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Data Breaches: The Complete WIRED Guide


Another week, another massive new corporate security breach that exposes your personal data. Names,email addresses, passwords, Social Security numbers, dates of birth, credit card numbers, banking data, passport numbers, phone numbers, home addresses, driver’s license numbers, medical records―they all get swept up by shadowy, amorphous hackers for fraud, identity theft, and worse. Sometimes the affected company will send you an email suggesting that you change a password or credit card number, but for the most part, these incidents are invisible―until they aren’t.

Think of data breaches as coming in two flavors: breaches of institutions that people choose to entrust with their data―like retailers and banks―and breaches of entities that acquired user data secondarily―like credit bureaus and marketing firms. Unfortunately, you can’t keep your information perfectly safe: It is often impossible to avoid sharing data, especially with organizations like governments and health insurers. Furthermore, in cases where a company or institution gives your information to an additional party, you’ve often agreed to sharing more data than you realize by clicking "I accept" on a dense user agreement.

Many of these incidents don’t necessarily even involve hackers. Data “exposures” occur when information that should have been locked down was accessible, but it’s unclear if anyone actually stole it.

Even after a data breach has occurred, though, and an unauthorized actor definitely has your data, you won’t necessarily see an immediate negative impact. Hackers who steal a trove of login credentials, for example, may quietly use them for under-the-radar crime sprees instead of selling or publishing the data. As a result, the repercussions of a breach can be very delayed, sometimes not fully manifesting for years.

Attackers tend to capitalize on certain types of data right away, namely financial information like credit card numbers. But some troves of data disappear into the ether, becoming a sort of ticking time bomb. Yet victims of identity theft know the consequences of data breaches intimately and painfully. They may have their credit wrecked by thieves, lose all their money, or be dogged for years by a shadow hand meddling in their affairs and opening digital accounts in their name.

The problem is so abstract and far-reaching that you would be forgiven for feeling that it’s not worth grappling with at all. Unfortunately for victims, there is no such thing as perfect security, and no way to eliminate absolutely all data breaches. But massive institutional breaches don’t need to happen as often as they do. Many occur not because of complex and sophisticated hacking but because organizations have made basic and potentially avoidable mistakes in implementing their security schemes. They’re low-hanging fruit for hackers to pluck.

Yes, it’s a difficult, never-ending process for a large organization to secure its inevitably sprawling networks, but for decades many institutions just haven’t really tried. They’ve gone through some of the motions without actually making digital security a spending priority. Over thepast 10 years, however, as corporate and government data breaches have ramped up―impacting the data of billions of people―institutional leaders and the general public alike have finally begun to understand the urgency and necessity of putting security first. This increased focus is beginning to translate into some concrete data protections and security improvements. But collective inaction for decades has created a security deficit that will take significant time and money to make up. And the reality that robust digital security requires never-ending investment is difficult for institutions to accept.

The History of Data Breaches

Data breaches have been increasingly common and harmful for decades. A few stand out, though, as instructive examples of how breaches have evolved, how attackers are able to orchestrate these attacks, what can be stolen, and what happens to data once a breach has occurred.

Digital data breaches started long before widespread use of the internet, yet they were similar in many respects to the leaks we see today. One early landmark incident occurred in 1984, when the credit reporting agency TRW Information Systems (now Experian) realized that one of its database files had been breached. The trove was protected by a numeric passcode that someone lifted from an administrative note at a Sears store and posted on an “electronic bulletin board”―a sort of rudimentary Google Doc that people could access and alter using their landline phone connection. From there, anyone who knew how to view the bulletin board could have used the password to access the data stored in the TRW file: personal data and credit histories of 90 million Americans. The password was exposed for a month. At the time, TRW said that it changed the database password as soon as it found out about the situation. Though the incident is dwarfed by last year’s breach of the credit reporting agency Equifax (discussed below), the TRW lapse was a warning to data firms everywhere―one that many clearly didn’t heed.

Large-scale breaches like the TRW incident occurred sporadically as years went by and the internet expanded. By the early 2010s, as mobile devices and the Internet of Things greatly expanded interconnectivity, the problem of data breaches became especially urgent. Stealing username/password pairs or credit card numbers―even breaching a trove of data aggregated from already public sources―could give attackers the keys to someone’s entire online life. And certain breaches in particular helped fuel a growing dark web economy of stolen user data.

What Counts as a Data Breach?

A data breach occurs any time an entity accesses information it wasn’t meant to. If someone inconspicuously looks over your shoulder at your smartphone and reads what you’re typing, that’s a data breach. If someone a block away uses binoculars to look through your window and see what you’re watching on TV, that’s a data breach as well. You may not think it matters if someone knows you like The Good Place , but if it isn’t your intent for people to see what you’re watching, it’s a violation of your expectations.

One of these incidents was a breach of LinkedIn in 2012 thatinitially seemed to expose 6.5 million passwords. The data was hashed, or cryptographically scrambled, as a protection to make it unintelligible and therefore difficult to reuse, but hackers quickly started “cracking” the hashes to expose LinkedIn users’ actual passwords. Though LinkedIn itself took precautions to reset impacted account passwords, attackers still got plenty of mileage out of them by finding other accounts around the web where users had reused the same password. That all too commonlax password hygiene means a single breach can haunt users for years.

