The Canadian Privacy Law Blog: Developments in privacy law and writings of a Canadian privacy lawyer, containing information related to the Personal Information Protection and Electronic Documents Act (aka PIPEDA) and other Canadian and international laws.

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The author of this blog, David T.S. Fraser, is a Canadian privacy lawyer who practices with the firm of McInnes Cooper. He is the author of the Physicians' Privacy Manual. He has a national and international practice advising corporations and individuals on matters related to Canadian privacy laws.

For full contact information and a brief bio, please see David's profile.

Please note that I am only able to provide legal advice to clients. I am not able to provide free legal advice. Any unsolicited information sent to David Fraser cannot be considered to be solicitor-client privileged.

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The views expressed herein are solely the author's and should not be attributed to his employer or clients. Any postings on legal issues are provided as a public service, and do not constitute solicitation or provision of legal advice. The author makes no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained herein or linked to. Nothing herein should be used as a substitute for the advice of competent counsel.

This web site is presented for informational purposes only. These materials do not constitute legal advice and do not create a solicitor-client relationship between you and David T.S. Fraser. If you are seeking specific advice related to Canadian privacy law or PIPEDA, contact the author, David T.S. Fraser.

Friday, April 28, 2006

It's the cover-up, stupid 

In the hundreds of security and privacy breaches reported in the last few years, the companies involved that have fared the best are those that have been forthcoming with information and appear to be genuinely interested in the well being of the people involved. (I say "appear to be" because it doesn't really have to be sincere, but it has to benefit the individual. Once you can fake sincerity, you've got it made.) Those that have fared the worst are those that lied, misled customers, otherwise tried to cover it up or trivialize the breach.

Accidents happen and any company that has customer data on hand is at risk, to some degree or another. No security system is perfect. The biggest consequence of a breach is probably not an award of damages from the court but the loss of trust of customers and other stakeholders. The senior director at Lexis Nexis is quoted in a recent Network World article (Disclosure meant less pain in data theft) as confirming this:

But when the damage became clear, LexisNexis made an immediate decision to be forthcoming and transparent about the breach, he said. "We tried to do the best job we could," he said.

The company contacted all those who were affected by the attack using the framework of a California data security disclosure law passed in 2003 as a guide, Cronin said.

The law is catching up after the high-profile cases of last year, including ChoicePoint, a data broker that acknowledged divulging sensitive personal information to identity thieves posing as customers. So far in the U.S., 20 states have implemented notification laws, and a federal law is under consideration.

After the data breach, LexisNexis took several steps to implement stronger security, Cronin said. The company reviewed the security of all its Web applications and created new procedures for verifying customers with access to sensitive data, he said.

LexisNexis encouraged certain customers to sign up for anti-virus software. It revamped online security access, looking at password complexity and expiration times. The company also implemented measures to automatically detect anomalies in use of its products to identity potential security problems, Cronin said.

LexisNexis learned other lessons. Passwords are dead, Cronin said, and two-factor authentication is recommended. But front-door perimeter attacks are less likely than the persistent weak link: people.

Now ask yourself why ChoicePoint is synonymous with "privacy breach" and not Lexis Nexis.

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