The most likely “cyber attack” that your company will face will come in the form of an email. One of the most common forms of email attack is the business email compromise (BEC) and the most popular time of the year for the W-2 version of BEC is right now — tax season.
Read the full blog post to make sure you and your company are equipped with answers to:
• What is a W-2 BEC Attack?
• How Do Attackers Use the W-2 Information?
• Why Do So Many of These Attacks Happen During Tax Season?
• What Can You Do Now to Protect Your Company?
• What To Do if Your Company is Hit by this Attack?
In a recent Wall Street Journal article, The Case for Protecting Small Firms from Cyber Lawsuits, the authors argue that, because smaller companies lack the resources of larger companies when it comes to protecting data, smaller companies should have legal protections to exempt them from facing the consequences of these laws.
While it seems this argument is based on a fundamental misunderstanding of the purpose of these laws, it does offer some productive suggestions and I found it interesting for another reason. The reasons the authors gave for arguing that smaller companies should be exempted from the laws are some of the same reasons I give to smaller companies when I explain why it is so important that they have appropriate cyber insurance coverage:
Small businesses have the same obligations to protect data that larger companies have.
Breach notification laws may have penalties of a certain cost per record breached, regardless of fault.
Breach notification laws may require notifying those individuals whose data was breached, that their data has been breached.
Breach notification laws may require providing identity theft protection services to the individuals whose data was breached.
Individuals whose data was breached may sue and seek recovery of damages and legal fees.
I have been practicing in the cybersecurity and data privacy areas of law for nearly two decades and have served as breach guide to hundreds of companies — one of the biggest lessons that I have learned in all of these years is that in many cases, it is not the initial incident that causes most of the harm, it is the failure to properly respond to the initial incident after learning about it that causes it to escalate.
Incident response is expensive. The legal fees, the fees for security services, forensic services, remediation, public relations, and identity theft protection, notification of consumers, and reporting to regulatory agencies — all of these things are very expensive but they are mandatory to properly respond to an incident, in most cases. When a business does not have the resources to pay these expenses, it is not able to properly respond to an incident and that is what can be most devastating of all for small and midsize businesses. That is why it is so critical that small and midsize businesses have appropriate cyber insurance coverage to step in and provide them with the resources needed to help manage and properly respond to such incidents.
Are you at IAPP – International Association of Privacy Professionals P.S.R. #PSR18 in Austin? If so, please come to our Thursday 10:30 – 11:30 session on Vendor Risk Management: Maintaining Relationships While Limiting Liability in Lone Star Ballroom A, Level 3. It should be great as I get to be with great panelists Tami Dokken and Melissa Krasnow and we will have Mark Smith as our moderator.
While you’re there pick up your copy of Bloomberg BNA’s Domestic Privacy Profile: Texas!
The 2015 Anthem data breach affected 79 million people and was the largest health-care data breach in U.S. history. The affected consumers sued Anthem in a case that settled for a record $115 million. Now the U.S. Dept. of Health and Human Services’ Office of Civil Rights has reached a settlement with Anthem for a record $16 million — an amount that is almost three times the next-largest OCR data breach settlement of $5.55 million.
While these numbers are interesting, what is the takeaway for business leaders?
It all started with an employee opening and responding to a phishing email:
Anthem discovered cyber-attackers had infiltrated their system through spear phishing emails sent to an Anthem subsidiary after at least one employee responded to the malicious email and opened the door to further attacks. (HHS Press Release)