Wow Another Huge Data Breach!

24 January 2009 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

Heartland Payment Systems disclosed what may be largest payment data breach to date with over 100M cards being compromised. Apparently unknown intruders planted malicious software to steal data card information which was not detected until Visa and MasterCard alerted Heartland. Heartland’s public statement indicated that this may have been the result of “widespread global cyberfraud,” and also claimed that no merchant data, Social Security number, and other personal data was compromised. However until there’s a complete investigation we cannot be sure.

No Federal Law About Data Breaches

The US Congress has been mulling over legislation for some time, but in the meantime many states have laws that require disclosure of these breaches. The first such law as in California in 2003 (SB 1386) which requires that any computer which is breached there must be a notice sent to every citizen of California whose data was in that computer. The computers themselves do not have to be in California, merely that the computer has data about California residents. Texas (2005 SB 122) and many other states of similar laws now, but it does seem logical that there a federal law.

PCI Data Security Standards

PCI (Payment Card Industry) established Data Security Standards, however these standards are not law, and each Credit Card company has slightly different rules. Basically any company that processes credit card transactions is covered by these standards. However until there is significant disaster testing the effective of the standards, or some state adopts these standards we will not have one single set of rules.

Computer Breaches are Not New

Breaking into computer networks is as old as computers. Back in the 1960’s and 1970’s there were plenty of stories of universities whose computer networks were shut-down by incoming freshman year after year as a challenge to see who could clobber the system first. The simple solution was to provide a command that would automatically disable the system, and the challenge evaporated. Fast forward to the Internet era and we now reward hackers by hiring them to work for our government security agencies since they know how to penetrate systems.

Post a comment to let me know what you think about data breaches and how they should be managed.

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