Password sharing is a fact of life in most businesses. Your marketing team needs access to social accounts, your finance team shares login credentials for banking tools, and new hires need to get into shared systems fast.
The challenge is that how you share those credentials matters just as much as what you're protecting. Some common sharing habits can leave your accounts more exposed than you'd expect. LastPass helps teams share passwords securely with encrypted folders and granular access controls.
This article walks you through 10 common password sharing mistakes that put businesses at risk. You'll learn what makes each practice dangerous and how to protect your company from these vulnerabilities.
Key Takeaways: password sharing practices that put your company at risk
- Sharing passwords over email or messaging apps exposes credentials to hackers who can intercept unencrypted communications.
- Reusing passwords across multiple accounts means one breach can compromise your entire organization.
- Failing to revoke access when employees leave creates security gaps that bad actors can exploit.
- LastPass offers encrypted shared folders that let teams collaborate on credentials with full visibility and control.
- Multifactor authentication adds a critical security layer that protects shared accounts even if passwords get exposed.
10 risky password sharing habits your business should avoid
1. Sharing passwords over email or Slack
Sending a password over Slack or email takes 2 seconds. But email and chat platforms weren't built for sensitive data. These communications often travel unencrypted, sit in searchable archives, and can be forwarded without your knowledge.
Hackers specifically target business email accounts because they know passwords hide in inboxes. Once someone gains access to an email account, they can search for keywords like "password" or "login" and harvest credentials in minutes.
The best way to share passwords with your team is through an encrypted password manager. This keeps credentials out of your message history and gives you control over who can access them.
2. Storing passwords in shared spreadsheets or documents
Shared Google Sheets and Word documents have become unofficial password storage for many teams. The problem is that these files often have broad access permissions and no encryption protecting the data inside.
Anyone with access to the document can view, copy, or share those passwords. There's no audit trail showing who looked at what or when. And if someone accidentally changes the sharing settings, your credentials could become visible to anyone with the link.
A password manager stores your credentials with AES-256 encryption and zero-knowledge architecture. This means even if someone intercepts the data, they can't read it without your master password.
3. Using the same password across multiple accounts
Password reuse is one of the most common security gaps in any organization. When employees use the same password for multiple tools, a single breach can cascade across your entire company.
Hackers run automated attacks that test stolen credentials against hundreds of popular services. If your marketing team's shared social media password matches the one for your CRM, attackers get a two-for-one deal.
The solution is to generate unique, complex passwords for every account. Built-in password generators create random strings of characters that are nearly impossible to guess or crack through brute force.
4. Sharing login credentials verbally or via sticky notes
Old-school password sharing still happens every day. Someone shouts a password across the office, scribbles it on a Post-it, or writes it on a whiteboard during onboarding. These methods leave credentials exposed to anyone walking by.
Beyond the visibility issue, these methods also create zero documentation. You have no idea who knows the password, no way to revoke access, and no record if something goes wrong.
Digital password sharing through encrypted channels solves these problems. A team password manager lets you share credentials instantly while maintaining a complete record of who has access to what.
5. Letting employees share passwords without oversight
When employees share credentials informally, security gaps multiply. One person shares with a colleague, who shares with an intern, who shares with a contractor. Before long, you've lost track of who can access critical accounts.
This uncontrolled sharing creates accountability problems. If something goes wrong, you can't trace the issue back to its source. You also can't ensure that people who no longer need access have been removed.
Centralized password management gives administrators visibility into sharing activity. You can set permissions, track user access history, and revoke credentials with a single click.
6. Not revoking access when employees leave
Employee offboarding often misses password cleanup. When someone leaves your company, do you know every shared credential they had access to? For many businesses, the answer is no.
Former employees with lingering access pose a serious threat. They might not have malicious intent, but their knowledge of your passwords could be exploited if their personal accounts get compromised.
Automated user deprovisioning solves this challenge. LastPass Business integrates with Active Directory, Google Workspace, Okta, and OneLogin. When you remove someone from your directory, their access to shared passwords gets revoked automatically.
7. Sharing passwords without multifactor authentication enabled
A shared password alone isn't enough protection for important accounts. If that password gets exposed through phishing, a data breach at a third party, or an insider threat, attackers can walk right in.
Multifactor authentication adds a second verification step that keeps accounts secure even when passwords are compromised. Without it, your shared credentials are only as strong as your weakest link.
Modern password managers support multiple MFA methods including authenticator apps, hardware keys like YubiKey, and biometric options like fingerprint scanning and Face ID.
8. Giving more people access than necessary
The principle of least privilege exists for good reason. Every person with access to a credential represents a potential point of failure. The more people who have a password, the more opportunities for it to leak.
Many teams default to sharing passwords broadly because it feels easier than managing permissions. But this approach creates unnecessary risk for accounts that only need limited access.
Encrypted shared folders let you organize passwords by team, project, or department. You can give each group exactly the access they need and hide passwords from users who only need to log in without seeing the actual credentials.
9. Not tracking who has access to which passwords
If you can't answer the question "who has access to our company bank account right now?" you have a visibility problem. Many businesses operate without any record of password distribution.
This lack of tracking makes security audits nearly impossible. You can't identify vulnerabilities, investigate incidents, or demonstrate compliance to auditors and regulators.
A Security Dashboard shows you exactly which passwords are shared, who can access them, and whether any credentials have appeared in known data breaches. This visibility turns password management from a guessing game into a measurable process.
10. Using weak or easy-to-guess passwords for shared accounts
Shared accounts often get the weakest passwords because they need to be memorable for multiple people. "Company123" might be easy to remember, but it's also easy to crack.
Attackers use dictionary attacks and common password lists to break into accounts. If your shared credentials include predictable words, names, or number sequences, they're vulnerable.
A password generator creates random, complex passwords that resist cracking attempts. Since you don't need to remember these passwords, they can be as long and complicated as necessary.
How LastPass helps you share passwords securely with your team
LastPass gives your team a secure way to share credentials without the risky workarounds. It encrypts your passwords with AES-256 encryption, the same standard used by banks and government agencies. LastPass also uses zero-knowledge architecture, which means even LastPass can't see your passwords. Only you and the people you share with can access them.
The platform lets you share passwords one-on-one or with groups through encrypted shared folders. You can organize credentials by project, team, or department, and optionally hide passwords from recipients who just need login access.
For administrators, LastPass offers more than 120 customizable security policies and role-based access control. You can designate users, helpdesk admins, admins, and super admins with appropriate permissions for each role. Detailed reporting tracks user access history and instances of unauthorized access.
LastPass Business includes directory integration with Microsoft Active Directory, Google Workspace, Okta, and OneLogin. When employees join or leave, provisioning happens automatically. You also get dark web monitoring that alerts you if your organization's information appears in data breaches.
Ready to stop risky password sharing? Try LastPass and give your team the tools to collaborate securely.
