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A recent data breach study commissioned by the state of Maine sheds light on the losses banks experienced as a result of the data breaches at TJX and Hannaford Brother's supermarkets. The state's banks said they incurred $2.1 million in expenses related to data breaches since January 1, 2007. The Hannaford breach had the largest impact, affecting 71 financial institutions and incurring $1.6 million in expenses according to the Maine Data Breach Study. Hannaford is based in Scarborough, Maine. The TJX breach accounted for $485,000 in expenses. The report was issued by the Main Bureau of Financial Institutions in November 2008. It studied the impact of data security breaches on Maine banks and credit unions. Fifty credit unions and 25 banks headquartered in Maine responded to the survey. Financial institutions reported more than 18 million records breached last year, according to the Identity Theft Research Center. The San Diego-based nonprofit found that data breach reports across five industry sectors jumped to 656 last year, up 47% from 2007. About 12% of the reports came from financial-services firms, up from 7% in 2007. In Maine, the Hannaford breach resulted in more than $318,000 in gross fraud losses, according to data reported by 22 financial institutions. More than 700 accounts were used to buy items fraudulently, although five of the 22 institutions that suffered a fraud loss did not report the number of accounts, according to the report. The Hannaford breach cost some banks as much as $58,000 to reissue credit cards to customers. Investigation expenses cost nearly $30,000 for some banks. Communication to customers cost nearly $28,000, some banks and credit unions reported. Fraud losses of nearly $45,000 were tied to the TJX data breach. The losses were reported by six financial institutions. The expenses for reissuing credit cards cost some banks as much as $32,000. Investigation expenses were as high as $21,000 for some banks. Communication to custom

Federal regulators on Tuesday met to hear about whether the benefits of cloud computing justify increased regulation, as privacy activists claim, or whether such an approach would do more harm than good. "We need to be smarter about dealing with technology, and cloud computing is posing (a) risk for us," said Hugh Stephenson, deputy director for international consumer protection at the Federal Trade Commission's Office of International Affairs. The FTC convened the two-day meeting in its offices here, which follows a series of similar workshops held in previous years on topics like spam, privacy, and behavioral advertising. The agency may file lawsuits to halt "unfair or deceptive acts or practices," meaning that if cloud computing is not unfair or deceptive, the FTC would likely not have jurisdiction. To secure personal information on the cloud, regulators may have to answer questions such as which entities have jurisdiction over data as it flows across borders, whether governments can access that information as it changes jurisdiction, and whether there is more risk in storing personal information in data centers that belong to a single entity rather than multiple data centers. The current panoply of laws at the state, national, and international level have had insufficient results; FTC Commissioner Pamela Jones Harbour cited a 2008 PricewaterhouseCoopers information security survey (PDF) in which 71 percent of organizations queried said they did not have an accurate inventory of where personal data for employees and customers is stored. With data management practices that are not always clear and are subject to change, companies that offer cloud-computing services are steering consumers into dangerous territory, said Marc Rotenberg, executive director of the Electronic Privacy Information Center. Already, problems of identity theft are skyrocketing, he said, and without more regulation, data management services may experience a collapse analogous to that

Consumers save their e-mail and documents on Google's data centers, put their photos on Flickr and store their social lives on Facebook. Now a host of companies including Amazon and Microsoft wants government agencies to similarly house data on their servers as a way to cut costs and boost efficiency. But federal officials say it's one thing to file away e-mailed jokes from friends, and another to store government data on public servers that could be vulnerable to security breaches. The push toward "cloud computing," so named because data and software is housed in remote data centers rather than on-site servers, is the latest consumer technology to migrate to the ranks of government. Companies such as Amazon and Salesforce, which do not typically sell services to the government, want a piece of the business. Google opened a Reston office last year to sell applications such as Google Docs to federal employees. Silicon Valley-based Salesforce, which has focused on selling to corporations, established a team dedicated to government contracting. Microsoft spent $2.3 billion in 2007 to build data centers for cloud computing, and IBM, Sun Microsystems and HP want to provide the government cloud.

