Passwords have become a ubiquitous part of our digital lives. From email and banking to corporate systems, we’re expected to create and manage unique passwords for countless accounts. Although this is a task that’s easier said than done, passwords remain the most common way to keep unauthorized people out of our accounts and sensitive data. Unfortunately, cyber attackers know this all too well. They are continually refining their techniques to carry out account takeovers using compromised passwords. Stolen or exposed passwords pose a significant threat to both organizations and individuals. As time goes on, the list of exposed credentials continues to grow at an alarming rate. In fact, according to Microsoft Azure Active Directory recent authentication log data, Microsoft’s security team observes 921 password attacks every second, a rate that nearly doubled in just one year. It’s no wonder Verizon’s data breach investigators have noted that the use of stolen passwords has become the single most popular entry point for breaches today. Compromised passwords are a cybersecurity crisis, and addressing this threat should be top priority for security teams.

The Impact of Compromised Passwords

We are in the midst of what many call a data breach epidemic. Breach incidents are reaching record highs, and compromised passwords are a driving force behind this trend. 2024 saw over 6,000 data breaches worldwide, exposing billions of records of personal data. Each of these incidents can put thousands or even millions of passwords into criminals’ hands. Verizon’s annual DBIR shows that human factors like stolen credentials play a role in the majority of breaches: 60% of breaches involve the “human element,” with credential abuse being the largest contributor to this category. Various studies likewise show how pervasive this issue is. For example, over half of companies reported a rise in account takeover attempts. In short, compromised passwords have become a crucial part of the breach epidemic, enabling hackers to “log in” rather than break into systems they want to exploit.

Reputation and Financial Loss: When attackers gain access to an organization’s IT systems using a compromised password, the damage can be devastating. They can steal sensitive data, disrupt operations, and even harvest additional passwords from the breached environment to extend their attack. The immediate fallout (incident response, remediation, notifying users) is costly, but the longer-term damage to a company’s reputation and customer trust can be even costlier. According to IBM’s latest Cost of a Data Breach report, the average data breach now costs $4.44 million globally, with breaches due to compromised credentials having an even greater financial impact. This is higher than ever and demonstrates that breaches are an expensive crisis for businesses. Such financial impacts can devastate companies of all sizes, but they are particularly severe for small and medium-sized businesses (SMBs). Smaller organizations often lack advanced cybersecurity defenses and may falsely assume they won’t be targeted. In reality, SMBs are being successfully attacked four times as often as larger firms, according to Verizon’s data. The outcome for an SMB hit by an attack through compromised credentials can be catastrophic; many never fully recover from the combined losses of money, data, and customer confidence.

Loss of Data and Privacy: The data lost in breaches involving compromised passwords can include customer information, intellectual property, and other critical records. IBM found that recent years have seen a rise in very large breaches involving millions of records, showing that when passwords fail, enormous amounts of data can spill out. On average, tens of thousands of records (if not far more) may be lost in a single breach. And once that information is out in the world, it’s nearly impossible to regain control over it. As security experts grimly note, user data has no expiration date once it’s leaked – even old breached passwords and personal details remain valuable to criminals. Attackers will recycle credentials found in one breach to try them against other accounts (a practice known as credential stuffing), betting on the common human habit of reusing passwords. For individuals, this means a single compromised password can lead to a cascade of account takeovers, identity theft, or fraud across multiple services. Whether it’s a person suddenly finding their email and social media hijacked, or a company discovering its confidential data dumped online, the fallout from a compromised password can be long-lasting and deeply damaging.

Recent Breaches Involving Compromised Passwords

• Colonial Pipeline (2021): In May 2021, a ransomware attack shut down America’s largest fuel pipeline. An investigation revealed the attackers gained entry through a single compromised password. A legacy VPN account had a password that had been stolen and later discovered in a batch of leaked credentials on the dark web. Using those credentials, the hackers infiltrated Colonial Pipeline’s network, leading to fuel shortages and a $4.4 million ransom payment. This incident showed how one exposed password can disrupt critical infrastructure.
• MGM Resorts (2023): In September 2023, the casino and hotel giant MGM Resorts International suffered a major cyberattack that started with account access. Hackers from a group later identified as “Scattered Spider” reportedly tricked an MGM employee via a helpdesk call into revealing their login credentials. Armed with the stolen username and password (and bypassing multi-factor authentication by social engineering), the attackers gained access to MGM’s network and disrupted operations. The breach forced the shutdown of MGM’s IT systems for days. Slot machines stopped working, digital hotel services went offline, and guests experienced widespread disruptions. MGM reported in filings that the incident cost roughly $100 million in damages. This example shows how a single stolen password, combined with clever social engineering, can penetrate an enterprise’s defenses and lead to massive real-world consequences.
• Uber (2022): In September 2022, ride-sharing company Uber suffered a notable security breach that also began with a compromised password. An attacker managed to purchase an Uber contractor’s corporate password on the dark web (likely obtained from an earlier unrelated data breach or malware on the contractor’s device). Armed with these stolen credentials, the hacker attempted to log in to Uber’s internal systems. Uber did have two-factor authentication in place, and the login attempts triggered repeated 2FA approval requests. Unfortunately, after a barrage of persistent login prompts (an “MFA fatigue” attack), the contractor eventually approved one, thinking it was legitimate. This allowed the attacker to successfully authenticate and pivot deeper into Uber’s network, where they accessed internal tools and data. The Uber breach showed that even when layers of security are in place, a compromised password combined with social engineering can still break through defenses.

These examples span different industries and years, but they share a common theme: stolen or weak passwords were the attackers’ keys to unlock the door. Whether it’s critical infrastructure, a major enterprise, or a massive database of user accounts, compromised credentials provide a fast and often stealthy path for hackers to achieve their goals.

The Growing Threat and the Future of Authentication

As former U.S. Homeland Security Secretary Michael Chertoff famously said, “The password is by far the weakest link in cybersecurity today.” Despite advances in other areas of security, that statement still rings true. Passwords, by their nature, present a huge security risk: they can be stolen, guessed, cracked, or leaked. Crucially, most alternative authentication methods still retain the password as a backup or secondary option. If your biometric sign-in fails or you lose your hardware token, you often fall back to your username and password. Passwords will remain a cornerstone of authentication for some time to come. The challenge is clear: we must implement systems to dramatically improve the security of our passwords.

One of the most impactful practices is compromised password screening. This involves checking new passwords (and periodically re-checking existing ones) against databases of known breached or common passwords. Security standards now recommend this: updated guidelines from NIST explicitly advise that organizations screen user passwords against lists of common and compromised passwords, and not allow those that have been exposed in past breaches. The rationale is straightforward: if a password has already been published in a data dump on the internet, it’s unsafe to use. By integrating exposed-password screening into password creation and reset processes, organizations can automatically block users from choosing a password that hackers already know. Many enterprises have gone further by continuously monitoring to see if any of their users’ passwords appear in new breach data, so they can prompt a reset immediately. This kind of proactive defense can stop an attacker from using a stolen password to log in. It’s a strategy that is rapidly gaining traction and is increasingly mandatory given the billions of leaked credentials circulating in the criminal underground.

In summary, the threat of compromised passwords looms large. From massive data breaches to targeted account hijacking, weak or stolen passwords are often the linchpin of cyberattacks. Until the day we truly eliminate passwords, organizations and individuals must treat password security as a top priority. That means staying vigilant about breaches, embracing stronger authentication measures, and leveraging tools to weed out compromised credentials. This dramatically reduces the risk of account takeovers and data breaches by raising the cost of attack to a level that often prevents intrusion entirely.