DocuSign Breach a Strong Reminder for the Mortgage Industry to Manage Third-Party Service Provider Risks

by Ballard Spahr LLP
Contact

Ballard Spahr LLP

On May 16, DocuSign confirmed that a data breach resulted in widespread malware phishing attacks targeting its customers. DocuSign provides electronic signature solutions for many companies in the mortgage banking industry that may have been victims of the phishing campaigns launched during the past week. Companies should move swiftly to protect themselves from the impact of the DocuSign breach as well as consider what next steps may be appropriate as part of any ongoing relationship with DocuSign.

As one of the most dominant players in providing mortgage technology solutions, the DocuSign  name and brand has frequently been exploited in phishing emails; but this particular attack was able to target more than 100 million customer email addresses that had been hacked from what DocuSign characterizes as “a separate, non-core system.” These phishing emails appeared to be sent from DocuSign with the goal of tricking recipients into opening an attached Word document that, when clicked, installs malicious software. DocuSign recommends that its customers delete any emails with the following subject lines:

  • Completed: [domain name]  – Wire transfer for recipient-name Document Ready for Signature”; or
  • Completed [domain name/email address] – Accounting Invoice [Number] Document Ready for Signature”.

DocuSign has stated that its “core” systems, which contain all other customer files, remain secure, and that only email addresses were accessed. No names, physical addresses, passwords, Social Security numbers, or credit card information was accessed by the hackers. DocuSign has also purportedly put further security controls in place to protect against any future such hacks.

All companies that use DocuSign as a third-party service provider should be evaluating what additional steps should be taken in the wake of the breach. The Consumer Financial Protection Bureau (CFPB) has articulated clear expectations with regard to companies’ relationships with their third-party service providers. While the CFPB recognizes that the use of service providers like DocuSign is often an appropriate business decision for companies that may not have the in-house expertise with E-SIGN and other relevant laws and regulations, the CFPB will hold companies accountable for any consumer harms that may arise from the use of such service providers. Companies should consider:

  • Refreshing any employee training to recognize phishing emails that may be received following the DocuSign breach.
  • Reviewing any existing agreement with DocuSign to determine:
    • whether DocuSign is satisfying all of its breach-related obligations;
    • whether the company can audit DocuSign to confirm that the breach was isolated to just email addresses and what further security measures DocuSign has implemented since the breach;
    • whether additional monitoring of DocuSign operations may be appropriate; and
    • whether the company can exercise any appropriate and enforceable consequences arising from the DocuSign breach, up to and including terminating the DocuSign agreement.
  • Contacting the company’s cyber insurance carrier—although the breach originated at a third-party service provider, companies should review their policies to confirm whether they are covered for any breach-related costs.
  • Preparing a uniform message that the company can use with consumers that may have questions about the potential impact of the DocuSign breach.
  • Evaluating the company’s own information security programs and data breach response policies and procedures.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Written by:

Ballard Spahr LLP
Contact
more
less

Ballard Spahr LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!