A tale of two breach responses

Over on The Examiner, Joe Campana compares the way in which two recent breaches involving Wisconsin residents were handled by the respective entities – the Dean and St. Mary’s Hospital breach and a University of Wisconsin breach.

For the most part, I agree with Joe’s points, and I think it’s important to emphasize that much of what he may describe as the “elegance” of the former’s handling flows from the federal requirements of the HITECH Act. Educational institutions do not have the same breach notification requirements as HIPAA-covered entities. If they did, perhaps we would more elegantly handled breaches in the education sector, too.

HITECH’s notification requirements have changed the landscape and given us a better window into breaches in the healthcare sector. We continue to need the same kind of approach to breaches in other sectors. As importantly, though, we need higher standards in the education sector for security and preventive measures, coupled with accountability. Healthcare entities can be fined by states and HHS over breaches. As I sit here with my first cup of coffee, I cannot think of a single educational institution or k-12 entity that has ever been fined as a result of a breach.

The U.S. Dept. of Education has its hands full trying to deal with major challenges facing public education and I doubt if they’re equipped to really start investigating breaches and levying fines. But state attorneys general have the right to protect residents of their state. If a university has a pattern and practice of failure to secure personally identifiable information and as a result, thousands of individuals have their Social Security Numbers accessed or acquired, maybe the state AG could – or should? – investigate and consider taking action.

One of the differences Joe describes, though, is not a matter of statute. It concerns whether a breached entity offers free credit monitoring services or credit restoration services to those affected. Such offers have become somewhat “de rigeur” over the past two years, but we still see incidents – like the recent UW breach – where such services are not offered. Frankly, given how likely it is that at least a few people will attempt to file a class action lawsuit following a breach, it would probably be cheaper to offer free credit monitoring than to defend against a lawsuit, and it would certainly be better in terms of good will, but should this be regulated or mandated by federal legislation, as one bill in Congress proposed?  As many have noted, the risk of ID theft from such breaches is actually quite low.  Should breached entities be required to provide a service that generally is not needed?  Should they be required to provide credit restoration services for those who do experience ID theft or fraudulent use of their information?  Those who believe in small government will not necessarily want this regulated but I think a case can be made that accountability requires that breached entities not leave those affected to fend for themselves. If they broke it, they need to fix it. But is free credit monitoring the best and most cost-effective way to approach this?

I expect that we will see a data breach notification bill make it through Congress 2011. Whether it will be a good bill or a watered down bill that doesn’t do much for individuals remains to be seen. But unless we get more requirements for better proactive security measures with enforcement, I think we’ll be back here next December still debating how to handle all-too-numerous breaches that were often easily avoidable.

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