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Third-Party Data Breaches: What You Need to Know

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A third-party data breach happens when malicious actors penetrate a vendor, supplier, contractor, or other organization to obtain access to sensitive information or systems of the victim’s customers, clients, or business partners.

Third-party data breaches are growing more common as technology allows firms to connect more easily and global supply networks become more complex. As a result, organizations are frequently unable to see where their data goes, and proprietary or sensitive data can be easily shared with vendors and subcontractors about whom the contracting organization needs to learn more. This article covers detailed knowledge of Third-Party Data Breaches.


What Causes Data Breaches?

The assumption is that a data leak is the result of an outside hacker, although this is not always the case.

Data leaks occasionally have reasons that can be traced back to intentional attacks. But it could also result from someone being irresponsible or from flaws in a company’s infrastructure.

The following are some examples of data breaches:

  • An insider by accident: An example would be a worker viewing files on a colleague’s computer without the required authorization permissions. No information is released, and the access was unintentional. But because an unauthorized entity saw it, the data is now considered to be compromised.
  • A cunning insider: This individual willfully acquires and/or disseminates material to harm a person or organization. The malicious insider intends to use the data for unlawful reasons, even if they have the authority to use it.
  • Loss or Theft of Devices: Devices are lost or stolen, including laptops that are not locked or encrypted and external hard drives that contain sensitive data.
  • Outside criminals with malicious intent: These are hackers who use a range of attack techniques to gather data from a network or an individual.

Why Third-Party Data Breaches Are Increasing

Over the last decade, many multinational organizations have significantly invested in information security. Although no system is entirely secure, significant expenditures in cybersecurity make it significantly more difficult for bad actors to compromise well-resourced organizations. Hackers are increasingly motivated to target smaller subcontractors to circumvent robust, well-funded cybersecurity programs.


What Should You Do If You Are the Victim of a Third-Party Data Breach?

Some of the procedures you may need to do if a significant amount of sensitive data has been exposed are listed below.

  • Mobilize Your Breach Response Team

To prevent further data loss, you must move quickly to mobilize your breach response team. They must patch any vulnerabilities, reset passwords, secure or lock down impacted systems, etc. You must also contact the appropriate authorities and forensics professionals for more information on how and when to restore your systems.

  • Find and Remove any Leaked/Stolen Information

Any sensitive data disclosed to the public must be erased promptly. As search engines “cache” copies of your website, you may need to contact them and request that those copies be removed. Your security team should search Google for copies of sensitive data on other websites. To discover the cause, you must also interview everyone involved in or witnessed the breach.

  • Alert the Necessary Parties

The breach must be reported to the appropriate authorities, organizations, and persons, and the method for doing so should be documented in the IRP. You must verify state and federal rules and regulations for any obligations that pertain to your business.


How Do Data Breaches Happen?


  • An Accidental Insider

An employee of a corporation may unintentionally break the company’s security by accessing information they should not have access to.

  • A Malicious Insider

An employee who maliciously seeks and utilizes information from a company’s database might compromise an organization’s security.

  • Lost or Stolen Devices

A breach can occur if a device storing sensitive information that can be accessed is lost or stolen.

  • Malicious Outside Criminals

A severe breach occurs when a malevolent outside criminal actively utilizes their resources to create a breach in an organization’s security.


Essential Steps to Mitigate the Risk of Third-Party Data Breaches

The steps below outline how you should collaborate with third-party suppliers and how breach response services should collaborate to protect your data.

  • Evaluate Your Potential Vendors Before Bringing Them on Board

Competitive suppliers understand that their security procedures can make or break their ability to cooperate with security-conscious organizations. When onboarding new third-party associates, using a pre-established breach intelligence service will help you rapidly understand the risk level you are accepting.

  • Integrate Risk Mitigation Strategies into your Contractual Agreements

Including responsibility for breach intelligence in your vendor contracts provides reasonable assurance that your breach protection procedures will be followed.

Your vendors will face additional legal pressure to prioritize preventing unauthorized access to your data via their systems. Consider requiring your third-party vendors to regularly analyze and share their breach risk elements.

If a vendor fails to enhance their cybersecurity, use your contract as leverage to terminate your business connection with them or to persuade them to improve their security.

  • Regularly Check Vendors for Potential Security Vulnerabilities

As cyber-attacks become more common and complicated, check in with your third-party partners frequently to see what security improvements they are doing to stay up with the evolving threat.

Use assessment criteria considering the vendor’s access to your data and prior breach protocols. Inform your providers of your expectations so that they can implement security measures in response to your worries.

As new risks emerge, keep informed about how your vendors are prepared to manage all breach attempts. ZeroFox can assist you in determining what steps to take and give the materials required to examine the vulnerabilities of your third-party collaborator.

  • Work Together with Your Vendors

Using a professional and organized platform to request remediation or perform risk assessment surveys can help you negotiate the crucial conversations you need to have while remaining respectful of both your own and your vendor’s organizations.

Data breaches that harm your organization can also affect your third-party providers, so keep communication channels open.

  • Discuss risks posed by Third-Party Entities

Communicating with third-party entities about the security concerns your company has identified respectfully and frequently enables an active response.

When security is part of an organizational leader’s narrative and not only confined to one person or team, it provides a more thorough awareness of what breaches could occur and how everyone who comes into contact with sensitive data can assist in lessening the risk or impact of a breach.

If a vendor senses how essential security measures are to your company’s leaders, they may be more willing to work harder to secure your data from a breach.

  • Evaluate Potential Risks Associated With Subcontractors Or Other Downstream Entities

If your data will be shared with these third-party entities, ensure your vendors educate you about who has access to your data and that you complete risk assessment questionnaires on these companies.

When selecting a provider, look for one who collaborates with third-party companies and employs security mechanisms you can rely on.


Damage a Data Breach Can Cause

Data breaches can irreparably harm a company’s brand, and if critical data is taken or exploited, businesses can lose considerable resources.

Even if the breach only results in a momentarily inoperable website, an organization will lose clients since they may choose a different brand out of convenience. If a data breach disrupts a company’s social media or provides false information, a website may lose confidence with potential consumers, resulting in revenue loss.

Private information exposed via an organization’s servers may expose the corporation to lawsuits and additional loss of reputation.



Individuals and organizations are both concerned about data leaks. To lessen the effect of a security incident, it is critical to implement controls to prevent data breaches and have a response strategy.

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