And What Counts as Exposure?

Think of an exposure as putting that same window at street level. Anyone walking by could see what’s on your TV. Whether they actually do doesn’t matter―the risk is there. When sensitive data like medical records or banking information gets exposed, the stakes are high.

The LinkedIn hack also turned out to be even worse than it first appeared. In 2016 a hacker known as “Peace”started selling account information, particularly email addresses and passwords, from 117 million LinkedIn users. Data stolen from the LinkedIn breach has been repurposed and re-sold by criminals ever since, and attackers still have some success exploiting the data to this day, since so many people reuse the same passwords across numerous accounts for years.

Then What?

A common reassurance after a data exposure is that there is no evidence the data was stolen. To a degree, it is possible to review access logs and other system indicators to determine this, but generally organizations have no way of knowing for certain what went on while they weren’t watching. This is what makes data exposures such a big problem, whether it’s through your window or via a database that a company left accessible online: It’s always possible that someone realized they could peek in and exfiltrated some information without anyone realizing.

Data breaches didn’t truly become dinner table fodder, though, until the end of 2013 and 2014, when major retailers Target, Neiman Marcus, and Home Depot suffered massive breaches one after the other. TheTarget hack, first publicly disclosed in December 2013, impacted the personal information (like names, addresses, phone numbers, and email addresses) of 70 million Americans and compromised 40 million credit card numbers. Just a few weeks later, in January 2014, Neiman Marcus admitted that its point-of-sale systems had been hit by the same malware that infected Target, exposing the information of about 110 million Neiman Marcus customers, along with 1.1 million credit and debit card numbers. Then, after months of fallout from those two breaches, Home Depot announced in September 2014 that hackers had stolen 56 million credit and debit card numbers from its systems byinstalling malware on the company’s payment terminals.

An even more devastating and sinister attack was taking place at the same time, though. The Office of Personnel Management is the administrative and HR department for US government employees. The department manages security clearances, conducts background checks, and keeps records on every past and present federal employee. If you want to know what’s going on inside the US government, this is the department to hack . So China did.

Hackers linked to the Chinese government infiltrated OPM’s network twice , first stealing the technical blueprints for the network in 2013, then initiating a second attack shortly thereafter in which they gained control of the administrative server that managed the authentication for all other server logins. In other words, by the time OPM fully realized what had happened and acted to remove the intruders in 2015, the hackers had been able to steal tens of millions of detailed records about every aspect of federal employees’ lives, including 21.5 million Social Security numbers and 5.6 million fingerprint records . In some cases, victims weren’t even federal employees, but were simply connected in some way to government workers who had undergone background checks. (Those checks include all sorts of extremely specific information, like maps of a subject’s family, friends, associates, and children.)

Pilfered OPM data never circulated online or showed up on the black market, likely because it was stolen for its intelligence value rather than its street value. Reports indicated that Chinese operatives may have used the information to supplement a database cataloging US citizens and government activity.

Today, data breaches are so common that the cybersecurity industry even has a phrase―“breach fatigue”―to describe the indifference that can come from such an overwhelming and seemingly hopeless string of events. And while tech companies, not to mention regulators, are starting to take data protection more seriously, the industry has yet to turn the corner. In fact, some of the most disheartening breaches yet have been disclosed in the last couple of years.

Yahoo lodged repeated contenders for the distinction of all-time biggest data breach when it made an extraordinary series of announcements beginning in September 2016. First, the company disclosed that anintrusion in 2014 compromised personal information from 500 million user accounts. Then, two months later, Yahoo added that it had suffered a separate breach inAugust 2013 that exposed a billion accounts. Sounds like a pretty unassailable lead in the race to the data-breach bottom, right? And yet! In October 2017, the company said that after further investigation it was revising its estimate of 1 billion accounts to 3 billion―or every Yahoo account that existed in August 2013.

There are few companies that even have billions of user accounts to lose, but there are still other ways for a breach to be worse than the Yahoo debacles. For example, the credit monitoring firm Equifax disclosed amassive breach at the beginning of September, which exposed personal information for 147.9 million people. The data included birth dates, addresses, some driver's license numbers, about 209,000 credit card numbers, and Social Security numbers―meaning that almost half the US population potentially had their crucial secret identifier exposed . Because the information stolen from Equifax was so sensitive, it's widely considered the worst corporate data breach ever. At least for now.

Equifax also completely mishandled its public disclosure and response in the aftermath. The site the company set up for victims was itself vulnerable to attack, and it asked for the last six digits of people's Social Security numbers to check if their data had been impacted by the breach. This meant that Equifax was asking Americans to trust them with their data all over again. Equifax also made the breach-response page a stand-alone site, rather than part of its main corporate domain―a decision that invited imposter sites and aggressive phishing attempts. The official Equifax Twitter account even mistakenly tweeted the same phishing link four times. Four. Luckily, in that case, it was just a proof-of-concept research page and not an actual malicious site.

