Category

Data Breach

Massachusetts Data Breach Law

By | Cyber Security, Data Breach

The Massachusetts Data Breach Notification Law requires businesses and others that own or license personal information of residents of Massachusetts to notify the Office of Consumer Affairs and Business Regulation and the Office of Attorney General when they know or have reason to know of a breach of security. They must also provide notice if they know or have reason to know that the personal information of a Massachusetts resident was acquired or used by an unauthorized person, or used for an unauthorized purpose. In addition to providing notice to government agencies, they must also notify the consumers whose information is at risk.

Definition Of Data Breach

A data breach is the unauthorized acquisition or use of sensitive personal information that creates a substantial risk of identity theft or fraud. Data breaches can be the result of criminal cyber-activity, such as hacking or ransomware, or because of employee error, such as emailing information to the wrong person.

Definition Of Personal Information

The law defines personal information as a resident’s first name and last name or first initial and last name in combination with any 1 or more of the following data elements that relate to such resident:

(a) Social Security number;

(b) driver’s license number or state-issued identification card number; or

(c) financial account number, or credit or debit card number, with or without any required security code, access code, personal identification number or password, that would permit access to a resident’s financial account.

Personal information does not include information that can be legally obtained from publicly available sources, such as addresses or birthdays.

Requirements For Reporting Data Breach

Within a reasonable amount of time after either the discovery of a breach or knowledge that personal information was obtained, the business or entity that was breached must notify both the Office of Consumer Affairs and Business Regulation and the Attorney General’s Office of the breach.

The notification must include:

  • A detailed description of the nature and circumstances of the breach of security or unauthorized acquisition or use of personal information;
  • The number of Massachusetts residents affected as of the time of notification;
  • The steps already taken relative to the incident;
  • Any steps intended to be taken relative to the incident subsequent to notification; and
  • Information regarding whether law enforcement is engaged investigating the incident.

Some data breaches are a result of a breach from a third-party vendor or other entity. For example, in addition to the regular reporting requirements, the law also requires financial institutions to report when a debit or credit card they issue is compromised. This means a breach may have occurred at a retailer but if the consumer used their bank issued card, the financial institution reports the breach as well.

Source

If your business is presently or may soon be involved in data breach litigation in the United States, email us at info@businesslitigationcontingencylawyers.com or telephone us toll-free in the United States at 800-756-2143 to find business litigation contingency lawyers who may handle your data breach litigation matter on a contingency basis.

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Data Breach Class Action Lawsuit Filed Against Marriott International, Inc.

By | Class Action Lawsuits, Data Breach

A class-action lawsuit was filed on November 30, 2018 against Marriott International, Inc. (“Marriott) on behalf of over 500 million consumers whose personal information, including their names, birthdates, addresses, locations, gender information, email addresses, payment card information, and passport information were stolen.

Bethesda, Maryland-based Marriott is a leading global lodging company with more than 6,700 properties across 130 countries and territories, reporting revenues of more than $22 billion in fiscal year 2017. Founded by J. Willard and Alice Marriott and guided by family leadership for more than 90 years, the company is headquartered outside of Washington, D.C. Marriott’s hotel brands include W Hotels, St. Regis, Sheraton Hotels, and Westin Hotels. Source

The class action lawsuit alleges that cybercriminals broke into Marriott’s servers in 2014 and obtained the personal information of approximately 500 million Marriott customers, and continued to have access throughout Marriott’s system, with unfettered and undetected access, for four years. The lawsuit alleges that Marriott did not discover the breach until September 8, 2018 yet did not notify its consumers until November 30, 2018. Marriott allegedly does not know the origin or identity of the hackers and has not fully assessed the scope of the attack.

The Marriott class action lawsuit alleges that Marriott failed to ensure the integrity of its servers and to properly safeguard consumers’ highly sensitive and confidential information, knowing that it had an obligation to protect the personal and financial data of its guests and customers and being aware of the significant repercussions to its customers if it failed to do so.  The class-action lawsuit alleges that Marriott  violated consumer protection statutes, breached confidence, and was reckless and grossly negligent.

Source

On November 30, 2018, Marriott issued the following statement (in part):

Marriott has taken measures to investigate and address a data security incident involving the Starwood guest reservation database.  On November 19, 2018, the investigation determined that there was unauthorized access to the database, which contained guest information relating to reservations at Starwood properties* on or before September 10, 2018.

On September 8, 2018, Marriott received an alert from an internal security tool regarding an attempt to access the Starwood guest reservation database in the United States.  Marriott quickly engaged leading security experts to help determine what occurred.  Marriott learned during the investigation that there had been unauthorized access to the Starwood network since 2014.  The company recently discovered that an unauthorized party had copied and encrypted information, and took steps towards removing it.  On November 19, 2018, Marriott was able to decrypt the information and determined that the contents were from the Starwood guest reservation database.

The company has not finished identifying duplicate information in the database, but believes it contains information on up to approximately 500 million guests who made a reservation at a Starwood property.  For approximately 327 million of these guests, the information includes some combination of name, mailing address, phone number, email address, passport number, Starwood Preferred Guest (“SPG”) account information, date of birth, gender, arrival and departure information, reservation date, and communication preferences.  For some, the information also includes payment card numbers and payment card expiration dates, but the payment card numbers were encrypted using Advanced Encryption Standard encryption (AES-128).  There are two components needed to decrypt the payment card numbers, and at this point, Marriott has not been able to rule out the possibility that both were taken.  For the remaining guests, the information was limited to name and sometimes other data such as mailing address, email address, or other information.

Source

If your business is presently or may soon be involved in class action litigation in the United States, email us at info@businesslitigationcontingencylawyers.com or telephone us toll-free in the United States at 800-756-2143 to find class action lawyers who may handle your class action litigation matter on a contingency basis.

