or stealing sensitive material.

Buying Power Influence

Consumers need to assess privacy in their purchase decisions. This hits business where it hurts.

First, as consumers we need to stop shrugging and accepting data leaks as business as usual. Security should influence our buying decisions: the organisations we deal with won't take security seriously unless customers and the public do, too.
— ZDNET.

Business Responsibilities

Canada's businesses and employees need to understand that ignoring the problem is not acceptable and that the consequences for businesses and employees involved could be significant. Failure to report a breach is fraud.

Employee Snooping is Fraud

Employee snooping, whether malicious or simple curiosity, needs to be stopped. A “need to know” should be a first line of defense backed by severe penalties for failure to protect privacy.

Not only should personal data be protected by excellent security, but there should be a tracking system that records who accessed the data and when.

Businesses should be responsible for their employees. Training in security, accountability and ethics as a condition of employment is the least of those responsibilities.

Responding to Privacy Breaches

Responding to such shocking numbers is important. Canada's privacy laws are over 35 years old and greatly out of date, especially compared with other countries.

Existing laws pre-date the Internet, cell phones, social media not to mention wide-spread surveillance and data collection.

Unfortunately the current Liberal government took the road of further compromising personal privacy in their recent attempts to address privacy in the 21st century with Bill C-11:

We were told that Bill C-11 would introduce huge fines for privacy violations. We put it to the test and it completely fails.

A large number of breach incidents were the result of individual phishing attacks or phone scams which means that public education needs to be stepped up.

We need to look at how technology can be used to catch criminals or remove their access to Canadian phones and email accounts.

If companies faced massive fines for failing to protect the data they collect “just in case” its useful, they would be far less likely to collect it as well as secure what they collected more effectively.

While Bill C-11 was supposed to provide these sorts of fines, it needs revision if it is to succeed.

Our government boasted about imposing some of the highest fines for privacy violations in the world.

 

Now we know these fines won't apply to many of Canada's most high profile and egregious privacy incidents over the last few years.
— OpenMedia

Failure to Report Privacy Breaches

Canadian businesses and organizations are legally required to report privacy breaches. Hoping it goes away could cost you both customer loyalty and significant fines.

Legislation is Probably Required

These large numbers indicate that most individuals in Canada have already been affected. We need to stop unsafe practices and start treating ignorance as a public menace.

Too often we try to tell folks how to protect themselves, but how to you protect yourself from credit card and other information stolen from retailers other than by strictly using cash and refusing any personal details such as requests to “email your receipt.”

A printed receipt with your transaction avoids providing personal information that provides little return value to yourself compared to the future marketing value of your email address to the retailer.

Corporations must be held legally and financially accountable for security breaches that affect customers. There need to be fines, investigations, and court-ordered consequences. Money needs to be spent on lawyers — a lot of money. The current model where customers have to spend their own money and energy to bring lawsuits to bear is unreasonable.
— PCMag

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RussHarvey.bc.ca/resources/databreaches.html
Updated: October 10, 2024

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