There have since beennumerous indications that Equifax had a dangerously lax security culture and lack of response procedures in place. Former Equifax CEO Richard Smith told Congress in October 2017 that he usually only met with security and IT representatives once a quarter to review the company's security posture. And hackers got into Equifax's systems for the breach through a known web framework vulnerability for which a patch had been available for months. A digital platform used by Equifax employees in Argentina was even protected by the ultra-guessable credentials "admin, admin"―a truly rookie mistake.

If any good came from the Equifax breach, it was that the sheer severity may have served as the wake-up call corporate American needed. On the other hand, a year after that breach, the frequency of successful attacks doesn’t seem to have abated. And the eeriest thing about the Equifax breach? The data still hasn’t surfaced. Data aggregators like Equifax, who pull in an enormous amount of public and private information from myriad sources, have become a single point of failure of the digital age. More and more often, attackers target data analytics companies as a one-stop-shop for valuable information. But hackers still have their sights set on the true industry giants as well―if they can find a way in. Just weeks ago, Facebook disclosed its first-ever true data breach , in which attackers gained access to 30 million user authorization tokens. This meant that the hackers could access users’ Facebook accounts and exfiltrate a significant portion of their personal data. Facebook is investigating the incident with the FBI and has not yet said who was behind it or what their goals were in launching the attack.

And the security breach train rolls on. Within a few days of each other this month, Marriott and Quora both announced large breaches impacting more than 100 million users. InMarriott’s case, the intrusion occurred in the Starwoods Preferred Guest system and persisted for four years. Marriott acquired Starwoods in September 2016, two years after attackers would have first infiltrated, but it then persisted for two more years on Marriott’s watch. The breach exposed various combinations of personal details, including hundreds of millions of passport numbers, from as many as 500 million customers overall, making it one of the three largest known breaches to date.

The Future of Data Breaches

Attackers are able to perpetrate most current data breaches relatively easily by exploiting an institution’s basic security oversights―that’s what happened with Home Depot, OPM, and Equifax. If businesses and other institutions learned from these organizations’ mistakes, there could be a real reduction in the number of data breaches that occur overall. But improvement doesn’t come from making breaches impossible. The best improvements come from accepting the possibility of breach and significantly raising the barrier to entry or the resources required to carry one off. This would deter many would-be attackers, because unskilled hackers (or those who are simply idly poking around) wouldn’t be able to find as many blatant vulnerabilities to easily exploit.

An important concept in security, though, is the idea of the cat and mouse game. For determined, motivated, and well-resourced attackers, improved defenses spur malicious innovation. This is why security is an endless expense that institutions try to minimize, cap, or avoid altogether―defenders need to think of everything, while attackers only need to find one small mistake. An unpatched web server or an employee clicking a malicious link in a phishing email can be all it takes.

That’s also why some of the most groundbreaking examples of next-generation hacking come from targeted attacks to surveil high-profile individuals and groups―often political candidates, dissidents, activists, or spies attempting to infiltrate each others’ organizations. Hackers working to carry out these types of high-priority attacks will develop or pay large sums of money for so-called zero-day exploits. These consist of two parts: information about an undisclosed vulnerability in a system, and software that is programmed to take advantage of that flaw to give some type of increased system access or control to whoever deploys the exploit. A software developer can’t defend a vulnerability they don’t know about, so zero-day exploits push the limits of what’s possible for attackers by giving them a secret path into a network or database.

What Should Institutions Do? Lock It Down

Require users to set up strong, unique passwords and two-factor authentication to access network services.

Keep 'Em Out

Implement access controls so everyone can’t access everything. Users should only be able to see the content and applications they need.

Slice It Up

Segment enterprise networks so that sensitive data and operations run in different digital areas and aren’t accessible from parts of the network that are low-sensitivity.

Update It Quick

Apply software updates as soon as they’re available. For real.

More attackers may be forced to use zero-day exploits to carry out future breaches―increasing the resources required―if businesses, governments, and other institutions succeed in substantially improving their baseline cybersecurity postures through initiatives like consistent patching and network access control. But for now, enough easy targets remain that attackers don’t need to work very hard or spend a lot of money to perpetrate massive data breaches. Even just using publicly available internet scanning tools can reveal unprotected devices and databases where valuable information is tantalizing exposed.

Until that changes, US citizens and permanent residents would have more protection against fraud and identity theft if the US government would replaceSocial Security numbers. These strings of digits were never meant to act as universal identifiers, much less as secure authenticators, and it is impossible for people to keep a set of digits secret when they are also being asked to share the number repeatedly throughout their lives. Instead, the US government should offer (as other countries do) a purpose-built universal identity scheme that incorporates numerous, diverse authenticators. That way, even if hackers compromise one piece of information, people can still regain control of their identities.

Ideally, companies and other institutions that hold data would commit to invest forever in rigorously locking their systems down. But organizations always vacillate between factoring in cost, ease of use, and risk. There’s no easy way to reconcile the three. And even if there were, no security scheme is ever perfect. The best way to minimize the impact of a mega-breach, then, is not just to reduce the number of incidents, but to better manage the inevitable fallout.

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