State data breach notification law mishmash would get worse with proposed NC and SD legislation — is instant notification by clairvoyant next?

electrical-cable-mess-2654084_1920The push for a single uniform national data breach notification law gained strength in the wake of the Equifax breach. Now proposed legislation in North Carolina would amend its law in a way that would add momentum to this push. And, now South Dakota is tired of being one of only two states without a breach notification law and wants to abandon Alabama and join the other 48 states by getting a law of its own.

See Why Do Data Breach Disclosures Take So Long? Let’s Ask the SEC Chairman

North Carolina, in a never-ending race to see which state can come up with the most impractical breach notification law, has proposed legislation that would (1) now requiring that companies notify consumers and the state Attorney General of data breaches within 15 days; and (2) adopt the HHS’ view under HIPAA that a ransomware attack is a data breach that requires notification and reporting. You can read more details about the new law here, but this is enough to help you see why even this Texan believes we need a federal breach notification law in place before some state requires instantaneous notification of consumers by a clairvoyant.

South Dakota’s proposed legislation is at least generally consistent with the existing laws of many of the other 48 states. It would require companies to notify its residents whose personal or protected information was, or is reasonably believed to have been, acquired by an unauthorized person, within 45 days from the discovery or notification of the breach. Breaches affecting more than 250 of its residents would require notifying the state’s Attorney General as well. You can read more details about the proposed law here.

Under the proposed laws for both the North Carolina and South Dakota, the failure to comply with the breach notification requirements would be a violation of the respective states’ deceptive trade practices laws.

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

 

Happy Data Privacy Day!

WHAT ARE YOU DOING TO OBSERVE IT?

Data Privacy DayToday is Data Privacy Day! If you have been wondering “what is Data Privacy Day?” then this is your lucky day because not only is today Data Privacy Day, but here is the answer and an explanation for why it really matters to you and your company’s future success.

What is Data Privacy Day?

Data Privacy Day is observed every year on January 28 and is led by the National Cyber Security Alliance (NCSA), a nonprofit, public-private partnership dedicated cybersecurity education and awareness. According to the NCSA,

DATA PRIVACY DAY IS AN INTERNATIONAL EFFORT TO EMPOWER AND EDUCATE PEOPLE TO PROTECT THEIR PRIVACY AND CONTROL THEIR DIGITAL FOOTPRINT.

DATA PRIVACY DAY BEGAN IN THE UNITED STATES AND CANADA IN JANUARY 2008 AS AN EXTENSION OF THE DATA PROTECTION DAY CELEBRATION IN EUROPE. DATA PROTECTION DAY COMMEMORATES THE JANUARY 28, 1981, SIGNING OF CONVENTION 108, THE FIRST LEGALLY BINDING INTERNATIONAL TREATY DEALING WITH PRIVACY AND DATA PROTECTION. DATA PRIVACY DAY IS NOW A CELEBRATION FOR EVERYONE, OBSERVED ANNUALLY ON JANUARY 28.

DATA FLOWS FREELY IN TODAY’S ONLINE WORLD. EVERYONE – FROM HOME COMPUTER USERS TO MULTINATIONAL CORPORATIONS – NEEDS TO BE AWARE OF THE PERSONAL DATA OTHERS HAVE ENTRUSTED TO THEM AND REMAIN VIGILANT AND PROACTIVE ABOUT PROTECTING IT. BEING A GOOD ONLINE CITIZEN MEANS PRACTICING CONSCIENTIOUS DATA STEWARDSHIP. DATA PRIVACY DAY IS AN EFFORT TO EMPOWER AND EDUCATE PEOPLE TO PROTECT THEIR PRIVACY, CONTROL THEIR DIGITAL FOOTPRINT, AND MAKE THE PROTECTION OF PRIVACY AND DATA A GREAT PRIORITY IN THEIR LIVES.

