Archives: Data Breaches

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D.C. Circuit: Data Breach Plaintiffs Plausibly Allege ‘Substantial Risk’ of
ID Theft Sufficient to Support Standing

Customers’ allegations that they face a substantial risk of identity theft as a result of a 2014 data breach are sufficiently plausible to allow their suit against health insurer CareFirst to proceed, the U.S. Court of Appeals for the D.C. Circuit held in an August 1 decision. CareFirst discovered in April 2015 — and announced … Continue Reading

Department of Justice Releases Guidance for Vulnerability Disclosure Programs

Last week, the U.S. Department of Justice (“DOJ”) released a voluntary framework for organizations to use in the development of a formal program to receive reports of network, software, and system vulnerabilities, and to disclose vulnerabilities identified in other organizations’ environments.  This framework provides private entities a series of steps to establish a formal program … Continue Reading

Working Effectively with Forensic Firms

Among the many issues that can give rise to the initial uncertainty of responding to a significant cybersecurity incident is a failure by incident response team members to understand the perspectives and priorities of other stakeholders. But this complicating factor can readily be mitigated through cross-functional education and relationship building before an incident occurs. In … Continue Reading

New Mexico Becomes 48th State with Data Breach Notification Law; Tennessee Restores Exemption for Encrypted Data

Last week, New Mexico and Tennessee both passed legislation updating each state’s requirements for notifying residents following a data breach.  New Mexico’s new law, H.B. 15, makes it the 48th U.S. state to enact a state data breach notification law, leaving Alabama and South Dakota as the only states that have not enacted similar laws.  … Continue Reading

NY Data Breaches Reached Record Levels in 2016

New York Attorney General Eric T. Schneiderman announced this week that there were a record number of data breach notices in New York in 2016, with nearly 1,300 reported data breaches exposing the personal records of 1.6 million New Yorkers.  These numbers represented a 60 percent year-over-year increase in the number of data breaches reported, … Continue Reading

Updated OMB Breach Response Policy Includes Required Breach-Related Provisions for Federal Agency Contracts

Last week, the Office of Management and Budget issued an updated breach response policy for federal agencies, replacing a policy last updated in 2007.  The policy, set forth in memorandum M-17-12, provides minimum standards for federal agencies in preparing for and responding to breaches of personally identifiable information (PII).   In addition to setting forth requirements … Continue Reading

Data Breach Allegations Sufficient for Standing After Spokeo, Court Says

On Monday, the U.S. District Court for the District of Kansas ruled that the named plaintiff for a putative class of CareCentrix employees whose personal information was compromised had alleged enough harm for standing under Spokeo, Inc. v. Robins.  The case is Hapka v. CareCentrix, Inc. In early 2016, a phishing attack compromised defendant CareCentrix’s systems, … Continue Reading

Ashley Madison Settles Data Security and Deception Charges

The FTC announced today that it has reached a settlement with the operators of AshleyMadison.com (Ashley Madison) for alleged data security deficiencies and deceptive trade practices.  According to the FTC, Ashley Madison, a dating website for married individuals, was hacked in July 2015, leading to the release of 36 million users’ account and profile information.  … Continue Reading

FTC Issues Guidance for Responding to Data Breaches

On Tuesday, the FTC issued new guidance for businesses on responding to data breaches, along with an accompanying blog post and video.  The data breach response guidance follows the issuance of the FTC’s “Start with Security” data security guidance last year and builds upon recent FTC education and outreach initiatives on data security and cybersecurity … Continue Reading

Inherited Infrastructure, Outdated Software, And Other Failings That Led To TalkTalk’s Record Fine

On October 5, 2016, the UK Information Commissioner’s Office (“ICO”) fined telecoms company TalkTalk a record £400,000 for failing to put in place appropriate data security measures and allowing a cyber-attacker to access TalkTalk customer data “with ease.”  The ICO highlighted several  technical and organizational deficiencies as justification for issuing its largest fine to-date.  Many … Continue Reading

UK Telco Loses Appeal; Should Have Reported Data Breach Within 24 Hours Of Customer Complaint, Not Fuller Investigation

By Phil Bradley-Schmieg and Gemma Nash On August 30, 2016, a major UK telecoms company (TalkTalk) lost its appeal against a fine imposed on it for failing to report a personal data breach to the UK national data protection authority (the Information Commissioner) within 24 hours of its receipt of a customer’s complaint. Commission Regulation … Continue Reading

New York State Proposes Cybersecurity Regulation for Financial Services Institutions

On September 13, 2016, New York Governor Andrew Cuomo announced a proposed regulation that would require financial service institutions to develop and implement cybersecurity programs to prevent and mitigate cyber-attacks.  The proposed regulation will be subject to a 45-day comment period once it is published in the New York State Register. The regulation will become … Continue Reading

