Colonial Pipeline: How Hackers ​​​​​​​Exploited a Password Policy Problem

June 29, 2021 Advisory

A single password on an old, unprotected account – that’s all it took for hackers to paralyze the largest fuel pipeline in the United States.

The account was no longer in use at the time of the attack, but the compromised password still worked – and with no other security measures in place, Colonial Pipeline was defenseless against the hackers that accessed its systems on May 7, 2021. Two days later, the federal government declared a state of emergency in 17 states and Washington, D.C., due to spiking gasoline prices, panic buying and thousands of empty gas stations on the East Coast, after Colonial shut down its pipeline operations to contain the cyberattack. After a six-day shutdown and a $4.4 million ransom paid to the attackers, Colonial’s systems went back online. However, as high-profile cyberattacks and ransom payments provide incentives to other would-be hackers, similar ransomware attacks are likely to become even more frequent in the future.

Cyberattacks now pose a critical security threat in the United States. Payments to ransomware hackers totaled more than $350 million in 2020, an increase of 311% from 2019. While breaches at major corporations make the headlines, the majority of cyberattacks target small businesses, which are even less likely to employ adequate cybersecurity measures. With many businesses operating remotely due to the pandemic, the threat of cyberattacks has become even more dire. The account used by hackers in the Colonial attack was a virtual private network (VPN) account, the type of account widely used to allow employees to remotely access their employer’s computer network.

However, basic cybersecurity standards could have foiled the Colonial hackers. To avoid falling prey to a similar attack, companies of every type and size should adopt the following fundamental security measures.

Ensure that employees do not reuse their passwords.

The Colonial hackers didn’t need to use sophisticated software to guess the account’s password. A Colonial employee had used that password on multiple independent websites prior to the cyberattack. When one of those websites became compromised, hackers likely obtained the employee’s password, giving them everything they needed to access Colonial’s systems.

The security provided by complex, hard-to-guess passwords becomes entirely worthless once that password is compromised, and databases with millions of stolen passwords are available for sale online. Preventing employees from reusing passwords on multiple websites is one of the most important first steps in preventing security breaches.

Employ multi-factor authentication.

Once the Colonial hackers gained access to a compromised account, no secondary security measures stood in their way. That’s why multi-factor authentication is necessary. Two-factor authentication would include having the user enter something they know (aka username and password) and prove that they have an object ( such as their phone). For example, after correctly entering a username and password, users also have to enter a secondary security measure, such as a code texted to their mobile devices. While this won’t foil every possible cyberattack, multi-factor authentication methods provide an extra layer of security that prevents bad actors like the Colonial hackers from strolling into an unprotected computer network with nothing more than a compromised password. President Biden’s “Executive Order on Improving the Nation’s Cybersecurity” strongly urged business leaders to mandate the use of multi-factor authentication methods in the wake of the Colonial attack.

Delete old accounts.

The compromised account used in the Colonial hack was tied to an inactive employee. However, the account itself remained active, which provided the attackers with access to Colonial’s systems. To prevent this, company procedures for offboarding employees must include deleting the former employee’s accounts. This also goes for old accounts from systems that are no longer in use. Otherwise, that account will forever be a potential target for hackers.

In the wake of the Colonial attack and the White House’s Order, companies should analyze their own systems and look for similar security vulnerabilities that may be exploited. These proactive security measures are essential in safeguarding company systems against attack. Companies should look not only at their current cybersecurity practices, but also the legal implications of those cybersecurity practices. In a previous advisory on the Colonial Pipeline incident, Armstrong Teasdale’s Privacy and Data Security attorneys discussed how companies can take proactive steps to prepare for prepare for potential cybersecurity intrusions.

Laurel Scott also contributed to this advisory.

Contact Us
  • Worldwide
  • Boston, MA
  • Chicago, IL
  • Denver, CO
  • Dublin, Ireland
  • Edwardsville, IL
  • Jefferson City, MO
  • Kansas City, MO
  • Las Vegas, NV
  • London, England
  • Miami, FL
  • New York, NY
  • Orange County, CA
  • Philadelphia, PA
  • Princeton, NJ
  • Salt Lake City, UT
  • St. Louis, MO
  • Washington, D.C.
  • Wilmington, DE
abstract image of world map
Boston, MA
800 Boylston St.
30th Floor
Boston, MA 02199
Google Maps
Boston, Massachusetts
Chicago, IL
100 North Riverside Plaza
Suite 1500
Chicago, IL 60606-1520
Google Maps
Chicago, Illinois
Denver, CO
4643 S. Ulster St.
Suite 800
Denver, CO 80237
Google Maps
Denver, Colorado
Dublin, Ireland
Fitzwilliam Hall, Fitzwilliam Place
Dublin 2, Ireland
Google Maps
Edwardsville, IL
115 N. Second St.
Edwardsville, IL 62025
Google Maps
Edwardsville, Illinois
Jefferson City, MO
101 E. High St.
First Floor
Jefferson City, MO 65101
Google Maps
Jefferson City, Missouri
Kansas City, MO
2345 Grand Blvd.
Suite 1500
Kansas City, MO 64108
Google Maps
Kansas City, Missouri
Las Vegas, NV
7160 Rafael Rivera Way
Suite 320
Las Vegas, NV 89113
Google Maps
Las Vegas, Nevada
London, England
Royal College of Surgeons of England
38-43 Lincoln’s Inn Fields
London, WC2A 3PE
Google Maps
Miami, FL
355 Alhambra Circle
Suite 1200
Coral Gables, FL 33134
Google Maps
Photo of Miami, Florida
New York, NY
7 Times Square, 44th Floor
New York, NY 10036
Google Maps
New York City skyline
Orange County, CA
19800 MacArthur Boulevard
Suite 300
Irvine, CA 92612
Google Maps
Philadelphia, PA
2005 Market Street
29th Floor, One Commerce Square
Philadelphia, PA 19103
Google Maps
Philadelphia, Pennsylvania
Princeton, NJ
100 Overlook Center
Second Floor
Princeton, NJ 08540
Google Maps
Princeton, New Jersey
Salt Lake City, UT
222 South Main St.
Suite 1830
Salt Lake City, UT 84101
Google Maps
Salt Lake City, Utah
St. Louis, MO
7700 Forsyth Blvd.
Suite 1800
St. Louis, MO 63105
Google Maps
St. Louis, Missouri
Washington, D.C.
1717 Pennsylvania Avenue NW
Suite 400
Washington, DC 20006
Google Maps
Photo of Washington, D.C. with the Capitol in the foreground and Washington Monument in the background.
Wilmington, DE
1007 North Market Street
Wilmington, DE 19801
Google Maps
Wilmington, Delaware