14 Tips For Keeping Your Company’s Data Secure

In honor of Data Privacy Day, the International Association of Privacy Professionals (iapp) has posted an article with 14 tips you need to consider when evaluating how to keep your company’s data secure:

  1. Know Thy Data. Determine what data you collect and share. Classify it according to its level of criticality and sensitivity. What could be considered PII? Define whether data is “in use,” “in motion” or “at rest.” Know where the data is physically stored.
  2. Terms and Conditions May Apply. Make sure your privacy policy reflects current data practices (see Tip #1). This includes the use of third-party advertisers, analytics, and service providers. Periodically review and confirm these third parties comply with your written policies.
  3. You Don’t Know What You’ve Got Till It’s Gone. Conduct annual audits to review whether your data should be retained, aggregated or discarded. Data that’s no longer used needs to be securely decommissioned. Create a data retention policy dictating how long you keep information once it’s fulfilled its original purpose. And, of course, continually ask whether that purpose is still valid and relevant.
  4. Practice or You’ll Breach. Forged e-mail, malvertising, phishing, social engineering exploits and data snooping via unencrypted transmissions are on the rise. From simple controls to sophisticated gears, make sure you’ve implemented leading security “best practices.”
  5. AYO Technology! Data Loss Prevention (DLP) technologies identify vulnerabilities of potential exposures. These work in conjunction with existing security and antivirus tools. From early warnings of irregular data flows to unauthorized employee access, DLP solutions help minimize and remediate threats.
  6. BYOD Is Like a BYOB House Party. The lack of a coherent bring-your-own-device (BYOD) program can put an organization at risk. User devices can easily pass malware and viruses onto company platforms. Develop a formal mobile device management program that includes an inventory of all personal devices used in the workplace, an installation of remote wiping tools and procedures for employee loss notification.
  7. Insist on a List. To mitigate the grave impact on your organization, inventory key systems, access credentials and contacts. This includes bank accounts, registrars, cloud service providers, server hosting providers and payroll providers. Keep this list in a secure yet accessible location.
  8. Forensics – Don’t Do This at Home. The forensics investigation is essential in determining the source and magnitude of a breach. This is best left to the experts as it’s easy to accidentally modify or disrupt the chain of custody.
  9. Where the Logs At? Logs are fundamental components in forensics analysis, helping investigators understand what data was compromised. Types of logs include transaction, server access, firewall and client operating system. Examine all logs in advance to ensure correct configuration and time-zone synchronization. Routinely back them up; keep copies, and make sure they’re protected.
  10. Incident Response Team to the Rescue! Breaches are interdisciplinary events requiring coordinated strategies and responses. The team should represent every functional group within the organization, with an appointed executive who has defined responsibilities and authority. Establish “first responders” available 24/7 (hackers don’t work a 9 to 5 schedule).
  11. Get Friendly With the “Fuzz.” Reach out to law enforcement and regulators prior to an incident. Know who to contact so you won’t have to introduce yourself in the “heat of the battle.” When you have bad news to report, make sure they hear directly from you (a courtesy call goes a long way). Don’t inflame the situation by becoming defensive; focus on what you’re doing to help affected parties.
  12. Rules, Rules, Rules. Become intimately familiar with the international, domestic and local regulations that specifically relate to your organization. The failure to notify the appropriate governmental body can result in further inquiries and fines.
  13. What Did You Say? A well-executed communications plan not only minimizes harm and potential legal consequences, it also mitigates harm to a company’s reputation. Address critical audiences and review applicable laws before notifying. Tailor your message by geographic region and demographics. Knowing what to say is just as important as knowing what NOT to say.
  14. Help Me Help You. Customers want organizations to take responsibility and protect them from the potential consequences of a breach. The DIP should include easy-to-access remedies that offset the harm to affected parties.

Here is a link to the full post: How to Lose Your Data in 10 Days

The 14 tips are a great place to start when thinking about securing your company’s data. As shown by the recent data breaches that have hit Target, Neiman Marcus, Michaels, and Barnes & Noble, the question is no longer one of if your company will have a data breach, but when.

When Your Company is Breached, Your Preparation Will Be Vital to the Company Surviving the Crisis

A data breach is a crisis situation for any company–especially given the amount of attention data breaches are getting these days. From a very big picture perspective, there are two goals to strive for when a company responds to a data breach: (1) avoid, or at least mitigate, any legal and regulatory trouble; and, (2) more importantly, minimize the impact of the breach on the company’s overall business. (see related data breach discussions) The only way your company can achieve these goals is to be proactive by getting prepared before the inevitable occurs–the breach.

If your company is prepared, it is in a much better position to minimize the loss of data, be better able to respond to the breach, and demonstrate to the legal and regulatory authorities that it acted reasonably in protecting its data, which can be very helpful in minimizing the legal and regulatory repercussions, which is the first step. By being prepared and better able to address the first step, the company is then able to focus more of its efforts on polishing its response to be more palatable for its customers and better addressing their feelings and concerns. In other words, if the company is prepared, it is not panicking and scrambling just to get out a response–any response–but instead can take the time to analyze the situation through its customers’ eyes and provide a much better response that takes their feelings and concerns into consideration. This is the vital step because this is what helps preserve the company’s customer relationships.