FTC Announces it will Provide Guidance on Ransomware

The FTC has become the most recent regulator to take a closer look at ransomware and its impact on consumers. During the FTC’s September 7, 2016, Fall Technology Series on Ransomware, Chairwoman Edith Ramirez announced that the FTC will soon release guidance to businesses on how to protect against ransomware. Ransomware is a malicious software … Continue Reading

Significant HIPAA Fine Follows Business Associate’s Stolen iPhone

A new post over on Covington’s eHealth blog discusses a recent enforcement action taken by the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) against Catholic Health Care Services, a business associate under HIPAA, arising out of a stolen iPhone.  This recent enforcement action should put business associates … Continue Reading

Cyber Insurer Seeks to Void Data Breach Coverage Because of Purported Misstatements in Policy Application

Cyber insurers commonly require insureds to complete detailed applications, often including extensive technical disclosure and risk self-assessments. The complaint recently filed by the insurer in Columbia Casualty Co. v. Cottage Health System illustrates the pitfalls in these requirements. Cottage Health, an operator of a hospital network, suffered a data breach in 2013 resulting in thousands … Continue Reading

P.F. Chang’s Ruling Highlights Potential Pitfalls of Cyber Insurance

Data breaches suffered by retailers and other businesses that handle payment cards can result in substantial assessments by card brands such as MasterCard and Visa. Retailers typically do not process payment card transactions directly with the banks that issue their customers’ cards. Instead, they contract with an intermediary—called an acquiring or servicing bank—to process their … Continue Reading

Morgan Stanley to Pay $1 Million Penalty in SEC Cybersecurity Settlement

By Ciarra Chavarria and Keir Gumbs On June 8, 2016, the Securities and Exchange Commission announced that Morgan Stanley Smith Barney LLC (“Morgan Stanley”) had agreed to pay $1 million as a penalty for charges relating to its “failures to protect customer information.” Morgan Stanley’s settlement with the SEC came several months after a federal … Continue Reading

Verizon Releases 2016 Data Breach Investigations Report

Verizon recently released its 2016 Data Breach Investigations Report (“DBIR”) that outlines cybersecurity threats, vulnerabilities, and trends from 2015.  Verizon, with the assistance of more than 60 contributors, analyzed over 64,000 information security incidents (security events that affect the integrity of an information system) and 2,200 data breaches (incidents that result in the “confirmed disclosure … Continue Reading

FCC Releases NPRM on Broadband Privacy Rules

Last Friday, the Federal Communications Commission (“FCC”) released its much-anticipated Notice of Proposed Rulemaking (NPRM) setting forth and seeking comment on proposed rules to govern the privacy practices of broadband internet access service providers (BIAS providers).  Among other things, the NPRM outlines the FCC’s proposed rules for broadband privacy policies, the level of customer approval … Continue Reading

Tennessee Amends Breach Notification Law to Cover Breaches of Encrypted Information

Last week, Tennessee Governor Bill Haslam (R) signed S.B. 2005 into law, amending Tennessee’s breach notification law to broaden the scope of information covered and require quicker notifications of the state’s residents.  Most notably, when the amendments enter into force on July 1, 2016, Tennessee will become the only U.S. state that could require notification … Continue Reading

Judge Denies Neiman’s Motion to Dismiss Data Breach Class Action

A federal judge in the Northern District of Illinois has denied Neiman Marcus Group LLC’s (“Neiman”) motion to dismiss a consumer class action lawsuit arising from a December 2013 data breach at the retailer that exposed about 350,000 credit cards.  As we previously reported, the plaintiffs sued Neiman alleging various claims arising from fraudulent charges … Continue Reading

Wyndham Settles FTC Charges

Wyndham Hotels and Resorts has agreed to settle the FTC’s charges that its corporate data security practices were deficient under the unfairness prong of Section 5 of the FTC Act.  Assuming the district court approves the proposed stipulated consent order, this concludes the litigation between Wyndham and the FTC.  Under the terms of the twenty-year … Continue Reading

Cox Communications to Pay $595,000 in Data Breach Settlement

By Hannah Lepow Yesterday the FCC announced that it has entered into a $595,000 settlement agreement with Cox Communications to resolve an investigation into whether the company failed to protect its customers’ personal information when it suffered a data breach in 2014.  This is the first privacy  and data security enforcement action the FCC Enforcement … Continue Reading

Three-Bill Package Makes Revisions to California’s Data-Breach Notification Statute

By Brandon Johnson On October 6, 2015, California Governor Jerry Brown signed into law a trio of bills that is intended to clarify key elements of the state’s data-breach notification statute and provide guidance to persons, businesses, and state and local agencies that deal with electronically stored personal information.  The bills, which were passed together … Continue Reading
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