Archive for category Data Breaches

7 Sources of Data Breaches You値l Never Hear About: Your Network Drives

If you think that your tangle of Cat5 in the server room is a mess, wait until you look at your network drive file structure. Licensed from Stock Exchange.

If you think that the tangle of Cat5 in your server room is a mess, wait until you look at your network drive file structure. Licensed from Stock Exchange.

This is the seventh post in a series about data breaches you can prevent. We致e covered Phones and Personal Computing Devices , Your Browser, Your Inbox, Your Thumb and External Drives, Your Old Computer, and Your Cloud Backup . Finally, we値l discuss Your Network Drives.

Most companies have an internal corporate network with one or more shared network drives. If your company network drive is typical, it痴 a layered mess of multiple naming conventions, files from employees who haven稚 been around for years, and old documents with unrecognizable file extensions. Frankly, it痴 impossible for anyone to know exactly what痴 there.

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7 Sources of Data Breaches You値l Never Hear About: Your Old Windows 95 Computer

Digital pack rat: You probably have a backed-up copy of your old 256 MB hard drive, don't you? Licensed from Stock Exchange.

Digital pack rat: You probably have a backed-up copy of your old 256 MB hard drive, don't you? Licensed from Stock Exchange.

This is the fifth post in a series about data breaches you can prevent. We致e covered Phones and Personal Computing Devices , Your Browser, and Your Inbox, and Your Thumb and External Drives. Next we値l discuss Your Old Windows 95 Computer.

Technology has made it easier than ever to be a digital pack rat. Cheap and plentiful memory probably means that you have backed-up a copy of your old 256 MB hard drive, which you also have stashed somewhere in your basement. Before blindly making back-up copies of old hard drives, make sure that you first delete any information you don稚 want to save.

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7 Sources of Data Breaches You値l Never Hear About: Your Thumb Drive

The Law of Portable Device Breaches says that the risk of losing a device, and the information thereon, is directly proportional to its portability. Licensed from Stock Exchange

The Law of Portable Device Breaches says that the risk of losing a device, and the information thereon, is directly proportional to its portability. Licensed from Stock Exchange

This post is the fourth in a series about data breaches you can prevent. We致e covered Phones and Personal Computing Devices , Your Browser, and Your Inbox. Here we値l explore Your Thumb and External Drives.

Just about anything that can store information can be used to store sensitive personal information. Whether you use an external drive to back up sensitive data, or use a thumb drive to transfer large files from one computer to another. The Law of Portable Device Breaches (which I just made up) says that the risk of losing a device, and the information thereon, is directly proportional to its portability. In real terms, this extremely scientific law means that you池e more likely to leave your cell phone at the bar than your desktop computer.

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7 Sources of Data Breaches You値l Never Hear About: Your Browser

Your Stored Passwords: Not exactly secured. Licensed from Stock Exchange.

Your Stored Passwords: Not exactly secured. Licensed from Stock Exchange.

This post is the second in a series about data breaches you can prevent. We致e already covered Phones and Personal Computing Devices. The next source we値l explore is Your Browser.

Laptops, desktop computers and smartphones all have built-in internet browsers. A typical browser can store hundreds of passwords and usernames, credit card numbers, contact information, and browsing history. Even though we use our smart phone browsers to do a significant number of online transactions, typical smart phone browsers do not allow users the same degree of privacy control as desktop browsers.

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7 Sources of Data Breaches You値l Never Hear About: Your Phone

Smart phones are now portable computers which just happen to make calls. Licensed from Stock Exchange.

Smart phones are now portable computers which just happen to make calls. Licensed from Stock Exchange.

This post is the first in a series about preventable data breaches. Most Americans have received a letter, telling them that their personal information has been breached. But there are many breaches you値l never hear about, and many of them are right under your nose. The first source we値l explore is Your Phone and Personal Computing Device.

Remember when cell phones were telephones? Those days are long gone. The current generation of smart phones are powerful computing devices which just happen to also make phone calls.

