Dark Reading is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Risk

3/9/2009
06:44 PM
George V. Hulme
George V. Hulme
Commentary
50%
50%

Do Breach Notification Laws Work? Yes

Apparently a good number of consumers who receive letters notifying them that their financial or credit card information has been breached are tossing the notifications without taking action. Does this mean these notices are worthless?

Apparently a good number of consumers who receive letters notifying them that their financial or credit card information has been breached are tossing the notifications without taking action. Does this mean these notices are worthless?I don't think so. Kim Zetter at Wired's Threat Level blog penned an interesting post covering some of the discussions at the Security Breach Notification seminar, which was held in Berkeley, Calif., this past Friday.

From Zetter's post:

And though most states now have laws requiring companies to warn breach victims, some serious breaches are still showing up on customer credit and bank statements before any official warning has been issued. It all begs the question: are the notification laws working?

Zetter then accurately details benefits of transparency brought by these breach notifications.

However, it's with this point of view that was expressed at the conference that I take issue:

Breach notifications should, theoretically, reduce the number of incidents of identity theft or fraudulent charges to credit cards if consumers take proper precautions once they receive a notification -- such as placing a fraud alert or freeze on their credit account and monitoring their account bills and statements for suspicious transactions.

But in some cases, customers discover fraudulent charges on their cards or become victims of identity theft before a company is even aware its computers have been breached, making the breach notification redundant for those consumers.

Some other points include the issue that a portion, apparently the majority, of notice recipients actually ignore the notifications.

First, just because someone notices a fraudulent transaction on a financial statement, and then later gets a breach notification letter, that does not make that notification "redundant," as it's quite reasonable to expect that most credit card users will not know where a thief got their credit card data. Was it the restaurant I was at last week? The bookstore? Gas station? Or that online purchase?

You won't know for sure. But the breach notification would certainly give you a good idea.

Second, it's possible someone would use several different credit cards at the same online retailer over a period of months. Should this be the case, it would now be a good idea (following a notification) to change the credit card number for all of the cards used at that retailer over the affected period of time.

Third, it gives consumers the option to no longer shop at that merchant.

Helping consumers avoid identity theft and fraudulent transactions is only part of the benefit of data breach notification laws. The other is that it embarrasses companies to do the right thing and get the proper security controls in place. If they don't, the world may eventually know how little care they take with their customers' information. This in itself may have helped to improve the security at many organizations. Not make it perfect, but improve it.

And any consumer who ignores these notices does so at his own peril. And if people don't take any action, such as getting a fraud alert posted, that's their fault.

Before July 2003, when the California breach disclosure law went into effect, the big argument was whether or not there really were numerous serious data breaches occurring. "Where's the proof?" naysayers would ask.

Today, thanks to these laws, at least we have that proof and know what's going on. And wise consumers can take the simple action of changing the card number used at the breach company and placing a fraud alert on their profiles at the major reporting agencies.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Commentary
Cyberattacks Are Tailored to Employees ... Why Isn't Security Training?
Tim Sadler, CEO and co-founder of Tessian,  6/17/2021
Edge-DRsplash-10-edge-articles
7 Powerful Cybersecurity Skills the Energy Sector Needs Most
Pam Baker, Contributing Writer,  6/22/2021
News
Microsoft Disrupts Large-Scale BEC Campaign Across Web Services
Kelly Sheridan, Staff Editor, Dark Reading,  6/15/2021
Register for Dark Reading Newsletters
White Papers
Video
Cartoon
Current Issue
The State of Cybersecurity Incident Response
In this report learn how enterprises are building their incident response teams and processes, how they research potential compromises, how they respond to new breaches, and what tools and processes they use to remediate problems and improve their cyber defenses for the future.
Flash Poll
How Enterprises are Developing Secure Applications
How Enterprises are Developing Secure Applications
Recent breaches of third-party apps are driving many organizations to think harder about the security of their off-the-shelf software as they continue to move left in secure software development practices.
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2021-32823
PUBLISHED: 2021-06-24
In the bindata RubyGem before version 2.4.10 there is a potential denial-of-service vulnerability. In affected versions it is very slow for certain classes in BinData to be created. For example BinData::Bit100000, BinData::Bit100001, BinData::Bit100002, BinData::Bit<N>. In combination with &lt...
CVE-2021-35041
PUBLISHED: 2021-06-24
The blockchain node in FISCO-BCOS V2.7.2 may have a bug when dealing with unformatted packet and lead to a crash. A malicious node can send a packet continuously. The packet is in an incorrect format and cannot be decoded by the node correctly. As a result, the node may consume the memory sustainabl...
CVE-2021-2322
PUBLISHED: 2021-06-23
Vulnerability in OpenGrok (component: Web App). Versions that are affected are 1.6.7 and prior. Easily exploitable vulnerability allows low privileged attacker with network access via HTTPS to compromise OpenGrok. Successful attacks of this vulnerability can result in takeover of OpenGrok. CVSS 3.1 ...
CVE-2021-20019
PUBLISHED: 2021-06-23
A vulnerability in SonicOS where the HTTP server response leaks partial memory by sending a crafted HTTP request, this can potentially lead to an internal sensitive data disclosure vulnerability.
CVE-2021-21809
PUBLISHED: 2021-06-23
A command execution vulnerability exists in the default legacy spellchecker plugin in Moodle 3.10. A specially crafted series of HTTP requests can lead to command execution. An attacker must have administrator privileges to exploit this vulnerabilities.