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4 Most Common Reasons for Data Loss


A data loss event happens when information gets altered, corrupted, or deleted within a computer system. Companies typically lose a lot of time and money trying to recover the material. According to Mcafee, 68% of companies who lost information because of a data breach experienced negative impacts on their reputation. Therefore, it’s important that organizations understand the top data loss causes. That way, they’re better prepared to implement an effective data loss prevention strategy.

Common Causes of Data Loss

1. Malicious Attacks

Cyber attacks are attempts made by individuals to steal, expose, or destroy information by gaining unauthorized access to a computer system. Bad actors can initiate a malicious attack from inside or outside an organization. Motivations for malicious attacks may be tied to cyberterrorism, desire for financial gain, or to disrupt a company’s business. Malicious attacks cost companies an average of $4.27 million in 2020.

Individual cybercriminals or groups of hackers may initiate outsider threats. For example, some amateur hackers decide to take data from companies or government entities for political reasons. An insider malicious attack may result from the disgruntled feelings of a former employee, business partner, or even a former contractor with access to an organization’s applications.

Individuals launching a malicious attack to cause a data loss event may go after information like:

  • Financial data
  • Client info
  • Customer information
  • Login credentials
  • Email addresses of corporate officers
  • Personal employee information

Cyber attackers constantly evolve their toolkit when targeting businesses. They like to look for vulnerabilities in places like computer networks, personal computers, and IT systems. Some of the most common forms of malicious attacks that lead to data loss include:


Trojan attacks create a vulnerability in an organization’s IT infrastructure. That way, hackers can gain remote access that allows them near-complete control.  The attacker can take information from different company databases and systems.

Cross-site scripting (XSS)

XSS attacks involve hackers inserting malicious code into application or website scripts to steal user information. For example, a bad actor might try and execute an XSS attack on a banking website to steal customers' login credentials. Even worse, they might successfully execute an XSS attack to capture an executive’s login credentials to one business application and use them to access and steal data from other systems.

Malware and Ransomware

Malware is a form of malicious software that makes a business system non-functional. For example, many hackers use malware to wipe out files critical to running a company’s operating systems. Ransomware is a more advanced form of malware used to hold data or business systems hostage. The attacker threatens to release or delete the information if they don’t receive some form of payment.

2. Human Error

Unintentional mistakes committed by employees are another leading cause of data loss events. These errors can include IT workers failing to execute software updates or accidentally deleting critical business information from a database. Even worse, there may not be a backup available because the system dedicated to that ran out of space.

The fallibility of humans is something that hackers like to exploit. For example, they may send out phishing emails designed to lure workers into providing them with the information they can use to break into other company systems. In addition, some hackers have resorted to stalking the social media of employees at a specific company in hopes they will let something revealing slip.

Other common causes of data loss due to human error include:

  • Individuals failing to take a correct course of action because of negligence
  • Temporary lapses in judgment leading to critical mistakes
  • Users not having the knowledge-base necessary to make a correct decision
  • Individuals failing to realize they should have taken a specific action to prevent data loss

One example of a mistake leading to data loss is an employee consistently using a weak password that a hacker can easily exploit. That’s a double failure, as organizations should have a data loss prevention system that forces workers to set up strong passwords for system access.

3. System Issues

Various system problems can result in data loss. An example of that is a frequently-used software application crashing, leading to corruption or the loss of information. Another common failure type is when data ends up getting deleted when a user attempts to update critical files.

Issues can also occur when attempting to back up company data. The system may not create copies or automatically delete the original files. A company’s antivirus software may incorrectly target data as malware and erase it from the system.

A failure of business hardware is also a common reason for data loss. For example, a data storage drive may start malfunctioning and destroy the information it contains. That can result from the mishandling of the device by inexperienced IT personnel. Hard drives can overheat or sustain damage from moisture, fire, or a power outage. Other factors that can lead to hardware issues include:

  • Corruption
  • Read/write failures
  • Firmware issues
  • Aging components

Many people live in areas of the country prone to natural disasters like hurricanes or flash flooding. If an organization’s data loss prevention strategy does not account for the possibility of these events impacting their business systems, the company may be caught unprepared and end up without the critical information necessary to get their business back up and running.

4. Physical Theft

Most enterprises understand the importance of protecting data from online attacks via malware, phishing attempts, and network breaches. However, physical spaces are still a prime target for criminals. Many still go through the garbage of organizations looking for information used to fill out tax forms or protected health information on patients.

The rise of remote working opportunities has led to companies distributing more company devices than ever to workers. While that makes it convenient for an employee to work from anywhere, that also opens up avenues for a thief to steal a company laptop when they see an opportunity.

If a user relies on a smart video-enabled doorbell, a hacker could monitor their movements around the house, then break in once they leave. This is just one example of how thieves target physical devices to break into and steal company data.

How Can You Prevent Data Loss?

The best way to keep your enterprise from falling victim to the above scenarios is by taking the time to implement a robust data loss prevention system. The most effective way to protect your company information is to back up all files and documents. At least one copy of critical business data should be kept in a physically distant location. That makes it easier to restore information resulting from data loss.

Cloud storage has become a popular option among organizations across different industries. As a result, enterprises don’t have to maintain servers on-premises and can purchase as much space as needed. However, backups should not be the only tool a company relies on to prevent business downtime because of data loss.

Below are some additional elements your organization should incorporate into its data loss prevention strategy.

Threat Management

Make sure you can identify and protect the most important assets and resources within your company. You should have physical controls that help you keep track of and safeguard any physical infrastructure. For example, if you provide your workers with a personal laptop, there should be a mechanism that lets you track down and shut down lost or stolen devices as quickly as possible.

Sensitive Data Encryption

If bad actors do find a way to access your company data, encrypting your information can prevent them from stealing it or using it to cause further damage. Your data loss prevention system should ensure that any critical information gets encrypted, whether it’s at rest in a database or getting uploaded to the cloud.

Strong Password Policies

If you rely on passwords to protect company devices, your organization should enforce strong password policies. For example, you can force employees to create passwords that meet specific length and complexity requirements, making it more challenging for bad actors. In addition, your company should require users to change passwords frequently, depending on the system and method they use to access them.

Another good policy is to make users sign out of any system or application once they no longer need them for work. That way, no one can come behind them and use that same login info for unauthorized access.  

Enable Stronger Security Policies

Data loss events can lead to a drain on company resources. For that reason, organizations should work to identify any potential weaknesses in their IT and human infrastructure. The suggestions above are just some ways enterprises can enact data loss prevention systems that keep information protected.

Safeguarding company data requires a multi-pronged approach that includes employee training and making security part of the business culture. At ne Digital, we offer expert guidance to organizations looking to establish robust security protocols. Contact us today to set up a consultation. In addition, check out our blog for more helpful articles.  

Topics: Cybersecurity

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