Data Breaches and You
May 19th, 2009
This week, 28,000 voters in Virginia received letters notifying them that their personal information had been breached via a couple of stolen laptops used for polling place registration.
Didn’t receive a letter? Don’t even live in Virginia? Don’t care?
Well, maybe not this time, but chances are that you will be a victim of a data breach at least once in your lifetime, whether you are aware of it or not. It seems that nearly every day there is a new story about a data breach, in which consumers’ personal information is stolen from a company or entity with which they’ve done business. Data breaches can be initiated by a variety of thieves, including internal employees and hackers, who most often proceed to use the collected data for fraudulent purposes and identity theft. Individual identities may then be bought and sold several times, leading to a path of identity theft destruction for the often unknowing victims of the breach.
According to the Privacy Rights Clearinghouse, which has been chronicling data breaches of all sizes since 2005, well over 261 million records have been breached in the last 4 ½ years. Check out the chronology, and be prepared to find yourself in panic mode. The list, which breaks down all large- and small-scale data breaches that are reported (note that some companies do not reveal or even discover breaches in their data), shows virtually a new breach on a daily basis. These breaches list entities such as hospitals, government branches, schools, payment processors, credit card companies, banks, and hundreds of other private companies.
Scary stuff, but what are you to do? Unfortunately, there is not a whole lot that the average consumer can do to prevent him or herself from becoming a victim of a data breach. Sharing our personal information has become a vital part of life, no matter who you are. From the moment you were born, hospitals have collected records on you. Once you receive any kind of identification card, your state and local government begins housing files full of your data. When you go to school, get a job, apply for a credit card… The list goes on and on. Every time you give an entity your information, you expect that they will house it responsibly and safely.
However, no matter how many precautions companies take to ensure that your information does not fall into the wrong hands, there are always ways for individuals to gain access. Sometimes current or ex-employees are able to collect the data on the way out the door. Other times, hackers make their way into the system to quickly sneak off with the sensitive data. Another way information often passes into the wrong hands is through lost or stolen laptops. When these unencrypted devices containing the records of all of a company’s employees and clients leave the office, they are at great risk to be picked up by the wrong hands. In fact, a recent study conducted by the Ponemon Institute on behalf of Intel showed that a stolen laptop could cost a company over $115K, 80% of which is breach damages.
In the wake of such a catastrophe, breached companies will often try to set things right for their victims by offering identity theft protection. Most of the time, this “protection” consists mainly of credit monitoring, which is only a small part of identity theft. Many identity thieves are interested in using their victims’ personal information for far more damaging purposes, such as illegal employment, fraudulent medical services, committing crimes, and much more. If you become a victim of a security breach, consider all aspects of your identity that are now put at risk, and be sure to monitor all of your personal information to guarantee that it does not fall into the wrong hands. This can be an overwhelming task, however, so there are also a variety of services that do this hard work for you, and are often worth the investment.
While technology continues to evolve, it would be optimistic to believe that data breaches will someday become preventable. Also, legislation is emerging to protect consumers from security breaches, including a set of “Red Flag Rules” that force certain companies to have procedures in place to prevent identity theft and act quickly in the case of a breach. However, the enactment of these rules continues to get pushed back (originally scheduled for last November, then this May, and now August), as companies struggle with compliance. Regardless of any rules or technological advancements, however, there will always be shady individuals that want to profit off of your good name, we can only assume that this risk is going to stick around for quite some time.
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