The best way to be prepared for this is for your company to have a thorough and custom data breach incident response plan. The data breach incident response plan should be tailored to fit your company in many ways, including the following ways just to name a few:

  • the nature of your company’s culture, both internally and externally
  • the nature of your company’s customers
  • the nature of your company’s products or services
  • the nature of your company’s operations and management structure
  • the type, volume, and sensitivity of the data your company collects and retains
  • the security measures your company has in place
  • the resources your company has to devote to data security issues
  • the security standards of your company’s particular industry

Could you figure these things out on your own, with enough time and effort? Probably so — but would that really be efficient? More importantly, and I can not over-emphasize this point enough: You need an attorney to assist you with many of these things because, when done under the guidance of an attorney and if the proper formalities are observed, much of the process can be protected by the attorney-client privilege, but not if you don’t have an attorney assisting with the process.

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Shawn Tuma (@shawnetuma) is a business lawyer with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Partner at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Helpful FTC Guidance on Cybersecurity for Small and Midsize Companies

FTCIt is important for all companies — especially small and midsize companies — to have a basic understanding of what the FTC considers to be reasonable cybersecurity. The FTC is known for being one of the more aggressive regulators that are investigating and enforcing (what it views as) inadequate cybersecurity by companies doing business in the United States. In the watershed case solidifying the FTC’s authority to regulate companies’ cybersecurity under the FTC Act, F.T.C. v. Wyndham Worldwide Corp.,  the U.S. Third Circuit Court of Appeals looked to resources published on the FTC’s website and found that Wyndham’s cybersecurity was very rudimentary and contravened recommendations in the FTC’s 2007 guidebook, Protecting Personal Information: A Guide for Businesses.

The FTC recently published a couple of helpful resources on its website and companies of all sizes would be well-served to spend some time reviewing the recommendations in these resources:

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Allscripts EHR Ransomware Attack is Huge–How Will it Impact Healthcare Practices?

OCR LogoSee recommendations below

On January 19, 2018, cybercriminals were successful in a ransomware attack on Allscripts, an electronic healthcare record (EHR) provider for healthcare providers across the United States. The attack encrypted some of Allscripts systems and prevented those healthcare providers who use those systems for their EHRs from being able to access their patient records. Not only is there the obvious impact this has had on those healthcare providers’ ability to treat their patients, but also, under HIPAA, the Office of Civil Rights presumes that all cyber-related security incidents where protected health information was accessed, acquired, used, or disclosed are reportable breaches unless certain criteria are satisfied. (See checklist in this post and this post for further explanation).

TMLT LogoThe Texas Medical Liability Trust (TMLT)’s blog post, Allscripts EHRS Falls Victim to Ransomware Attacks, goes into much greater detail in describing the facts of this event and what has taken place since the initial attack. The blog also provides an excellent analysis of the Business Associates considerations in a situation such as this and the post features several important recommendations for what practices need to do now from my friend and excellent cybersecurity and data privacy attorney Adrian Senyszyn (LinkedIn) and myself. So, what are you waiting for, go read the TMLT post … and hope and pray that you planned ahead and have cyber insurance!

See Also:

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Y2K18? Are #Spectre and #Meltdown the Y2K Apocalypse, Eighteen Years Late?

Hear Shawn Tuma interviewed on News Radio 570 KLIF – Experts: Update Settings and Download Updates to Protect from “Meltdown” and “Spectre”

CLICK HERE if you are impatient and only want to know what you should do ASAP to protect against Spectre and Meltdown

With Y2K we had a warning. So much of a warning that it pushed me into cyber law in 1998. We were told of an apocalypse if we did not heed the warning and fix the problem. Whether we did, or whether it was a lot of hype is still being debated, but the problem was averted. When the ball dropped on NYE 2000, the planes were still flying, power grid still operating, and banks still banking.

Fast forward eighteen years, NYE 2018, the ball drops and, while we are closing out a year when the word cybersecurity (yes, it is one word, not two) has become a part of everybody’s vernacular, the only thing we were thinking of when hearing the words “Spectre” and “Meltdown” was a James Bond movie marathon on New Year’s Day.

Just a few days later we are now talking about a global threat to the world’s computers — all of them from the most powerful supercomputers to, yes, even Apple computers, all the way to the computer you carry in your pocket (i.e., your smartphone) — that isn’t just a programming or software glitch, but is also a hardware problem, going to the very heart of the computer: it’s CPU.