Data breaches are running at record levels, according to the San Diego-based Identity Theft Resource Center, a non-profit that tracks cybercrime. ITRC says it recorded 342 data breaches from Jan. 1 through June 24, up 69% from the same period in 2007. But, like the origins and perpetrators of so many individual data breaches, mystery also lies behind the aggregated numbers. "I'm not sure that this says breaches are increasing," ITRC founder Linda Foley tells Digital Transactions News. "What we know is the reporting of breaches is increasing." A handful of states now require some disclosure of data breaches to authorities, Alaska being the most recent. And some companies that have been hacked are starting to report breaches voluntarily, Foley says. While data breaches can compromise all manner of personal and business records, they often involve credit and debit card data and bank-account information. ITRC lists five major categories of breached entities, with the so-called banking/credit/financial sector accounting for 10% of 2008's breaches. Businesses, which include physical and Internet retailers, insurance companies and other private enterprises, accounted for 36.8%. Schools accounted for 21.3%; government and military facilities, 17%; and health-care facilities, 14.9%. IRTC also categorizes breaches by how they happened, such as through hackings-break-ins into computers and related systems, insider thefts, data lost in physical transit, and by other methods. The number of 2008 hackings through late June in the banking/credit/financial category was 10-double the five for all of 2007. The estimated number of records compromised as a result was 227,864. In 2007, the reported number of compromised records at financial institutions through hackings was 83,500. But Foley says not to put too much stock in the records numbers because so many breached organizations don't know or fail to report the number of compromised records when they report a bre

Over the past six months, many of us have become desensitized to the staggering number and size of layoffs that continue to occur almost daily. But the reality for the IT industry is that layoffs have a different effect on those of us in the industry whose mission it is to protect the company's reputation, intellectual property, confidential data (both electronic and hard copy) and business operations. Knowledge Center contributor Gregory Shapiro outlines seven steps IT professionals can take to protect their company's data before a layoff is implemented. Unlike individual employee terminations, which are customarily unannounced and immediate, layoffs present a larger threat to corporations because they leave the door open to both intentional and unintentional data loss, leakage and integrity problems. When employees sense impending layoffs or are told in advance and kept on for a limited time to transition, that is when rumors and panic consume the employees. It's then that the company's sensitive data can be compromised. For this reason, the strategy for any corporation planning a layoff should include setting policies and making sure practices are in place to secure their sensitive data now. Steps to protect company data before a layoff is implemented

Ironic

Rogue employees and hackers were the most commonly cited sources of data breaches reported during the first half of 2009, according to figures released this week by the Identity Theft Resource Center, a San Diego based nonprofit. The ID Theft Center found that of the roughly 250 data breaches publicly reported in the United States between Jan. 1 and Jun. 12, victims blamed the largest share of incidents on theft by employees (18.4 percent) and hacking (18 percent). Taken together, breaches attributed to these two types of malicious attacks have increased about 10 percent over the same period in 2008. Some 44 states and the District of Columbia now have laws requiring entities that experience a breach to publicly disclose that fact. Yet, few breached entities report having done anything to safeguard data in the event that it is lost or stolen. The ITRC found only a single breach in the first half of 2009 in which the victim reported that the lost or stolen data was protected by encryption technology. "It is a dual problem here undeterred by law or common sense," said ITRC co-founder Linda Foley. "You would think if all these organizations have to notify, that they would take some steps to make sure their data doesn't get exposed in the first place."

