According to SC Magazine, an escalating number of victims of data breaches in 2017 have led Attorney General Josh Stein and state Rep. Jason Saine to propose updates to the state’s existing data breach notification law – “Act to Strengthen Identity Theft Protections.”

The Act would make a number of changes to the existing law, including:

  • Expand the definition of “security breach” to include “ransomware” attacks. Ransomware attacks generally result in the encryption of an organization’s system files, preventing the owner from accessing the files unless the owner buys (usually through some form of cryptocurrency) a valid encryption code from the attackers, which may never be delivered. In many cases, the malware deployed by the attackers does not enable them to access or acquire the organization’s information. However, sponsors of the law change would like the victim organization to notify both the affected consumers and the Attorney General’s office, empowering the affected person and the Attorney General’s Office to determine the risk of harm – not the breached organization.
  • Mandate reasonable safeguards. The Act would require businesses that own or license personal information to implement and maintain reasonable security procedures and practices – appropriate to the nature of personal information – to protect the personal information from a security breach. It does not appear that the new law would provide specific requirements for safeguarding personal information. States such as Massachusetts and Colorado have provided more specific requirements for the safeguards covered entities must put in place.
  • Update definition of personal information. The Act would update the definition of personal information to include medical information and insurance account numbers.
  • Shorter (15-day) notification period. The Act would require notification to the affected consumer(s) and the Attorney General’s office within 15 days. The hope is this would give consumers more time to freeze their credit across all major credit reporting agencies and take other preventative measures to prevent identity theft before it occurs.
  • Free credit freezes and credit reports. The Act would permit consumers to place and lift a credit freeze on their credit report at any time, for free. They also would be able to access three free credit reports from each consumer reporting agency that compiles and maintains files on consumers on a nationwide basis. Notably, if consumer reporting agencies experience a security breach, they will have to provide five years of free credit monitoring to affected consumers.
  • Penalty clarification. The Act would provide that businesses that suffer a breach and that failed to maintain reasonable security procedures will have committed a violation of the state’s Unfair and Deceptive Trade Practices Act and each person affected by the breach would constitute a separate and distinct violation of the law triggering a penalty.

If the Act is passed into law, North Carolina would join a number of other states that have and continue to update and strengthen their state laws requiring notification following a breach, and that have added obligations requiring reasonable safeguards to protect personal information. All organizations should be reviewing these developments and take appropriate steps to safeguard personal information they maintain about individuals, as well evaluating and enhancing their breach response readiness.

 

View Original Source
Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. He founded and currently leads the firm’s Privacy, e-Communication and Data Security Practice, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Mr. Lazzarotti also is a member of the firm’s Employee Benefits Practice Group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Mr. Lazzarotti counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Mr. Lazzarotti’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Mr. Lazzarotti speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Mr. Lazzarotti served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.