Sears Holding Corp. and Delta Airlines disclosed major data breaches this week that — like a security incident involving several US gas pipeline companies just days ago — highlight the risk that businesses face from the growing ecosystem of third parties connected to their networks.
Sears on Wednesday announced that credit card information belonging to about 100,000 of its customers might have been improperly accessed as the result of a data breach at 7.ai, a third-party provider of online chat and support services to dozens of major companies.
The breach affects customers who made transactions online on Sears' website between September 27, 2017, and October 12, 2017, the retailer said in a statement Wednesday.
Customers who used Sears-branded cards are not affected, and there's no evidence to suggest that any of Sears' own systems were accessed in the incident, the company said.
Delta also blamed 7.ai for exposing the names, addresses, card numbers, CVV numbers, and card expiration dates of potentially several hundred thousand customers. The breach affects anyone who manually completed a payment card purchase on any page of delta.com's desktop platform between September 26 and October 12, 2017. Customers did not have to interact with /7.ai's chat tool to become infected, the company said.
Individuals who used Delta's mobile app or its mobile website and those who used Delta Wallet to complete transactions are not affected. The malware in 7.ai's platform "could only collect the information shown on the screen, so credit card information automatically populated by Delta Wallet functionality would have remained masked and not useable," the company said.
7.ai itself has revealed no details about the incident beyond saying it began on September 27 and was contained on October 12, 2017.
Delta and Sears are the second set of companies to report a third-party-related security issue this week. Earlier, a breach at EDI services provider Latitude Technologies disrupted business communication services at four major US pipeline companies, prompting fears of broad vulnerabilities in the energy sector.
The incidents are symptomatic of the heightening risks organizations face from third parties providing various business services, says Stephen Boyer, CTO and co-founder of BitSight. With many companies essentially becoming a combination of outsourced services, risks from insecure third parties have grown significantly in recent years, he says.
He estimates that between 60% and 70% of all breaches currently result from third-party security failures. The trend is the result of organizations not properly vetting the security practices of partners and outside vendors when letting them access enterprise data and services, he says.
When the European Union's General Data Protection Regulation goes into effect next month, organizations such as Delta and Sears will bear much greater direct responsibility for such breaches, Boyer notes. The mandate requires data controllers — or the data owners — to include specific requirements pertaining to data security in all contractual agreements with third-party processors.
"There is no question that third-party breaches are increasing," says Fred Kneip, CEO of CyberGRX. He points to a recent survey from the Ponemon Institute, which found that 56% of companies have experienced a breach caused by an outside vendor — a 7% increase over the past year.
"The reason for this is pretty simple. Digital ecosystems are expanding and getting more complex. Turning to third parties to provide services is the way that business is done today," he says. While strategic outsourcing can free up organizations to focus on their core business, there's often a real trade-off when it comes to security, Kneip says.
"With expanding ecosystems comes an exponentially larger attack surface," he says. At large enterprises, the number of vendors, partners and customers with access to the network can easily number in the thousands. All that attackers need is to find a single exploitable vulnerability in those trusted connections to gain access.
"The Sears and Delta breaches illustrate how intertwined our ecosystems are. If our attack surfaces are connected, our mitigation strategy should be too, and that means we need to start collaborating with each other more," Kneip says.
Every organization is under cost pressure in their business, and outsourcing technology or services is a primary means of reducing cost, adds Tim Erlin, VP of product management and strategy at Tripwire. The adoption of cloud providers in recent years is an example of third-party outsourcing, and one of the ways a third party can be involved in an incident, he says.
"Organizations should look for ways to ensure that third-party suppliers are deploying and validating critical security controls," Erlin says. "Ideally, this validation would occur through an audit function, but many organizations use contracts and surveys to assess their suppliers."
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