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A Message From Walgreens

A friend of mine recently received the following email from Walgreens:

December 10, 2010
Dear Valued Customer,

We recently became aware of unauthorized access to an email list of customers who receive special offers and newsletters from us. As a result, it is possible you may have received some spam email messages asking you to go to another site and enter personal data. We are sorry this has taken place and for any inconvenience to you.
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HIPAA Breach Notification Requirements Effective September 23, 2009

The department of Health and Human Services (HHS) and the FTC have issued a new interim final rule governing health information breach notification requirements. I blogged on this issue back in March 2009, just after the stimulus package, American Recovery and Reinvestment Act of 2009 (ARRA), passed.

This rule, issued in response to ARRA, goes into effect on Wednesday. At that point, all HIPAA-covered entities and their business associates must notify individuals and HHS when personal health information has been breached. HIPAA-covered entities include health plans, health care clearinghouses, or health care providers. The rule also covers “business associates” which include billing companies, transaction companies, lawyers, accountants, managers, administrators, or anyone who handles health information on behalf of a HIPAA-covered entity.

A breach is when individually identifiable health information is acquired, used, accessed, or disclosed to an unauthorized party, in a way that compromises its security or privacy. A “breach” does not include inadvertent disclosures among employees who are normally authorized to view protected health information. A breach also does not include exposure of encrypted personal health information, for example.

When a breach occurs, the covered entity must notify victims and the Secretary of Human Services “without unreasonable delay,” and within 60 days of the discovery of the breach. The covered entity must notify the individual directly if possible (ie, by mail), and must also post a notice on its website if the breach involves 10 or more victims who are not directly reachable. If the breach involves more than 500 residents of a single state, the covered entity must also notify statewide media.

In certain limited circumstances a vendor might be subject to HHS and FTC notification rules. In this case, a vendor which serves the public and HIPAA-covered entities may comply with both rules by providing notice to individuals and the HIPAA-covered entity. In many instances, entities covered by this rule must also comply with applicable State notification laws. The test for pre-emption is whether the State law is “contrary,” to the federal law or whether “a covered entity could find it impossible to comply with both the State and federal requirements.”

Compliance

Of course, the best way to comply with the law is to avoiding breaches altogether. The most straightforward way to avoid having a breach is to encrypt personal health information. But if a breach does occur, complying with the law is straightforward. In addition to the requirements above, the notification must include a brief description of the incident, including the following information:

  • Date of the breach;
  • Date of discovery;
  • Description of the types of protected health information breached;
  • Steps individuals should take to protect themselves from potential harm resulting from the breach;
  • A brief description of the investigation, efforts to minimize losses and prevent future breaches;
  • Contact information for individuals who wish to ask questions or learn more information, including a toll-free phone number, e-mail address, website, or postal address.

Beyond that, you’ll have to minimize your losses by repairing your company’s public image, regaining your customers’ trust, and mitigating civil liability.

References: 45 CFR parts 160, 162, and 164.

Note: This article was originally published on the J.C. Neu & Associates Blog.

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Data Breach Notification Requirements in the United States and European Union

Note: This article originally appeared on Jeffreyneu.com

This brief analyzes more than 40 United States Breach Notification laws, the American Recovery and Reinvestment Act, and compares those requirements with EU Directives 2002/58/EC, 2002/21/EC, and the Data Protection Working Party Opinion 1/2009 on 2002/58/EC proposed amendments. This brief does not address individual EU member states’ implementations of EU Directives 2002/58/EC and 2002/21/EC.

Executive Summary

Both the United States and European Union require certain entities to notify individuals when their personal information has been breached. In the United States, State Breach Notification Laws (BNLs) require persons and organizations to notify individuals whose personal information has been "breached." BNLs generally apply to any entity which possesses certain classes of personal information, such as social security numbers or account numbers. The usual elements of a breach are as follows, with common variations in parentheses:1. (Reasonable likelihood of) Unauthorized and Bad Faith 2. Acquisition of3. Unencrypted or Unredacted 4. (Computerized) Personal Information, 5. (Which is likely to cause harm).Absence of one or more of these elements will defeat the notification requirement, whereas mere knowledge of a potential breach will often trigger a duty to investigate.[1]With the exception of certain health information breaches, [2] breach notification requirements are not yet Federalized.