The threat timing? Imminent — this isn’t something that is going to happen, this is something that has already happened and has just recently been discovered.

Now unlike with Y2K, the problem in and of itself will not directly cause a failure but is a vulnerability that has been exposed that will allow others — the bad guys (whoever they may be) — to exploit the vulnerability. But take no comfort in this because you can bet, to the bad guys, the revelation of this vulnerability made this exploit Target of Opportunity #1 for all.

The fix? This where it gets good. “Meltdown” can likely be mitigated with software patches, which programmers at major companies are fervently writing as I write. The problem is, these patches will lead to a degradation of computer performance by 20% to 30% — but they are not optional. You must install them.

“Spectre” is where it could get really nasty. This will likely require a redesign of the computer processors themselves — a wholesale hardware redesign that focuses more on security vis-a-vis performance. Then, in order to implement the fix, the hardware will have to be replaced — the CPUs in all of the world’s computers upgraded.

Sounds pretty bad, doesn’t it? Is this the real Y2K apocalypse arriving eighteen years late — Y2K18 or Y2K8teen? It could be.

But, if history is any indication it will not reach worst-case scenario levels, but things could still get really, really bad even if worst-case scenarios are not even on the radar. In fact, as this post is being written some researchers with clout are saying that the fix may not require the wholesale replacement of hardware — and I’m sure there will be more softening of this as we go along.

However, remember, “Wanna Cry” was only one exploit to a specific outdated Windows operating system that was revealed and had a patch issued for months before it actually hit. We all had better take this one seriously.

What can you do? When the patches come out from Microsoft, Apple, etc. and they tell you to install the patch to protect your computer, do it, immediately, and with a smile because losing 20% to 30% of your computing power is far better than losing 100%!

The Most Positive Cybersecurity Trend I Have Seen in Nearly 20 Years!

business-1989131_1920In the last quarter of 2017, I have observed a cybersecurity trend that has given me more hope than any that I have seen previously. Let me explain.

As an attorney, I have been practicing what can generally be described as cyber law or cybersecurity law since 1999, which means that my practice has evolved a lot over the years. It also means that I have seen a lot over the years.

My practice has been divided into three distinct areas over the last several years:

  1. Proactively, by helping clients assess and understand their overall cyber risk and then developing, implementing, and maturing a strategic cyber risk management program that prioritizes their efforts to help minimize their cyber risk.
  2. Reactively, by leading companies through the cyber incident response and data breach response process (e.g.,  as a “breach guide” or “breach quarterback”) and regulatory investigations and enforcement actions.
  3. Reactively, by representing clients in litigation involving cyber-related claims like data loss, data theft, computer hacking, and business to business disputes concerning responsibility for cyber incidents.

For nearly twenty years, the number of clients that have hired me to help in a reactive role, such as with incident response and litigation of cyber claims, has towered above those who have sought my help for proactively assessing their cyber risk and developing and implementing a cyber risk management program. It has not even been close.

This has not been due to a lack of effort on my part. I have always done my best to encourage clients to be responsible when it comes to cybersecurity by being proactive and focusing first on risk management and prevention but this has generally fallen on deaf ears. They did not want to be cyber responsible — or, even if they did want to be, they were not willing to invest resources into being cyber responsible.

But in the last quarter of 2017, this has changed.

The trend that I have observed developing over the last Quarter of 2017 is outstanding! For the last few months I have had substantially more clients hire our firm for helping them with a proactive cyber risk management program than we have ever seen in the past, so much so that the amount of work we are now doing on these programs is equal to or greater than the amount of work we are doing on incident response and litigation.

What makes this trend so great? The answer is simple: it shows that companies are finally starting to get it! They are finally seeing that it is better for them to invest resources into proactively preventing cyber incidents and data breaches from happening than it is to sit back and wait with the only strategy being to hope that it will not happen to them — because it will happen to them if they do nothing to stop it.

I hope that the trend that I am seeing is consistent across the industry. If it is, we just may be turning the corner in the war on cybercrime that is destroying our companies and decimating our individual privacy.

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.

Complimentary Webinar: Countdown to #GDPR – Compliance for Non-EU Companies

Countdown to GDPR Compliance is a complimentary webinar that I will be moderating on Thursday, December 7, 2017, at 12:00 PM Central.  This is the second webinar in a three-part series sponsored by Mackrell International and will focus on Compliance for Non-EU Companies. You don’t want to miss it!

