The stolen credentials problem is bad. Now, thanks to a team of researchers from Google, the University of California, Berkely, and the International Computer Science institute, we have a much better idea of just how bad the situation has become.

In a paper titled "Data Breaches, Phishing, or Malware? Understanding the Risks of Stolen Credentials," the research team of Kurt Thomas, Frank Li, Ali Zand, Jacob Barrett, Juri Ranieri, Luca Invernizzi, Yarik Markov, Oxana Comanescu, Vijay Eranti, Angelika Moscicki, Daniel Margolis and Elie Bursztein looked at billions of stolen credentials to understand how they were taken, how they were used, and whether the former had any impact on the latter.

Image from "Data Breaches, Phishing, or Malware? Understanding the Risks of Stolen Credentials" by Thomas, Li, et al

First, to size: Just how big is the problem? In the introduction to the paper, the team writes, "Over the course of March, 2016 – March, 2017, we identify 788,000 potential victims of keylogging; 12.4 million potential victims of phishing; and 1.9 billion usernames and passwords exposed by data breaches." They then point out that this is far from the total universe of victims -- it's simply a subset that they could easily identify. Since the earth's population is a bit over 7.5 billion, that means that the subset of victims is more than one-quarter of the world's population.

When it comes to the credentials in the research population, how the credentials came to be stolen had a profound impact on whether or not they were used in a successful breach. According to the researchers, "Using Google as a case study, we observe only 7% of victims in third-party data breaches have their current Google password exposed, compared to 12% of keylogger victims and 25% of phishing victims."

Now, the critical question is just how much more likely that makes an individual account to be compromised if the credentials are taken by any of these methods. And that's where the statistics reported in the paper become truly eye-opening. The paper reports, "We find victims of phishing are 400x more likely to be successfully hijacked compared to a random Google user. In comparison, this rate falls to 10x for data breach victims and roughly 40x for keylogger victims."

So for this population, falling victim to a phishing attack makes an account 400 times more likely to be compromised than the general user population. While this result is for a specific user community, it is reasonable to assume that at least the range of the difference will be similar for other user communities such as, for instance, the users of your enterprise network.

All of this works together to suggest that the most productive credential safety efforts would be those that target phishing attacks. And while there are certainly technology solutions that can aid in slowing phishing attacks, the most important defense mechanism is an educated user.

Image from "Data Breaches, Phishing, or Malware? Understanding the Risks of Stolen Credentials" by Thomas, Li, et al

The one technology reponse that the authors suggest is a move to some sort of multi-factor authentication -- something that steps beyond the classic name and password combination. They discuss the possibility of some sort of behavioral or location-based factor, though they admit that there are advanved methods for spoofing many of those.

The next factor discussed is some sort of token-based solution, whether a dedicated hardware key, a key generator on a mobile device or a passphrase sent via message to a mobile device. While effective, these, too, have practical limitations to their adoption in mnay organizations. Which brings us back to user training.

Advanced user training on recognizing and not responding to phishing attacks should be considered a crucial part of any IT security program. Another piece, related to training, should be the knowledge that users can ask the IT security group to inspect and verify any request for information that has even the slightest whiff of suspicion about it.

As the authors write in the conclusion of their report, "Our findings illustrate the global reach of the underground economy surrounding credential theft and the need to educate users about password managers and unphishable two-factor authentication as a potential solution."

What's your plan?

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— Curtis Franklin is the editor of SecurityNow.com. Follow him on Twitter @kg4gwa.