03:26 PM
Bob Evans
Bob Evans

Business Technology: If Data Is Breached, Do The Right Thing

Let's say you get a call at 2:30 a.m. from your team, and they tell you they've uncovered a security breach that has let 250,000 customer files be stolen, Bob Evans says. What's the first thing you do? Do you call the CEO? Do you call the FBI? And what about those 250,000 customers--do you contact them, or try to keep a lid on the breach and resultant theft?

Last week this column talked about your single biggest career threat: rigid legacy systems that cost so much to maintain that they leave nothing for innovation. This week, I am sorry to say that the topic is Biggest Career Threat No. 1A: the security (insecurity?) of your customer data.

Over the past few months, we've all seen the news about retailers, data aggregators, the IRS, health-care companies, and other organizations whose customer data was stolen in the aftermath of security breaches. Human nature being what it is, how many of us watched those reports while muttering, "There but for the grace of God go I"?

Well, even heavenly grace is finite, so it's time to reflect on what other safeguards might be at our disposal. First, let's assume that your technology-based safeguards are pretty darn good; that's a nice start. Second, if people throughout your organization--not just the IT team, but the entire organization--were asked to describe your company's data-security policies and practices, would most of them be able to give cogent and consistent answers, or would they look at you as if you'd asked them for the middle name of former Montreal Expo Bombo Rivera? Third, let's say that the very worst thing happened, and you get a call at 2:30 a.m. from your team, and they tell you they've uncovered a security breach that has let, oh, 250,000 customer files be stolen by cyberthieves. What's the first thing you do? OK, after swearing a lot and throwing a lamp across the room, what's the first focused step you take toward dealing with this? Do you call the CEO? Do you call the FBI, or maybe the Secret Service?

Let's say you call the CEO. After you give your assurance that the breach has been sealed, what do you recommend about the 250,000 potential victims of identity theft--customers whose names, addresses, phone numbers, Social Security numbers, credit-card numbers, bank-account numbers, medical history, purchase records, photos, and other types of deeply personal information are now probably being made available to odious swine the world over? What in the world do you do?

More On Customer Data Threats

GAO Blasts IRS Security, Says Taxpayer Data Vulnerable

Credit-Card Data Reportedly Stolen From Polo Ralph Lauren

DSW Database Breach Nets 1.4 million Customer Accounts

Storage Managers Cite Data Security As Top Concern

University Consortium Seeks To Thwart Data Theft

LexisNexis Revises Potential Data Theft Figure By Tenfold

Computers With Patient Data Stolen On Eve Of HIPAA Security Rules

Congress Primed To Pass Laws Requiring Disclosure Of Data Thefts

Data Executives Admit Earlier Identity Losses

I think I know what most companies would have done anytime before mid-2004: They wouldn't have said a damned thing to those customers, they would have put every ounce of their energy and effort into ensuring that word of the breach and resultant theft is limited to as few internal people as possible, and they would have focused on internal damage control. They would have rationalized their silence and their abuse of their customers' trust by saying, "Hey, it's a dangerous world out there--caveat emptor and all that." And ultimately they would have hoped that somehow, someway, whatever bad things happened to those quarter of a million customers would never get traced back to the companies responsible for it.

But, like Ramblers, Pan Am, the 10-cent cup of coffee, and the Montreal Expos, that type of irresponsible behavior is now a permanent fixture of our past. Cybercriminals and the equally reprehensible vermin who buy their wares will always be with us, and that means that security breaches will continue to happen, and that means that more customer-data thefts will happen. The Federal Trade Commission reports that about 10 million people are victims of identify theft each year, and that in 2003 such crimes cost consumers $5 billion and businesses $48 billion. So the only question is, what is our plan in case it happens to us? Will we have the integrity and true regard for our customers to immediately launch a sweeping program to inform them and actively support their efforts to minimize their resultant financial exposure and general inconvenience? Or will we leave them to fend for themselves, focusing only on keeping our screw-up quiet and our reputation unsullied?

If you're in the latter camp, then you might want to consider how you'd while away the hours in prison. Because it's very likely that federal legislation is coming, patterned after California's recently enacted legislation requiring all companies that have suffered security breaches to inform all of their customers immediately. As TechWeb News reported on April 13, "The Senate Judiciary Committee held a hearing Wednesday on identity theft as it took up legislation introduced this week by Sen. Dianne Feinstein (D-Calif.), who hopes to beef up federal laws to bring everyone the protection currently enjoyed only by Californians. The committee's hearing Wednesday morning included testimony from Deborah Platt Majoras, the chairman of the Federal Trade Commission (FTC), officials from the FBI and Secret Service, representatives from privacy advocacy groups, and executives from ChoicePoint and LexisNexis, firms that sold identities to fraudsters and had a database hacked, respectively." Silence might be golden in some situations, but customer data isn't one of them.

But if you insist I'm being a naive Pollyanna, check out this suggestion from an April 21 Wall Street Journal story about data security in health care: "Mark Rothstein, a member of the National Committee on Vital and Health Statistics, an HHS advisory group, says security concerns could become so paramount for consumers that health institutions might one day have to post their security performance records (subscription required), much as airlines report on-time departure rates. 'I don't see any way you can make an absolutely, totally foolproof system,' Mr. Rothstein says. 'But we ought to keep trying.' "

The banking industry seems to be trying to get out in front of this potential disaster, at least a bit. Earlier this month, a group of large financial institutions called the Financial Services Roundtable agreed to give permanent status to a pilot program it launched last year to provide free assistance to victims of identify theft.

But, like all deeply ingrained behavior, the instinctive desire to stonewall will not go away easily. An April 15 story from The Associated Press explores the active role some law-enforcement agencies have played in sharply restricting what the public--let alone the affected customers--are allowed to know in such cases. "In a twist, the FBI and Justice Department have worked aggressively to shield the identities of corporations that have been hacking victims. To encourage businesses to contact them after such break-ins, U.S. investigators and prosecutors have publicly promised to seal court records, keep top executives off witness stands and use protective orders to keep details of these crimes out of the headlines," the AP story said. " 'There is still some reluctance to call law enforcement, some hesitancy because of the negative impact on reputation,' said Amit Yoran, the Bush administration's former top cyber-security official. He said requiring companies to acknowledge a break-in 'may be of value, but it should not be done as a knee-jerk reaction to the handful of high-profile and significant disclosures of the past few weeks.' "

So this situation is already pretty ugly, and it's probably going to get worse. In dealing with the security of customer data, our responsibility is to force our top executives to place top-priority status on not only our cybersecurity infrastructure but also on our regard for our customers, their privacy, and the obligations we have to them. And we need to do this not just because some legislation requiring us to do so might be drawn up, but for a much simpler reason: It's the right thing to do.

To discuss this column with other readers, please visit Bob Evans's forum on the Listening Post. To find out more about Bob Evans, please visit his page on the Listening Post.

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