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Average Cost Of Data Breach In 2018: $3.86 Million

By | Data Breach

The IBM Security and Ponemon Institute’s 2018 Cost of Data Breach Study: Global Overview reported that “data breaches continue to be costlier and result in more consumer records being lost or stolen, year after year.” The finding was based on interviews of more than 2,200 IT, data protection, and compliance professionals from 477 companies that have experienced a data breach over the past 12 months.

The report found that the average total cost of a data breach, the average cost for each lost or stolen record
(per capita cost), and the average size of data breaches in 2018 have all increased over the averages reported in 2017:

  • The average total cost rose from $3.62 to $3.86 million, an increase of 6.4 percent;
  • The average cost for each lost record rose from $141 to $148, an increase of 4.8 percent; and,
  • The average size of the data breaches increased by 2.2 percent.

Probability Of Future Data Breach

Two factors were used to determine the probability of a future data breach: the size of the data breach reported in this year’s research and where the organization is located:

  • The average global probability of a material breach in the next 24 months is 27.9 percent, an increase over last year’s 27.7 percent;
  • South Africa has the highest probability of experiencing a future data breach, at 43 percent; and,
  • Germany has the lowest probability of having a future data breach, at 14.3 percent.

The study also reported on the relationship between how quickly an organization can identify and contain data breach incidents and the financial consequences:

  • The mean time to identify (MTTI) was 197 days;
  • The mean time to contain (MTTC) was 69 days; and,
  • Companies that contained a breach in less than 30 days saved over $1 million vs. those that took more than 30 days to resolve.

The study also found:

  • The average cost of a breach for organizations that fully deploy security automation is $2.88 million;
  • Without automation, estimated cost is $4.43 million (a $1.55 million net cost difference);
  • The extensive use of IoT devices increased cost by $5 per compromised record;
  • A mega breach (defined as a data breach involving more than one million compromised records) of 1 million records yields an average total cost of $40 million; and,
  • A mega breach of 50 million records yields an average total cost of $350 million.

The key findings in the report were:

The global cost of data breach increased (the average total cost of data breach increased by 6.4 percent and the per capita cost increased by 4.8 percent; the average size of a data breach (number of records lost or stolen) also increased by 2.2 percent);

Data breaches are the most costly in the United States and the Middle East and least costly in Brazil and India (the average total cost in the United States was $7.91 million and the average total cost in the Middle East was $5.31 million; the lowest average total cost was $1.24 million in Brazil and $1.77 million in India; and, the highest average per capita costs were $233 in the United States and $202 in Canada);

Notification costs are the highest in the United States (these costs include the creation of contact databases, determination of all regulatory requirements, engagement of outside experts, postal expenditures, email bounce-backs and inbound communication setups; notification costs for organizations in the United States were the highest at $740,000 whereas India had the lowest at $20,000);

The United States and the Middle East spend the most on post data breach response (post data breach response activities include help desk activities, inbound communications, special investigative activities, remediation, legal expenditures, product discounts, identity protection services and regulatory interventions; in the United States, these costs were $1.76 million and were $1.47 million in the Middle East);

Canada has the highest direct costs and the United States has the highest indirect costs (Canada had the highest direct cost at $81 per compromised record (direct costs refer to the expense outlay to accomplish a given activity such as engaging forensic experts, hiring a law firm, or offering victims identity protection services); the United States had the highest indirect per capita cost at $152 (indirect costs include employees’ time, effort, and other organizational resources spent notifying victims and investigating the incident, as well as the loss of goodwill and customer churn);

The faster a data breach can be identified and contained, the lower the costs (for the consolidated sample of 477 companies, the mean time to identify (MTTI) was 197 days, and the mean time to contain (MTTC) was 69 days; both the time to identify and the time to contain were highest for malicious and criminal attacks and much lower for data breaches caused by human error; companies that identified a breach in less than 100 days saved more than $1 million as compared to those that took more than 100 days; similarly, companies that contained a breach in less than 30 days saved over $1 million as compared to those that took more than 30 days to resolve);

Hackers and criminal insiders cause the most data breaches (forty-eight percent of all breaches in this year’s study were caused by malicious or criminal attacks; the average cost per record to resolve such an attack was $157; in contrast, system glitches cost $131 per record and human error or negligence costs $128 per record; companies in the United States and Canada spent the most to resolve a malicious or criminal attack ($258 and $213 per record, respectively); Brazil and India spent far less ($73 and $76 per record, respectively));

Incident response teams and the extensive use of encryption reduce costs (in this year’s research, an incident response (IR) team reduced the cost by as much as $14 per compromised record; hence, companies with a strong IR capability could anticipate an adjusted cost of $134, down from $148 per record; similarly, the extensive use of encryption reduced cost by $13 per capita, for an adjusted average cost of $135,
down from $148 per record);

Third party involvement in a breach and extensive cloud migration at the time of the breach increases the cost (if a third party caused the data breach, the cost increased by more than $13 per compromised record for an adjusted average cost of $161, up from $148 per record; organizations undergoing a major cloud migration at the time of the breach saw the cost increase to per capita cost by $12, for an adjusted average cost of $160, up from $148 per record);

The loss of customer trust has serious financial consequences (organizations that lost less than one percent of their customers due to a data breach resulted in an average total cost of $2.8 million; if four percent or more was lost, the average total cost was $6 million, a difference of $3.2 million).

Source

If your business is presently or may soon be involved in data breach litigation in the United States, email us at info@businesslitigationcontingencylawyers.com or telephone us toll-free in the United States at 800-756-2143 to find business litigation contingency lawyers who may handle your data breach litigation matter on a contingency basis.

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