Mediabank faces legal action in Australia over massive data breach

The breach, initially blamed on a third-party contractor and a misconfigured firewall, was later traced to an IT service desk operator at Medibank who inadvertently provided a hacker access to the system.

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Following the 2022 Mediabank’s cyber incident, the Office of the Australian Information Commissioner has initiated legal proceedings against the company, alleging the significant data breach impacted a vast number of customers, including 5.1 million Medibank customers, 2.8 million ahm customers, and 1.8 million international customers, totalling 9.7 million individuals. 

While Mediabank initially blamed a third party contractor and a ‘misconfigured firewall’ for the incident, a federal court case in Australia has revealed that the breach originated from an IT service desk operator at Medibank who stored multiple account credentials on his work computer which provided a gateway for a hacker to illicitly access Medibank’s systems. The hacker exploited this access for nearly two months and managed to extract a substantial amount of personal data, estimated at around 520GB.

The breach was aggravated by the absence of multi-factor authentication on Medibank’s Global Protect VPN, a security loophole that had been previously flagged in reports by KPMG and Datacom in 2020 and 2021. The Office of the Australian Information Commissioner has criticised Medibank for failing to promptly address these known security vulnerabilities. Legal action has been taken against Medibank in response to the breach. Moreover, the government has identified the alleged perpetrator as a Russian citizen named Aleksandr Gennadievich Ermakov and will be imposing sanctions against him under the new autonomous sanctions law. The incident stresses the critical importance of proactive risk mitigation strategies to safeguard sensitive customer information from malicious cyber threats.