"The Identity Theft Resource Center (ITRC) reported its annual breach data for 2009 last week, and for the first time malicious attacks were more frequently identified as the source of those breaches than human error. In its "2009 Data Breach Report," the ITRC found 498 publicly disclosed breaches last year, down from 657 the year before. The downturn could have resulted from changes in breach disclosure, rather than a real drop-off in system compromises, the organization says. Interestingly, paper breaches now account for 26 percent of data leaks, up 46 percent compared to 2008. Malicious attacks outnumbered breaches attributed to human error for the first time in the three years the report has been compiled. The business sector accounted for 41 percent of data breaches, up from 21 percent the year before. Approximately 222 million records were compromised, the organization says -- and about 130 million of those came from the single breach at Heartland Payment Systems. Out of 498 breaches, only six reported they had either encryption or other strong security features protecting the exposed data, the ITRC says . "

Expect more action from the FTC on data privacy breeach

The software vendor's commissioned research will be revealed during a panel discussion with leaders from the California Office of Privacy Protection, Intel, and MySpace. Wednesday, Jan. 28, 2009, is Data Privacy Day, and to mark the occasion, Microsoft is participating in a panel discussion in San Francisco with privacy experts from the California Office of Privacy Protection, the Center for Democracy and Technology, Intel (NSDQ: INTC), and MySpace. Better this week than last, when Heartland Payment Systems and Monster.com disclosed major malware-driven data breaches that promise privacy headaches or worse for affected account holders. It is such incidents that worry Peter Cullen, Microsoft (NSDQ: MSFT)'s chief privacy strategist, because of the impact they can have on consumer trust. "Trust is becoming increasingly important," he said. That's why Data Privacy Day exists. Microsoft and other organizations recognize that without trust, the online economy only gets worse for everyone. Cullen explained that Data Privacy Day represents a global opportunity for organizations and individuals to come together to discuss how to better educate consumers about data privacy issues. One way to advance the discussion, Cullen said, was to commission some research, which Microsoft did in two cities, in California and Texas. "We wanted to understand how different segments of consumers, from teens to professionals to boomers, thought about privacy," he said. "There were some rather interesting results that came out of this." "Our hypothesis is that across these three segments, there would be different ways of thinking about these things," said Cullen. "We were really surprised to learn there's a large degree of similarity in the way people think about privacy."

Concerned that Google knows too much about you? The company provides many ways to protect your privacy online -- you just need to find them. Here are six good ones. 1. Know your privacy rights: Use the Google Privacy Center. This site includes all of Google's privacy policies, as well as privacy best practices for each of its products and services. Although the "legalese" of privacy policies can be difficult to understand, Google's Privacy Channel offers a library of short YouTube videos with practical tips on protecting your data when using Google products and services. Try the "Google Search Privacy" and "Google Privacy Tips" series. 2. Protect your content on the services you use. Some content that Google stores for you, such as photos uploaded in Picasa Web Albums, are public by default. You can protect your privacy when you upload photos by choosing the appropriate checkbox. Choices include "unlisted" (accessible only if you have the Web link, and not indexed by Web search engines) or private (viewable only by named users who must sign in). Another example: You can take a Google Chat "off the record" if you don't want the instant messaging transcript stored. In contrast, Google Latitude, which tracks your whereabouts by way of GPS-enabled cell phones, does not share your location data by default. You must authorize others to see it. Latitude stores your last known location, but not your history. 3. Turn off the suggestion feature in the Chrome browser. By default, Chrome retains a history of Web sites you've visited -- and the full text of those pages -- so it can try to guess which Web address you want as you type in the "Omnibox." You can turn the feature off by going to "Under the Hood" under Options and unchecking the "Use a suggestion service" box. You can also select other privacy options, including surfing in Chrome's "incognito" mode. 4. Turn off Web History. You may have turned on the Web History option, also called Personalized Search, when yo

Web sites that strip personally identifiable information about their users and then share that data may be compromising their users' privacy, according to researchers at the University of Texas at Austin. They took a close look at the way anonymous data can be analyzed and have come to some troubling conclusions. In a paper set to be delivered at an upcoming security conference, they showed how they were able to map out the connections on public social networks such as Twitter and Flickr. They were then able to identify people who were on both networks by looking at the many connections surrounding their network of friends. The technique isn't 100 percent effective, but it may make some users uncomfortable about whether they should allow their data to be shared in an anonymous format. Web site operators often share data about users with partners and advertisers after stripping it of any personally identifiable information such as names, addresses or birth dates. Arvind Narayanan and fellow researcher Vitaly Shmatikov found that by analyzing these "anonymized" data sets, they could identify Flickr users who were also on Twitter about two-thirds of the time, depending on how much information they have to work with. "A lot of the time people will share information online and they'll expect that they are anonymous," Narayanan said in an interview. But if their identity can be ascertained on one social network, its possible to find out who they are on some other network, or at least make a "strong guess," he said.

