Your State Dictates Data Security Notifications… Will You Be Notified?

In the last few months, there have been several high-profile data security breaches that resulted in the theft of millions upon millions of non-public information records. Though much of the focus in the aftermath of the breaches was on personal identity theft and prevention, it’s important to keep in mind that not all the stolen data records target individuals. Business entities are also at risk. Vendors and partners that you do business with regularly will probably have record of your company’s non-public information, payment information, or tax ID number.

In the wake of the major breach of Equifax that resulted in 143 million records stolen, there have been many questions raised about data security and breach notification laws. One of the most concerning issues was the long delay between when the breach was discovered by Equifax and when the public was notified of the breach. To help clarify how data breach notifications work and why it was technically acceptable for Equifax to wait as long as they did before notifying their customers, there are a few things you should know.

State Laws
Only 47 out of 50 states currently have data breach laws. Alabama and New Mexico have proposed bills regarding data security and notification that are before their state legislature. The lone holdout on data breach laws is South Dakota, who has yet to propose a bill of any kind.

Since each state has its own laws on data security, there are no unified standards, and laws vary in each state. For example, New York law requires that notification of a breach should be given in the most expedient time possible and without unreasonable delay. In Wyoming, however, notice of a breach must be reported within a reasonable time that is not to exceed 45 days after the entity learns of the acquisition of personal information. Florida requires notification within 30 days.

However, these notification deadlines aren’t ironclad. Nearly all of the policies indicate that they will allow the entity to delay notification for cause. Reasons for delay vary from state to state, however, criminal investigations or national security are both common reasons that a delay in notification would be allowed.

Federal Laws
At the present, there are no comprehensive data breach laws on the federal level. While the Health Insurance Portability and Accountability Act (HIPAA) and Gramm-Leach-Bliley Act (GLBA) are federally mandated regulations that do have data breach policies enforced by the federal government, they are industry-specific. There is no federal law that encompasses a general data security policy.

Since Equifax is a financial institution, it’s required that they adhere to the standards set forth by the GLBA. Unfortunately for about half of American adults, the GLBA does not have a deadline for disclosure. The act merely says that the financial organization should notify the affected party ‘as soon as possible’. Despite waiting 40 days before disclosing the breach, Equifax was following the regulations as outlined by the GLBA.

In addition to having different notification laws for each state, other aspects of data security laws are just as diverse. Each state has different policies on who the law applies to, what constitutes a breach, who must be notified, how they must be notified, enforcement and penalties, and entities exempt from the law.

Are you familiar with data breach notification laws for your state? The National Conference of State Legislatures offers current laws for each state. SMBs should be aware of the data security laws that might affect them and how to handle the situation - regardless of whether they’re the entity that was breached or had their information stolen. The good news is that you don’t have to go it alone. RCL Systems can help you make sure that your non-public information doesn’t go public.