The Cost of Data Theft

The pice to Fix Data Theft: $7 Million and Counting
The theft of 57 unencrypted hard drives from BlueCross-BlueShield of Tennessee has given thieves access to personal data on upwards of 500,000 customers and is costing millions to fix, PCWorld reports. The drives contained recordings of more than one million customer support calls as well as 300,000 screen shots, which in some cases included names, birthdates and Social Security numbers. BlueCross is now auditing its security practices, the report states. The process of investigating the breach and notifying customers has cost more than $7 million so far. According to Michael Spinney of the Ponemon Institute, while the average data breach costs $6.75 million, the company could be paying much more due to the complexity of the breach.

FTC to Appeal Red Flags Exemption for Attorney Firms

FTC Set to Appeal the Red Flags Rule Exemption for Attorneys and Law Firms

On February 25, 2010, the Federal Trade Commission filed a notice that it is appealing the D.C. District Court’s December 28, 2009 judgment in favor of the American Bar Association in American Bar Association v. FTC. The District Court’s summary judgment held that the FTC’s Identity Theft Red Flags Rule (“Red Flags Rule” or the “Rule”) does not apply to attorneys or law firms. The Rule implements Sections 114 and 315 of the Fair and Accurate Credit Transactions Act. In relevant part, the Rule requires creditors and financial institutions that offer or maintain certain accounts to implement an identity theft prevention program. The program must be designed to detect, prevent and mitigate the risk of identity theft. Prior to the district court’s decision, the FTC had taken the position in publications and numerous panels that attorneys and law firms meet the Rule’s definition of “creditor” because they allow clients to pay for legal services after the services are rendered.

View the FTC’s notice of appeal notice last week stating its intention to appeal the court's judgment notice
http://www.huntonprivacyblog.com/uploads/file/ABA_v__FTC_Notice_of_Appeal.pdf

Iowa Victims Fear Identity Theft

Thousands of Iowa residents fear they could become victims of identity theft after the state's Racing and Gaming Commission licensing database was hacked during routine Internet maintenance last month, the Des Moines Register reports. The FBI is investigating the breach of the database, which includes the names, addresses, dates of birth and Social Security numbers of 80,000 current and former casino and racetrack employees. Experts say those whose information was compromised have every reason to be concerned. Citing examples of financial and medical identity fraud, California-based attorney Mari Frank said, "the sky is the limit as to what could happen...

Can anyone think of a reason to NOT have identity theft protection and restoration services when this sort of thing can and does happen almost daily? There is only one such service that provides complete restoration for all types of identity theft issues. The one I am proud to represent.

Top Five Mistakes of Privacy Training Programs

I won't prattle on about the breach of 50,000 Californians' SSNs along with their names and addresses inadvertently sent out last week by the Cal Dept of Health. The envelopes actually had the SSNs printed on the envelopes sent to some 50,000 recipients of health care aid. Anyone who can't reach out to their own comprehensive identity theft restoration service and avoid identity theft and the fallout from records entries should be ashamed.

Instead I will report the following...
Good intentions aside, many companies are missing the opportunity to effectively train employees on data protection. "Many corporations have adopted a check-box approach toward compliance" with the obligations set out in various data protection regulations, says Jay Cline, CIPP, in a Computerworld article. Cline says common mistakes that companies make include separating rather than melding privacy, security and records management and ethics training; using too few communications channels; and failing to measure training effectiveness. "Employee training is probably the most important component of an information risk management process," he writes. "Yet few companies actually measure..."
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Mortgage Broker Fined

I recently had a conversation with a mortgage broker that was not aware of the importance of security is to client transactions other than a vague awareness of the risk of identity theft. There are numerous business sectors that simply do not understand their responsibilities and liability when it comes to protecting their clients' personal information. Chief among them are mortgage and legal professionals.

A mortgage broker charged with improperly disposing of consumers' personal financial records has paid a $35,000 settlement to the Federal Trade Commission (FTC). Gregory Navone, of Las Vegas, disposed of about 40 boxes of sensitive consumer records in a public dumpster, according to the December 2008 FTC complaint. The records included tax returns, mortgage applications, bank statements, photocopies of credit cards and drivers' licenses and at least 230 credit reports. The settlement also requires Navone to employ an information security program for sensitive consumer information, and to hire an independent, third-party security professional to conduct compliance audits annually for the next 10 years.

What is Identity Theft?

With all of the articles about breaches, including the ones I have posted, sometimes it is important to get back to basics about identity theft itself. Below is an excerpt from a PC World article published yesterday which outlines the definition of identity theft as it has evolved.

"Identity theft happens when your personal information is accessed by someone else without your explicit permission."• "Identity fraud occurs when criminals take that illegally obtained personal information and misuse it for their financial gain, by making fraudulent purchases or withdrawals, creating false accounts, or attempting to obtain services such as employment or healthcare. Personally identifying information such as your Social Security number, bank or credit card account numbers, passwords, telephone calling card number, birth date, name, address and so on can be used by criminals to profit at your expense."• "Almost 10 million Americans learned they were victims of identity fraud in 2008, up from 8.1 million victims in 2007.

"Identity theft also falls into this category [of financial fraud]; cases classified under this heading tend to be those where the perpetrator possesses the complainant's true name identification (in the form of a Social Security card, driver's license, or birth certificate), but there has not been a credit or debit card fraud committed."

"Just Another Data Breach"

Data breaches have become so ubiquitous that more often than not they go unnoticed, and often unreported.
I wonder how any victims of identity theft resulting from those breaches feel? While it is reported here that the number of breaches is on a decline the number of breached records is increasing and the number of ID theft victims holds steady. vIts all in the numbers.

ITWire.com reports that the number of data breaches reported to the media has declined significantly over the past 18 months. The article cites an Open Security Foundation blog post that says the number of breaches reported in global media has dropped from about 1,000 per month between 2005 and 2008, to about 500 per month. The blog speculates that boredom in the press may be a cause. "Just another data breach" isn't news anymore, the report states.
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