Moderator: Shawn Tuma
Presenter: Marta Stephanian, Ten Holter/Noordam
Presenter: Henrik Nilsson, Wesslau Söderqvist Advokatbyrå

 

COUNTDOWN TO GDPR COMPLIANCE: Compliance for Non-EU Companies
Sponsored by Mackrell International
Thursday, December 7, 2017 @ 12:00 PM CT
LINK for more information
Register via email: GDPR@hogefenton.com

GDPR Invite 2 11_21

I hope you are able to attend the webinars and find the information helpful in your business. As always, please let me know if you have any questions or if I can help you.

Shawn E. Tuma | Scheef & Stone, L.L.P.
Cybersecurity & Data Privacy Attorney
2600 Network Blvd., Suite 400, Frisco, TX 75034
214.472.2135 (direct) | 214.726.2808 (mobile)
Email: shawn.tuma@solidcounsel.com
Firm: www.solidcounsel.com
Blog: www.businesscyberrisk.com

National data breach notification law proposed by Senate Commerce Committee members (includes jail?)

Three Democratic senators introduced legislation Thursday requiring companies to notify customers of data breaches within 30 days of their discovery and imposing a five year prison sentence on organizations caught concealing data breaches.

https://www.cyberscoop.com/national-data-breach-notification-law-bill-nelson-uber-equifax-hack/

Tips for Staying #CyberSecure While Shopping Online for #CyberMonday

Cybercriminals need shopping money for the Holidays and one of their favorite times to get yours is when you are shopping on #CyberMonday.

Use these tips to help stay #cybersecure while shopping online for #CyberMonday and at any other time:

  1. Credit or debit? Use credit cards, not debit cards, for your online shopping. Debit cards are tied directly to your bank account so if there is a problem, your money is gone. With credit cards, it is borrowed money, plus, if you have a problem with the merchant or order, the credit card company can act as your intermediary in the dispute. If possible, have one credit card that is used solely for online shopping in case you need to cancel it.
  2. Secure Internet connection. When shopping online, it is best to avoid free WiFi or other forms of open WiFi in public locations. When you are out, it is best to use your own data plan or, if you must use public WiFi, use a VPN to help minimize the risk of having your information stolen.
  3. Credible merchants. Only shop at online merchants that are credible and well-established. Anyone can put up a website in a short amount of time, make sure you know you’re dealing with a trusted merchant with a history of doing business.
  4. Scams – too good to be true (merchants). Be wary of deals that seem too good to be true and do not get too greedy because if a “deal” seems that good, it almost certainly is and the person behind the scam is either outright stealing your money or they are trying to steal your information.
  5. Saving information with merchant. While it is more convenient to save your personal information and payment information with the merchant, doing so also means that information is now stored in their database and can be compromised. It is best to not save your information with merchants.
  6. Scams – too good to be true (click here). Be wary of emails or social media posts that advertise deals that seem too good to be true and then tell you to “click here” on a link to see more information. Those are usually phishing emails that are designed for the sole purpose of getting you to click the link so they can either steal your information or deposit malware on your device. Cybercriminals can perfectly clone emails from legitimate merchants such as FedEx, PayPal, Amazon, and others so just because the email looks legit doesn’t mean it is — don’t click on the links!
  7. Scams — the sad story. While not limited to online shopping, a close relative to the “too good to be true” scam are the scams that play on your sympathy and generosity during the Holidays. An example of these is chain emails that tell of a tragedy that has befallen people and asks for donations. Criminals know how to play on our sympathies and use our emotions to manipulate us into doing things we would never do otherwise, such as sending money because someone asked for it in an email or social media post. Unless you know the people first hand, do not let your emotions overtake your judgment and stick with reputable charitable organizations with an established history.
  8. Good Cyber Hygiene. Whether for shopping on #CyberMonday or otherwise, it is best to always use good #CyberHygiene to protect yourself online. Here is a free Checklist for Good Cyber Hygiene.

For more discussion of these tips for staying safe while shopping online see 5 tips for Avoiding the Cyber Grinch this Cyber Monday! and Cyber Monday: Online safety tips from a cybersecurity expert.

SEE ALSO

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Shawn Tuma (@shawnetuma) is an attorney with an internationally recognized reputation in cybersecurity, computer fraud, and data privacy law. He is a Cybersecurity & Data Privacy Attorney at Scheef & Stone, LLP, a full-service commercial law firm in Texas that represents businesses of all sizes throughout the United States and, through its Mackrell International network, around the world.