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How to Write an ARRA Breach Notification Letter

Note:This article originally appeared on the Jeffrey Neu Blog.

“We’ve had a breach.” It’s a sentence nobody wants to hear, but when it happens to you, what to you do? If you’re in the healthcare industry, new federal regulations probably require you write a letter to the victims of the breach, or more. When and how quickly do you have to send a HIPAA/ ARRA notification? And what does it have to say?

The American Recovery and Reinvestment Act of 2009 (ARRA) requires HIPAA-covered entities to notify breach victims when protected health information has been disclosed to an unauthorized person. The legislation gives liberal exceptions for good faith and inadvertent disclosure. Redaction or encryption is an absolute defense to a breach.

“Protected Health Information” is any stored or transmitted health information which can be tied to an individual. It may include information not directly related to health, such as a full name, social security number, date of birth, home address, account number, or disability code. The law also requires third-party contractors or “business associates” to report breaches to the covered entity.

When a breach occurs, the covered entity must notify victims and the Secretary of Human Services “without unreasonable delay,” and within 60 days of the discovery of the breach. The covered entity must notify the individual directly if possible (ie, by mail), and must also post a notice on its website if the breach involves 10 or more victims who are not directly reachable. If the breach involves more than 500 residents of a single state, the covered entity must also notify statewide media.

A breach notification letter must meet differing but complementary legal and economic goals. They include:

  1. Complying with law
  2. Minimizing Losses


Compliance with Law

Complying with the law is straightforward. In addition to the requirements above, the notification must include a brief description of the incident, including the following information:

  • Date of the breach;
  • Date of discovery;
  • Description of the types of protected health information breached;
  • Steps individuals should take to protect themselves from potential harm resulting from the breach;
  • A brief description of the investigation, efforts to minimize losses and prevent future breaches;
  • Contact information for individuals who wish to ask questions or learn more information, including a toll-free phone number, e-mail address, website, or postal address.


Repairing your Company’s Image

Avoid the natural tendency to clamp up. Of course, the best way to protect your company’s image is to keep bad news out of the public eye. But once the cat’s out of the bag, several studies indicate that more than two-thirds of economic losses arising from a data breach are due to brand diminishment and lost customer trust, rather than litigation or identity theft expenses.

Above all, your company must maintain credibility. Be honest, open, and share enough detail to convince an educated person that you know what you’re talking about, and that you’ve actually fixed the problem. Consider hiring an outside security consultant who can 1. Give you genuine feedback on your security practices, and 2. Vouch for your credibility when you say that your customers are safe.


Rebuilding Customer Trust

Consider your last trip to the Department of Motor Vehicles. It probably consisted of waiting for hours in multiple serpentine lines without any direction, followed by more waiting, followed by spending money. The best part is riding away in your car when you’re done. Surprisingly, Disneyland and the DMV have a lot in common: Long lines, spending money, and rides. What sets the DMV apart from the happiest place on earth? One important ingredient is Customer Empowerment.

One way the Disney folks empower customers is by posting periodic signs in long lines: “Wait Time: 45 minutes from this point.” Though the sign does not decrease wait time, it informs and empowers customers. And as Disney knows, empowered customers are happy customers. Frustrated, angry customers are far more likely to cause trouble or leave altogether.

The best way to rebuild your customers’ trust is to empower them. Too many breach notifications include the unhelpful statement, “We have no reason to believe that anyone has accessed or misused your information.” The statement is faulty because it does not empower the customer to take action. Also, if the statement isn’t completely true, or if it changes in the future, it may inadvertently induce liability under certain circumstances. Further, these types of statements tend to frustrate rather than empower customers, causing some to conclude that the notification is incomplete or disingenuous.

Instead, consider these options:

  • Say, “Although we have no reason to believe that anyone has accessed or misused your information, if you think your personal information has been misused as a result of this breach, please call 1-800-XXX-XXXX so we can investigate…”
  • Include statistics on typical rates of harm for similar breaches, where possible.
  • Actually investigate the breach.
  • Create a website where customers can get up-to-the minute updates on the investigation directly from you, rather than from the media (and update it after the media buzz has subsided).


