Data leaks are disastrous. When cybercriminals or competitors uncover sensitive customer info, they could use that information to target your enterprise and cripple your business operations in many different ways.
But as companies keep on collecting more data to improve efficiency and unlock more opportunities, the risk of customer info leaks and data breaches will likely only grow.
By company size, large organizations are more likely to experience a breach or leak compared to smaller companies.
In 2021, for instance, 74% of large companies in the U.S. experienced a data breach compared to 61% of small and medium-sized companies. In 2020, it was 43% against 12%.
However, the size of your company doesn't mean a breach will have less severe consequences; compromised data has a similar impact on any business regardless of its size.
As such, knowing what causes leaked customer info and how it happens is critical to prevent the leaks from happening.
In this article, you’ll learn:
- What Is Customer Information? Examples And 4 Different Types
- What Are Customer Information Leaks?
- How Do Customer Info Leaks Happen And How Do They Affect Your Business?
- 5 Best Practices to Avoid Customer Info Data Leaks and Secure Your Operations
In this guide, we’ll be primarily focusing on startups and small businesses, but the best practices on customer info will be applicable to businesses of all sizes.
With that in mind, let’s dive in…
What Is Customer Information? Examples And 4 Different Types
Customer information is any data about your customers that can help you better understand who they are, what they like, and how they use your product or service.
This information can be anything from a customer's name, address, email address, phone number, to shopping habits, payment methods, purchase history, and product specifications.
Depending on your company and how you use customer information, it can also include payment data, credit card information, bank numbers, and more.
Customer data is critical to business growth as it helps a company increase sales and revenue, as well as build customer satisfaction. Which is why it’s so important to be able to categorize them and keep them safe.
4 Types of customer information
Generally speaking, there are 4 main types of customer information or data:
1. Basic or identity data
This is the data that identifies a customer, such as a name, address, phone number, and so on. It's usually stored in a customer's system as a means of authentication.
2. Engagement data
Engagement data describes the actions taken by a customer. For example, their purchases, site visits, likes, shares, and more. It's usually stored in a customer's system as a repository for company data.
3. Behavioral data
Behavioral data describes the way a customer interacts with the company's systems. This includes the times and dates of logins and logouts, the routes customers take through the website, the content they view, and the search terms they use.
4. Attitudinal data
Attitudinal data describes the customer's "state of mind". Such as the brand attitudes that a customer may have toward the company or its competitors, or whether they will continue to shop with the company in the future.
Now, what about customer information leaks?
What Are Customer Information Leaks?
Customer information leaks—or data leaks, are unintentional releases of customer data.
This happens when a company’s system is compromised but usually, it’s when an employee leaks the information. Out of human negligence or error.
According to Kaspersky, the most common vulnerabilities targeted by malicious criminals include:
- Weak credentials.
- Stolen credentials.
- Compromised assets.
- Payment card frauds.
- Third-party access.
- And more.
A data leak could be as simple as copying and pasting a customer’s email address into a contact form. That information, combined with the customer’s name, might lead to a few dozen emails being sent to the customer’s account, thus breaching their privacy.
It’s important to note that data leaks are usually accidental, although they can also be malicious.
Before we cover how to prevent leaked customer info though, let’s take a look what’s the difference first.
Data leak vs data breach: What’s the difference?
Data leaks are a result of overlooked vulnerabilities or when someone with access to the data inadvertently exposes it to the public.
On the other hand, data breaches are solely caused by hackers or cybercriminals. Data thefts are examples of data breaches.
And it goes without saying that you should be aiming to prevent both.
Despite their varied causes, both data breaches and data leaks lead to dire consequences when sensitive company data is compromised.
Let’s take a look at some examples below.
How Do Customer Info Leaks Happen And How Do They Affect Your Business?
As mentioned above, customer info leaks are primarily an outcome of internal errors.
Some of the leading causes of customer data leaks include:
- Misconfigured software settings.
- Recycled passwords.
- Social engineering.
- Physical theft of hardware devices.
- Software vulnerabilities.
Now, let’s take a look at each in detail to see how they work.
#1: Misconfigured software settings
When setting up your software, always pay close attention to the details and security settings.
Having an incorrect setting is a much bigger problem than having no setting at all. In most cases, misconfigured settings are the root cause of data leaks.
A misconfigured firewall is an almost guaranteed way for customers’ data to leak. A firewall is a security tool that’s designed to keep unauthorized users out. When companies don’t properly configure firewalls, they allow employees to view and transfer sensitive data between internal company devices.
#2: Recycled passwords
Password recycling is a common practice that many large customers engage in.
Password recycling happens when a company reuses the same password across multiple accounts or devices. This might seem like a harmless practice, but it actually has a high risk of leaking sensitive data.
Password recycling allows an attacker to readily identify which accounts a user has access to based on the login data they generate in one account.
This is because most users choose easy-to-remember passwords that they end up using across multiple accounts.
#3: Social engineering
Social engineering isn’t a specific technique.
It’s an umbrella term that describes any tactic that coerces information from users, including any security breaches or data leaks.
Social engineering attacks are a real threat.
They involve psychological tricks that try to manipulate people into giving up sensitive data.
There are many different kinds of social engineering attacks, and many of them rely on reused passwords from previous breaches. Alternatively, they target the weakest link, often - people.
#4: Physical theft of sensitive devices
Theft of sensitive devices is a rare but serious problem. It’s usually a direct result of poor device management.
Keeping devices secure is a battle that never ends. It’s a challenge that every organization faces. It’s also a reality that not every company overcomes. In some cases, sensitive devices are stolen by employees. In other cases, they’re stolen by third parties who have access to corporate networks.