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PRESS RELEASE
The Integrity News

Vol. XII No. 16
ISSN 1081-2717
May 9, 2003


ComputerWorld

May 12, 2003

Companies Are
Unprepared For
California
Data Privacy Law

"Companies doing business in California have a compelling reason to bolster their data security.

A tough new CA state law that goes into effect July 1, 2003, will require companies that maintain data on Calif. residents to inform individuals of any security breaches that result in their personal information being stolen.

Apart from those in the financial services and health care sectors, few companies  appear to be aware of the pending rules, according to some legal experts. That could be dangerous, since failure to comply with the statute's requirements could expose companies to potentially costly lawsuits, legal experts warned.

California SB 1386 was signed into law last year and is being used as a model for a similar Federal identity-theft-related bill. Both laws aim to force companies to proactively identify security breaches that could result in identity theft -- something that companies have traditionally been unwilling to do.

The law doesn't spell out the administrative or technical actions that companies might need to take to be in compliance. But the implication is that companies need mechanisms for detecting, monitoring, and responding to breaches that might compromise personal data. ONE CLEAR SAFE HARBOR IS TO ENCRYPT DATA ON YOUR STORAGE MEDIA. COMPANIES THAT DO SO ARE EXEMPT FROM THE PROVISIONS OF SB 1386.

The PR consequences of only notifying Calif. residents of a security breach could be very bad. So, Calif. has come up with a consumer-oriented law that could  become the next headache for businesses using computers, all across the country."

The Investment Company Institute in Washington, DC, has made it known that they see little to show that the law addresses the identity-theft issue for which it was created. "We are not sure what these notices are meant to accomplish. What is an individual supposed to do with that information?"

To discuss security or encryption, call The Integrity Center at (972) 484-6140.


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