Major databreaches make the news. TJ Maxx, Barnes & Noble, and Sony all had high profile breaches. In such large scale breaches, there is a flaw that is easily exploited on a grand scale. The individual hack is rarely reported and easily overlooked.
This past summer, a writer for Wired.com, found his online life turned upside down when hackers infiltrated multiple accounts and, in an attempt to burn their tracks, deleted years of emails and photographs in the process. The reason was because he had something they wanted: a three-letter Twitter handle. With little information, hackers were able to socially engineer well-meaning people at Apple and Amazon into giving them the information they needed to get into his accounts and obtain remote access to his wired devices.
In a follow-up to his experience, he published a piece yesterday outlining why passwords cannot keep users safe. A few of the more salient points are: 1) as computing power increases, brute force attacks can become more successful; 2) users use the same logins for multiple systems; 3) answers to security questions can be easily found; and 4) convenience is a trade-off for security. If one were to follow the prevailing wisdom, each person would have to memorize 16 digit, non-dictionary, randomly generated passwords for the dozens of online accounts held, without storing those passwords anywhere. This is nearly impossible and hence systems put in place password reset mechanisms that are themselves vulnerable.
Online businesses should take a closer look at how they protect their individual clients and what information is revealed in the event a third-party gains access that could be used to disguise themselves as the client to another provider. Failure to do so may subject them to a cyberliability claim.