With identity theft on the upswing, Aram Langhans thought he was simply being prudent when he asked the Yakima Heart Center to remove his Social Security number from its files. "They had my insurance card and my driver's license. What else did they need?" said Langhans, a retired public school teacher insured by Group Health. Langhans said he was initially hooked up to a portable heart monitor that he was to wear for 24 hours, but the disagreement over his Social Security number prompted upper-level personnel to change their minds. He said moments after the device was attached, he was sent to a restroom to remove it and turned away. Shawnie Haas, administrator of the Heart Center, an independent outpatient group practice, declined to discuss the incident. But she said in an e-mail statement that the practice protects patients' privacy. "The Yakima Heart Center is careful to collect data pertinent to ensuring accuracy of our patient's medical record. Routine information collected for all patients includes name, address, date of birth, Social Security number, gender, and other specific information that helps us verify that individual's identity and insurance enrollment or coverage data. We are careful to maintain confidentiality of all patient information in our system." According to state and federal regulators, private insurance companies have moved away from using Social Security numbers for patient identification. But health-care providers in the Yakima Valley say they routinely collect them as "backup" in the event that patients' insurance doesn't pay the claim.

Don't expect a letter from Monster or Heartland Payment Systems letting you know they've lost your data. The breaches at Monster.com and Heartland Payment Systems are raising questions about the efficacy of data-loss disclosure laws enacted in at least 45 states. Back in 2007 we wrote about how the financial services industry lobbied hard to block proposed federal rules requiring organizations to notify individuals whose data they lose, and to permit consumers to freeze their credit histories. States such as California and Massachusetts have passed laws giving consumers these rights. But the Monster and Heartland capers have brought weaknesses in the legislation to center stage. I asked Lisa Sotto, head of privacy and information management at law firm Hunton & Williams, about this: Q: Heartland and Monster told me they intend to comply with all state laws. That said, they have not announced plans to notify individual victims. Is that OK? A: In the state breach notification laws, it is permissible to delay notification if a law enforcement agency determines that notification would impede a criminal investigation. If such a delay is requested by law enforcement, notification must be made after the law enforcement agency determines that notice would not compromise the investigation. I do not know if these companies received a delay request from a law enforcement agency. Q: Monster says it chose not to email individual victims because the bad guys could then replicate that message and use it as a phishing template. That makes sense. But is that allowed by state consumer protection laws? A: There are now 45-plus state laws and they are not uniform. Typically, notice is provided via first class mail, but there are provisions in the state laws allowing for electronic notice as well. Q: The only official notices from Heartland and Monster so far has been one-page disclosures posted on a web site. Does that cover them? A: There are provisions in the state laws al

Consumers face a greater risk of losing control of their data when doing business with smaller retailers, as many haven't made investments to comply with the Payment Card Industry's Data Security Standard (PCI DSS), according to a new survey. The survey, which covered 560 U.S. and multinational organizations, asked respondents a variety of questions about their investments and deployment of technology to comply with PCI DSS, which was introduced in 2005. It's an industry standard created by major credit card companies that's designed to protect customer payment data. The survey found that 55 percent of organizations only secured credit card information but not other data such as Social Security and driver's license numbers or bank account details. Also, only 28 percent of smaller companies between 501 to 1,000 employees comply with PCI DSS. That compares with more than 70 percent of large merchants with 75,000 or more employees that claimed they're compliant.