Mitigating Civil Liability

ARRA does not expressly create a private right of action for a HIPAA breach. Other theoretical sources of liability exist, though. For example, an individual may be able to rely upon a notification statute as the basis for a suit alleging negligence per se, where the breach of the duty to notify causes proximate harm to the plaintiff. Next, failure to correct statements (such as privacy policies) which have become false or misleading in light of new events, may create a tortious cause of action if the company fails to warn customers about foreseeable risks to personal information.

In contrast, most breaches are not likely to create privacy liability. Privacy tort actions usually require the breached information to cause extreme emotional distress, or a dilution of the property value of reputation or prestige. In addition, most courts have consistently failed to force companies to pay for credit monitoring services unless:

  1. A person has become an actual victim of identity theft.
  2. The person has found the thief
  3. The person can prove that the thief’s copy of their SSN or other personal information came from the breaching entity, and
  4. The person proves that the entity had a legal obligation to keep that information private.

Instead, it’s important to remember that businesses stand to loose more money from brand diminishment and lost customer trust than from litigation.

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Stimulus Package Federalizes Health Information Breach Notifications

Note: This article was originally posted on JeffreyNeu.com.

Streamlining medical records has been a recurring theme of the Obama administration. Tucked away in the pending economic stimulus legislation, known as the American Recovery and Reinvestment Act (ARRA), is a provision which would create a breach notification requirement for health information breaches.

Starting in Subtitle D, ARRA takes an unprecedented foray into federalizing data breach notifications. Although ARRA regulates breaches of health information, this legislation will no doubt be front and center of future debates about creating a Federal Breach Notification Law.

Synopsis

Here is a quick analysis: ARRA mirrors most state breach notification laws, in that it requires “covered entities” (ie, Health Plans, Health Care Providers, and Health Care Clearinghouses) to notify each individual if their “unsecured protected health information has been, or is reasonably believed by the covered entity to have been, accessed, acquired, or disclosed as a result of [a] breach.” Business Associates, or subcontractors, must alert the Health Care Provider of a breach. The statute also places additional limits on how health information can be sold and shared.
The statute dramatically broadens the ambiguous state-law concept of “data owners,” and applies to any HIPAA-covered entity that “accesses, maintains, retains, modifies, records, stores, destroys, or otherwise holds, uses, or discloses unsecured protected health information.”

As expected, the Federal law takes a lowest-common-denominator approach to duties. For example, although notifications must be made “without reasonable delay,” the statute allows up to 60 calendar days to comply. This is substantially longer than the longest state requirement, which requires notification within 45 days.
Each state notification law requires direct (ie mail) notification to affected individuals unless the person can’t be found, and allows “Substitute Notice” in cases of large breaches. “Substitute Notice” usually comprises posting an announcement on the organization’s website and notifying the media. Some states do not permit Substitute Notice unless the breach is extremely large (250,000+ in some cases). But ARRA allows substitute notice if the breach involves just 500 people in a single state.

The statute also reaches well beyond traditional “covered entities” to any service provider or vendor of personal health records. Presumably, this would include data warehouses like Google or Microsoft, each of which has or has announced plans to create online consumer health records warehouses. However, these vendors need only report the breach to the FTC, which will treat it as a deceptive trade practice. Individuals should not expect a letter from Google or Microsoft if their health care records are breached.

On one hand, this federal legislation will plug holes in several states statutes by regulating health information. Arizona, California, Hawaii, Michigan, Oregon, and Rhode Island, for example, regulate health care providers and insurers differently from other companies, and may even completely exempt them from notification requirements.

This bill will no doubt spur the national discussion about breach notification laws. But because they mimic existing state laws, the bill comes up short. Breach Notification Laws were a step in the right direction when California passed the first one almost seven years ago. But since that time, they have displayed several shortcomings, which I critique here. Instead of fixing these problems, ARRA will exacerbate many of them.

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