About 60 percent of LivingSocial members reuse their passwords, according to a report released Monday by a password manager software maker.
The software maker, Dashlane, also reported that the typical Internet surfer reuses the same password at an average of 49 websites.
Those numbers could be bad news for members of online deal site LivingSocial which had to reset the passwords of about 50 million users last week after it discovered those credentials had been compromised in a data breach.
"The problem with the breach is not just that your LivingSocial password got out there on the Web," Dashlane Marketing Vice President Nishant Mani said in an interview. "It's that that same password, along with the same login ID, which most people seem to use on many other sites, is now out there."
"Hackers can take the trove of information," he continued, "and in an automated fashion try it out on all the more important sensitive websites that they really want access to."
"Because we, as a population, keep reusing passwords, we make it incredibly easy for them," he added.
Once a hacker cracks a batch of passwords, they'll visit a number of sensitive websites -- banks, health care providers and such -- and perform an automated attack feeding the passwords into login screens until they hit paydirt.
While it's well known that people reuse passwords and use weak passwords, such as 123456, for many non-sensitive websites, they also use those practices at sensitive websites, too.
"Our data doesn't categorize websites by sensitivity, but we do know that there's a reasonable liklihood that among the 49 websites the password is reused at, there's at least a couple of sensitive sites in those 49," Mani said.
In its letter to users, LivingSocial asked its members to change not only their LivingSocial password, but their passwords at other sites where they may have reused the password. "I'm glad they did that," Mani said. "Most sites don't do that. They just say change the password to their site."
Unfortunately, if Dashlane's data is any indicator, more than half the members will reuse a password they're using elsewhere or modify their compromised password in a weak way. For example, changing password to password2.
That's if they choose to change their password at all. "They tell you to change your password, but I was able to use the exact same one," Mike Gross, director of professional services and risk management at 41st Parameter, said in an interview.
Gross is less concerned with his LivingSocial password being cracked than hackers getting his email address. "You can tell a lot about people from their email address," he said.
"You can go to Facebook or LinkedIn or others, search for somebody based on an email address and find out a lot of other details about that person," he continued. "It opens a lot of doors for someone to attack you, even without password information."
One way to blunt the impact of breaches like the one on LivingSocial would be for online services to adopt two-factor authentication, where the second factor would be a code sent to a cell phone. "That's an option that would get very wide adoption by consumers," Gross said.
"There's always a push-pull between what's mandated versus what's convenient," he continued, "and as a consumer, I'm going to do the least I have to do for protection because I know there are laws and regulations in place to limit my liability if there's a loss."