The advertiser's dream of sending a particular commercial to a specific consumer is one step closer to reality as Cablevision Systems plans to announce the largest project yet using targeted advertising on television. Beginning with 500,000 homes in Brooklyn, the Bronx and some New Jersey areas, Cablevision will use its targeting technology to route ads to specific households based on data about income, ethnicity, gender or whether the homeowner has children or pets. The technology requires no hardware or installation in a subscriber's home, so viewers may not realize they are seeing ads different from a neighbor's. But during the same show, a 50-something male may see an ad for, say, high-end speakers from Best Buy, while his neighbors with children may see one for a Best Buy video game. "We have, as an industry, been talking about this since the beginning of time," said Matt Seiler, the global chief executive of the media firm Universal McCann, a part of the Interpublic Group. "Now we've got it in 500,000 households. This is real." The potential of customized ads worries some privacy advocates, despite the assurance of cable companies that they maintain anonymity about the households. "We don't have an objection to advertising that is targeted to demographics," said Marc Rotenberg, the executive director of the Electronic Privacy Information Center, a civil liberties group in Washington. But, he said, there is a need to show "that they can't be reverse-engineered to find the names of individuals that were watching particular shows." Cablevision says it segments its subscribers only by demographics, so that an advertiser can divide ads among various groups: General Motors, for example, could send an ad for a Cadillac Escalade to high-income houses, a Chevrolet to low-income houses, and one in Spanish to Hispanic consumers. Cablevision matches households to demographic data to divide its customers, using the data-collection compa

Monster.com is advising its users to change their passwords after data including e-mail addresses, names and phone numbers were stolen from its database. The break-in comes just as the swelling ranks of the unemployed are turning to sites like Monster.com to look for work. The company disclosed on its Web site that it recently learned its database had been illegally accessed. Monster.com user IDs and passwords were stolen, along with names, e-mail addresses, birth dates, gender, ethnicity, and in some cases, users' states of residence. The information does not include Social Security numbers, which Monster.com said it doesn't collect, or resumes. Monster.com posted the warning about the breach on Friday morning and does not plan to send e-mails to users about the issue, said Nikki Richardson, a Monster.com spokeswoman. The SANS Internet Storm Center also posted a note about the break-in on Friday. USAJobs.com, the U.S. government Web site for federal jobs, is hosted by Monster.com and was also subject to the data theft. USAJobs.com also posted a warning about the breach. Monster.com has been checking for misuse of the stolen information but hasn't yet found any, it said. It has made changes since discovering the break-in but won't discuss them because it doesn't discuss security procedures publicly and because it is still investigating the incident, Richardson said. She also would not disclose the volume of data stolen, but said the company decided it would be prudent to alert all of its users via its Web site.

As they play in the global information economy, U.S companies stash away more data than they can handle effectively. The six-part 2009 New Data Center series opens with a look at how they're coping with the escalating problem.

A Harvard University fellow has developed a browser extension that stops advertising networks from tracking a person's surfing habits, such as search queries and content they view on the Web. The extension, called Targeted Advertising Cookie Opt-Out (TACO), enables its users to opt out of 27 advertising networks that are employing behavioral advertising systems, wrote Christopher Soghoian, who developed it, on his Web site. Soghoian, a fellow at the Berkman Center for Internet and Society at Harvard and a doctoral candidate at Indiana University, modified a browser extension Google released under an Apache 2 open-source license. Google's opt-out plugin for Internet Explorer and Firefox blocks cookies delivered by its Doubleclick advertising network. A cookie is a small data file stored in a browser that can track a variety of information, such as Web sites visited and search queries, and transmit that information back to the entity that placed the cookie in the browser. Google's opt-out plugin comes as the company announced plans last week to target advertisements based on the sites people visit. Targeted advertising is seen as a way for advertisers to more precisely find potential customers as well as for Web site publishers to charge higher advertising rates. But the behavioral advertising technologies have raised concern over how consumers get enrolled in the programs, what data is being tracked and how the data is protected.

