How to Respond to a Vendor Data Breach

Cyberattacks are a real threat to businesses and organizations, becoming more common every year. Studies show they rose 42% during the COVID-19 pandemic compared to 2021. These attacks are indiscriminate, targeting businesses from automotive companies to steel manufacturers and even prisons.

These attacks can have widespread effects, such as stealing valuable data to be ransomed later or crippling a business’s supply chain. IT professionals must stay vigilant as much as possible, but the unfortunate truth is that they can’t have eyes everywhere.

Your response has to be swift and professional if a cyberattack on one of your third-party vendors is successful. Here are some tips on how you can handle the situation.

Ask the Right Questions

The first step to reducing any cyberattack’s impact is gathering information. Here are some good questions to ask your vendor if a cyberattack occurs.

  • Are the attacks still occurring?
  • Has the data breach been stopped?
  • How did the attackers get into the system?
  • Was there an information leak? Was someone responsible?
  • If so, was it done intentionally?
  • Does the vendor have cyber insurance?
  • Will the vendor pay your legal fees if a lawyer is needed to evaluate breach notification obligations?

Determine if There Has Been a Data Breach

About 56% of companies say they’ve experienced a data breach caused by one of their vendors. However, leaks can be contained if the stolen information has not been exploited. If that is the case, your priority should be to secure your data immediately to minimize the impact on your business.

Ask your vendor if the data leak can compromise your system. The vendor should have immediately launched an investigation when the breach occurred. Ask them how far they are into it and what investigative firms they are working with. If there is a report available, ask for access to it.

Secure Your Data Immediately

If a significant breach of your vendor’s systems has occurred, you must secure your data as soon as possible. Take these steps to ensure your information remains safe.

  • Fix vulnerabilities in your systems: Start a thorough scan of your plans to fix any vulnerabilities that cyberattackers can exploit. This includes changing computer access codes and physical locations that might be at risk.
  • Start moving your breach response team: Contact your third-party security consultant immediately to begin formulating a plan in case the cyberattackers target you.
  • Inform and train your team: Make sure your data forensics team understands the situation and takes steps to prevent a data leak on your end. This includes changing passwords and looking for suspicious emails, texts and phone calls.


Recognizing a Cyberattack

The best way to prevent a data breach is to know what a possible cyberattack can look like. They are constantly evolving, but these are the most common types.


Phishing is the most common type of cyberattack. Phishers will register a fake domain that will look like a legitimate organization. They will then attempt to contact you through email, text message or phone, posing as a representative or a regular contact.

Once they make contact, they will attempt to get you to reveal information such as access credentials or persuade you to click a link that would introduce malware into your computer system. If a cyberattack threatens your organization, training your people to recognize phishing emails, messages and phone calls is essential.

Credential Stuffing

Credential stuffing is a form of cyberattack that injects stolen credentials — usually usernames and passwords — into multiple website login forms to gain access to confidential systems. Your organization could face this kind of cyberattack if your vendor’s security is breached.

Credential stuffing is a form of brute force attack. An automated program will try to access login forms within your organization by continuously entering usernames and passwords. It is easy to prevent if you integrate multifactor authentication software into your cybersecurity or have employees change their passwords immediately.

Identity and Financial Fraud

This is usually the end goal of cyberattacks. However, depending on what kind of information your vendors lost, cyberattackers may already be able to impersonate you to the extent that they can buy goods and services in your name.

Contact your bank immediately to stop all transactions if your business is being impersonated. You should also reach out to any financial and legal counsel to mitigate the damage. One preventive measure you can take is purchasing identity theft insurance for your business.

Respond to Vendor Data Breaches to Keep Your Information Safe

Being forced to handle a possible data breach can be a harrowing experience, especially if it has never happened to you before. The important thing is to remain calm and begin taking steps to protect your business. That can mitigate or completely prevent any damage to your company and its reputation.