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1/20/2012
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Breach Notification: Know The Rules

State and federal laws require notification when a breach of protected information occurs. You need to know which laws apply and how to comply

The vast majority of states and territories in the United States have rules requiring organizations managing personal information to notify affected parties if their private information has been breached.

However, the laws differ from state to state in the way they define personal information, the requirements for who needs to be notified, and how notification must take place. Add to this the fact that federal laws also require breach notification, and we see that organizations caring for personal identifying data have their work cut out for them in understanding which rules apply and how they can ensure they’ll comply in the event of a breach.

Which Rules Apply?
The key point to remember when determining which laws apply to your organization is that state laws are written to protect the residents of a state. This means you need to comply with the state laws applying to the people whose data you manage. In other words, if you have customers or employees from Massachusetts, then even though your business is located in New Hampshire, you need to comply with the Massachusetts data protection and breach notification laws.

If it seems like it a difficult task to understand and comply with upward of 50 different state and territorial laws, you get the message. It should also be clear why every year the U.S. Congress attempts to define federal data protection laws that would supersede these state laws. For better or worse, efforts at the national level have not succeeded, and we are left with the laws of the various states (in addition to the federal laws applying to financial and health information).

State breach notification laws have more in common than not. For example, these laws define personal information as a person’s first and last name, or first initial and last name, together with one or more other pieces of sensitive information. The obvious ones are Social Security number, driver’s license number, and credit card numbers. One area where differences tend to occur is banking information. For example, Massachusetts considers a bank account number (again, with a name) a piece of personal identifying information, even if there is no PIN or password that would allow a perpetrator to use the account. California, on the other hand, requires the presence of a PIN or password to make the account number a piece of protected data.

The first step in ensuring compliance with breach notification laws is knowing whose data you have. That means keeping accurate records of whose data you store, where they live, and where the data resides. Once you understand that, you can identify the laws that apply. Next, you can identify the particular pieces of information that you need to protect and understand the kind of breaches that would require you to notify the victims as well as state authorities.

In the next posting, I’ll talk about what constitutes a breach (and what doesn’t) and the mechanics of notification.

Richard Mackey is vice president of consulting at SystemExperts Corp.

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