Cable operators will sit in the hot seat Thursday as Congress reviews their plans to roll out targeted advertising amid fears that consumer privacy could be infringed if the companies were to track and record viewing habits. The House subcommittee on Communications, Technology and the Internet will hold a hearing that will look at new uses for digital set-top boxes, the devices that control channels and perform other tasks on the TV screen. Cable TV companies plan to use such boxes to collect data and direct ads more targeted to individual preferences. "We have recently called on Congress and the Federal Trade Commission to investigate cable's new interactive targeted TV ad system on both antitrust and privacy grounds," said Jeff Chester, executive director of the Center for Digital Democracy. He's concerned about Canoe Ventures, a consortium formed by the nation's six largest cable companies to oversee the rollout of targeted and interactive ads nationally. Chester worries that Canoe will track what consumers do in their homes. Currently, cable companies aim their ads based strictly on geography. Now, cable's goal is to take the Internet's success with targeted ads and transfer that to the TV medium. Thus, a household that watches a lot of Nickelodeon and the Disney Channel eventually could be targeted for theme parks promotions. This type of targeting is something broadcast TV can't do. For starters, Canoe plans to offer ads this summer that consider demographic factors such as age and income. Philadelphia-based Comcast Corp. and Cablevision Systems Corp. of Bethpage, N.Y., also have been testing or rolling out targeted ads outside the consortium. But cable operators are wary about being seen as trampling on consumer privacy and reiterate that they don't plan to target based on any personally identifiable information, such as someone's name and address. Canoe said it doesn't have plans this year to use set-top box data for ads. Instead, the first ads it pl

Heartland Payment Systems Inc., which announced a breach of potentially millions of credit and debit cards last month, said it plans to vigorously defend itself against lawsuits filed as a result of the data breach. In a filing with the Securities and Exchange Commission, Heartland Chairman and CEO Robert Carr acknowledged the claims that cardholders, card issuers, the credit card brands, regulators, and others have asserted, or may assert, against the payment processor as a result of the breach and the impact it could have on the business. Several class action lawsuits have been filed against Heartland, claiming that the payment processor issued belated and inaccurate statements when it announced a security breach of its systems. Carr He said the company could not "reasonably estimate the potential impact of the breach on the day-to-day operations" of the business. "We intend to vigorously defend any such claims and we believe we have meritorious defenses to those claims that have been asserted to date," Carr said. "At this time we do not have information that would enable us to reasonably estimate the amount of losses we might incur in connection with such claims." The Princeton, N.J.-based payment processor announced Jan. 20 that its systems were breached last year when intruders installed malware to pilfer data crossing the company's network. Since then, Sherriff's authorities in Tallahassee, Fla. arrested three suspects for using stolen credit card numbers to make purchases at local Wal-Mart stores. The credit card numbers used by the trio were allegedly stolen from the Heartland processing center in New Jersey. Carr said the company's sales force was doing well despite the obvious challenges caused by the combination of the downturn in the economy and the data security breach. The payment processor's current customer base has responded positively, he said. "In the weeks since our announcement of the breach, we have installed more margin, and have a bit

Just days after President Obama signed a law giving billions of dollars to develop electronic health records, a university technology professor submitted a paper showing that he was able to uncover tens of thousands of medical files containing names, addresses and Social Security numbers for patients seeking treatment for conditions ranging from AIDS to mental health problems. Using peer-to-peer applications, which computer users download to share files, most commonly music and movies, M. Eric Johnson, director of the Center for Digital Strategies at Dartmouth College in Hanover, N.H., was able to access electronic medical records on computers that had the peer-to-peer programs stored on their hard drives. The medical files contained detailed personal data on physical and mental diagnoses, which a hacker could use to not only embarrass a patient but also to commit medical fraud. One of the largest stashes of medical data Johnson discovered during two weeks of research he conducted in January was a database containing two spreadsheets from a hospital he declined to identify. The files contained records on 20,000 patients, which included names, Social Security numbers, insurance carriers and codes for diagnoses. The codes identified by name four patients infected with AIDS, the mental illnesses that 201 others were diagnosed as having and cancer findings for 326 patients. Data also included links to four major hospitals and 355 insurance carriers that provided health coverage to 4,029 employers and 266 doctors.