According to a TechCrunch report, Social Captain stored passwords of linked Instagram accounts in unencrypted plaintext.
A website vulnerability allowed anyone access to any Social Captain user's profile without having to log in and access their Instagram login credentials.
"A security researcher, who asked not to be named, alerted TechCrunch to the vulnerability and provided a spreadsheet of about 10,000 scraped user accounts," said the report.
About 70 accounts were premium accounts of paid customers.
Social Captain said later it had fixed the vulnerability by preventing direct access to other users' profiles.
Instagram said the service breached its terms of service by improperly storing login credentials.
"We are investigating and will take appropriate action. We strongly encourage people to never give their passwords to someone they don't know or trust," an Instagram spokesperson was quoted as saying.
According to Adam Brown, Manager, Security Solutions, at Synopsys Software Integrity Group, design flaws are the cause of approximately 50 per cent of all software vulnerabilities.
"They are seldom detected without performing a design review as this activity requires select expertise. That said, in this case a penetration test should have easily identified this flaw," Brown told .
"This is especially bad for affected users not just because their Instagram passwords are now breached, but also due to the fact that people commonly reuse passwords which could lead to unauthorised access of additional accounts by extension," he elaborated.
Instagram saw itself in trouble in May last year after personal data of millions of celebrities and influencers were allegedly exposed on its platform in a massive database that was traced to Mumbai-based social media marketing firm.
The database contained 49 million records of several high-profile influencers, including prominent food bloggers, celebrities and other social media influencers.
In 2017, a bug in Instagram led to the leak of personal details of more than 6 million celebrity users, including Taylor Swift and Kim Kardashian.
The stolen information was later dumped into a database and reportedly sold for $10 per record via Bitcoins.
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( With inputs from IANS )