The Mechanics Of Breach Notification

The vast majority of states and territories in the U.S. have rules requiring organizations managing personal information to notify affected parties if their private information has been breached. In my previous blog, I summarized the similarities and differences between what constitutes personal information in various states and which laws apply. In this post, I'll talk about what a breach is and what needs to happen when a breach occurs.

What Constitutes A Breach?
Understanding the definition of a breach will enable you to both protect your data and ensure that you don’t waste your time reporting breaches when one hasn't happened. State laws are relatively consistent with their definitions of breach. Here’s a condensed version of the definition in Massachusetts General Law 93H:

The unauthorized acquisition or unauthorized use of unencrypted data or encrypted electronic data and the confidential process or key protecting it that creates a substantial risk of identity theft or fraud against a resident of the commonwealth

The key points of the definition are that the identity data needs to be unencrypted or able to be decrypted by the attacker, and the breach must pose a threat of identity theft or fraud. This means that the theft of encrypted tapes or encrypted files from a laptop do not constitute a breach. That is, unless the encryption key happened to be stored with the data. It also suggests that organizations should encrypt their data to avoid breaches.

The language about risk makes it clear why the law (and other state laws) call out the following exception:

A good faith but unauthorized acquisition of personal information by a person or agency, or employee or agent thereof, for the lawful purposes of such person or agency, is not a breach of security unless the personal information is used in an unauthorized manner or subject to further unauthorized disclosure

This means that transmission of the personal information to a partner in error or some other innocent act without unuauthorized use or disclosure is also not considered a breach.

Who Do You Notify And How?
The mechanics of notification differ slightly from state to state, but, typically you need to notify the attorney general, the affected party, and usually law enforcement. The method for notification varies, as well, but the typical approach is to require written notice or a "substitute notice" if the cost of notification is extreme. In Massachusetts, extreme costs are over $250,000, if the number of residents affected exceeds 500,000, or the organization has sufficient contact information for the victims.

Substitute notice requires the organization to do all of the following:

(i) electronic mail notice, if the person or agency has electronic mail addresses for the members of the affected class of Massachusetts residents;

(ii) clear and conspicuous posting of the notice on the home page of the person or agency if the person or agency maintains a website; and

(iii) publication in or broadcast through media or medium that provides notice throughout the commonwealth Notification: an expensive problem

As you can see from this description, notification is an expensive endeavor. However, it can be made much less expensive if you plan. Knowing the data affected, whom you need to contact, how to reach them, and what needs to be communicated can take a long time. Now, it would be best if you could avoid breaches altogether, but they happen every day, and they need to be dealt with.

Richard Mackey is vice president of consulting at SystemExperts Corp.