United States: Tales From The Trenches: Lessons Learned From The Ashley Madison Data Breach

Last Updated: September 23 2016
Article by Scott Koller

In July 2015, the online cheating website Ashley Madison was hacked and data pertaining to its 37 million users were published online. The story made headlines given the sensitive nature of the information exposed, the number of people affected and the sensational details of the hack, which included allegations of fraud, blackmail and extortion. The media outed several politicians and celebrities as paying customers, while some websites indexed the breached data, allowing people to search for email addresses to see if their spouses or significant others had accounts. Between lawsuits, resignations, suicides and countless stories of extortion and divorce, the fallout from the breach has been immense. Nearly one year later, a joint investigation by the Privacy Commissioner of Canada and the Australian Privacy Commissioner (collectively, "the Commission") has issued a scathing report that provides remarkable insight into the breach and what qualifies as an appropriate information security framework.

Both the Canadian Personal Information Protection and Electronic Documents Act (PIPEDA) and the Australian Privacy Act (APA) require organizations to protect personal information using appropriate physical, technical and organizational safeguards. However, neither act outlines the specific safeguards that must be in place, instead relying on industry guidelines or widely accepted practices. That is what makes this Joint Report so interesting. Here, the Commission found significant deficiencies with Ashley Madison's security framework and described in detail the information security practices it found lacking.

Documented Security Policies

The Commission considers documented information security policies to be a "basic organizational security safeguard." At the time of the incident, Ashley Madison had "critical" gaps in its written information security policies, especially in the area of managing network permissions. Unwritten policies, even if understood and implemented by the relevant employees, are insufficient.

Intrusion Detection Systems

The Commission noted that Ashley Madison implemented some detection and monitoring systems, but those were focused on detecting performance issues. At the time of the incident, Ashley Madison did not have an intrusion detection system (IDS) or security incident event management (SIEM) system, both of which are widely considered to be fundamental parts of an information security framework. The Commission cited the lack of adequate monitoring of system logs as a significant deficiency that delayed detection of the breach. It is not enough to record alerts and security events; those logs must be reviewed on a consistent and routine basis.

Risk Management

Many organizations struggle with maintaining a proper risk management framework, and Ashley Madison was no exception. Here, the Commission provided two important takeaways. First, conducting regular risk assessments is an important organizational safeguard. Second, the patch management and quarterly vulnerability assessments as required by the PCI-DSS were insufficient. Instead, the Commission expects a structured and documented assessment of the overall threats facing the organization.

Multifactor Authentication

In the not-so-distant past, multifactor authentication was viewed in the industry as a "best practice" – something that was nice to have but not required. Today, many regulators consider multifactor authentication to be part of a minimum level of expected security and a requirement for access to sensitive data or remote access. The Commission adopted this position and chastised Ashley Madison's failure to implement multifactor authentication. Moreover, the Commission dismissed Ashley Madison's argument that the use of a username, password and shared VPN passphrase qualified as multifactor, instead highlighting the need for the factors of authentication to be different. In other words, requiring two different passwords does not qualify as multifactor authentication.

Lack of Verification

When visitors to Ashley Madison's website created an account, they were required to provide certain identifying information, including an email address. It is common practice for websites to verify the accuracy of the email address by sending a message to that account to confirm it is valid, a step Ashley Madison did not perform. Both the PIPEDA and the APA require organizations to maintain the quality and accuracy of the personal information they collect. Ashley Madison justified its failure to verify the email addresses by stating the decision was the "result of a deliberate and considered decision by the company to forgo such verification in order to provide users with anonymity." The Commission disagreed, stating that emails were used to contact users about a highly personal, sensitive and discreet matter. By failing to verify the accuracy of the email addresses it collected, Ashley Madison "did not take into account the interests non-users whose email addresses are used without consent and who may receive an 'unwelcome' communication from Ashley Madison that falsely associates them (in their eyes, and the eyes of others) with the company's service." The breach proved that such an association could be highly detrimental to the careers and family relationships of Ashley Madison's customers. Moreover, the Commission rebutted Ashley Madison's argument by stating that if the goal were to preserve member anonymity, the company could have made the email field optional. It's unclear whether these findings would carry over to websites with more innocuous purposes, but they should nevertheless serve as a warning to organizations that collect email addresses to take steps to verify the accuracy of that information.

Retention Practices

The Commission was highly critical of Ashley Madison's data retention practices, including the indefinite retention period for deactivated accounts, a lack of transparency regarding its retention practices, the fee charged to completely delete accounts and the failure of Ashley Madison to delete accounts even when paid to do so. For those who are interested, the report contains all the salacious details surrounding the "pay to delete" option. The ultimate lesson to be learned from the Ashley Madison breach is that it would be wise to take a close look at your data retention practices and take steps to destroy or de-identify information that is no longer needed. Remember, under the PIPEDA, personal information may be retained for only as long as necessary to fulfill the purpose for which it was collected. Similarly, the APA requires organizations to take reasonable steps to destroy or de-identify information it no longer needs. The failure to comply with these regulations is not only a violation, but it can increase your exposure if a breach does occur.

Conclusion

All organizations that collect personal information can learn from the trials and tribulations of the Ashley Madison ordeal. Moreover, the Commission's report on the breach provides valuable insight and helpful guidance on what is considered reasonable security under Canadian and Australian law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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