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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

The recent U.S. stimulus bill includes $18 billion to catapult the health industry toward the world of electronic health records. This is sure to light a fire under every hungry security vendor to position itself as the essential product or service necessary to achieve HIPAA compliance. It should also motivate healthcare IT professionals to learn where their sensitive data is located and how it flows. To be sure, with federal money allocated through 2014 for the task of modernizing the healthcare industry there will be many consultant and vendor businesses that will thrive on stimulus money. Healthcare is unique in that storage of electronic health records is highly distributed between primary care physicians, specialist doctors, hospitals, and insurance/HMO organizations. Information has to be efficiently shared among these entities with great sensitivity towards patient privacy and legitimate claims processing. Patients want to prevent over zealous employers from performing unauthorized background checks on medical history; claim processors want to prevent paying fraudulent claims arising from targeted patient identity theft. The bill has two provisions which turn this into a tremendously challenging plan, and a daunting task for securing patient data: * Citizens will have the right to monitor and control use of their own health data. This implies a large centralized identity and access control service, or perhaps a federated network of patient registration directories. Authenticated users will be able to reach into the network of health databases audit use of their data and payment history. * Health organizations suffering loss of more than 500 patient records must publicly disclose the breach, starting with postings on the government's Health and Human Services website. This allows related organizations to trace the impact of the breach throughout the healthcare network, but care must be taken not to disclose vulnerabilities in the system to intruders

There were only two of us on the graveyard shift. "If it's not locked up," a colleague at my first newspaper declared as he snatched a folder of papers from our boss' desk and strode towards the office copying machine, "Xerox it." (Old-tongue for photocopy.) That was long before CDs, and USB drives and, certainly, iPods, but the lesson was the same. If you are stupid about protecting company information, shame on you. I guess that's the message behind the "revelation" released in a survey this week that the majority of people who leave their jobs, voluntarily or otherwise, are taking company information with them. Lots of it. My reaction was the same as when I watched my fellow journalist grab and copy whatever it was that had been so carelessly left in the open. I shrugged. (We are by nature an overly curious species, and that overrides our normally dominant ethics gene.) Data Loss Risks During Downsizing conducted by the Ponemon Institute and sponsored by Symantec, was apparently designed to test the hypothesis that in this dire economy (ominous music in background), former employees are going to take important company information out the door. And, in fact, the poll of 945 former employees who left their jobs or were dismissed in the last 12 months showed that 59% stole company data. What kind of data? Email lists, non-financial business information and customer information, including contact lists. Not the secret formula for Coke, not the clinical trial reports on a cure for cancer, no insider information on proposed mergers and acquisitions. Not even a few thousand credit card numbers. Hardly worthy of shock and dismay. This is what a lot of people do when they leave jobs. Are they supposed to? No. Is it wrong? Yeah, but it's sort of like cheating on taxes. Folks rationalize it in a variety of ways, or it just doesn't weigh heavily enough on their conscience to set off an internal alarm. Most of the people who took data - 79% â

The dark figure of fraud drove the development of best practices at Memolink. I harnessed the fear of the unknown and used basic change management to gather support internally. I knew the approach would indefinitely change how we did business and alter our company's culture. Like many dot coms, my company has an entrepreneurial spirit, and like not-so-many dot coms, we have been in business for 15 years. The culture is well established and the work we do is exciting and fun. Would a company with an innovative and "don't-box-me-in" mentality openly receive a new set of standards and expectations? The implementation of the Best Practice approach required two important change management tactics: consistent messaging and constant and varied communication. It was not enough to tell associates that the proposed transition, which included separating processes that traditionally had been managed by a sales team, would benefit the company in the long term. The main component of the message had to be the "What's in it for me?" value proposition. At the time, the sales associates had nothing to gain, and, in fact, they would lose commission. For example, when my department rolled out the Best Practice approach to partner vetting, fewer partners would meet the standard and be accepted, which meant incremental commission loss for the sales team. Money matters create major stress and tension, so it was important that this conflict be addressed early in the implementation process. Management responded by restructuring commissions so that employee motivations were aligned with business goals. This move also made the adoption period for other processes and procedures shorter and less chaotic. In essence, align the money motivators and people will buy in more quickly. Associates were not reeling about their payment structure, but were they and other stakeholders, who were originally unaffected by the commission structure, truly behind the idea? In order to gain the

The whole idea of privacy has become a joke. On one hand we have consumers who will give away their personal details to random Web sites (as well as to Mrs. Sikiratu Seki Adam, "a widow to Late Saheed Baba Adams") at the drop of a virtual hat, and on the other we have businesses losing personally identifiable information and transaction data with wild abandon … yes, I'm talking about you Heartland Payment Systems. (Heartland lost data on more than 100 million transactions although it is hardly alone - check out the data loss database at the Open Security Foundation). This widespread carelessness has compromised the privacy of tens of millions of consumers and businesses. While carelessness is the cause, what has allowed it to go unchecked are a number of factors: The Internet making transactions easier and faster; the systems we use on the Internet (particularly Windows PCs) being as secure as the First Little Pig's house of straw; organizations not taking security seriously enough; naive consumers; and inadequate regulation of the companies that hold private data. What got me thinking about this privacy void was a letter my wife received from Nordstrom Bank yesterday. My wife has a Nordstrom credit card and the company sent us, for what seems like the 1,000th time, its latest privacy policy. This version was one page of small text that more or less says what every other privacy notice from financial services companies say (we average about one of these "revised" policies every couple of weeks).

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

Fireman's Fund Insurance Co. this week unveiled what it says is the first coverage available to small and medium-sized businesses for losses from payment card data breaches. News of the policy came on the same day that a non-profit research organization reported that data breaches increased 47% last year. The idea behind the coverage, according to Brian Gerritsen, product director at Novato, Calif.-based Fireman's, is to give peace of mind to business owners who are diligent about complying with the Payment Card Industry data-security standard, or PCI, the card networks' uniform protection rules that all card acceptors are supposed to meet. "That's what we're really trying to insure against-business owners trying to do everything in their power to protect their customers' cardholder data, but still find themselves in a data-breach situation and out of compliance with the PCI standards or other security standards that may apply to them," he tells Digital Transactions News. To get the coverage, however, a merchant must clear a number of hurdles. An applicant must already have property or liability coverage from Fireman's as well as the company's general data-breach policy first offered in 2006. The new payment card coverage is an add-on to that earlier product. Coverage is available to retailers and most other card-accepting merchants, but not schools and hospitals, says Gerritsen. The insurer excluded the former because of their high rate of data breaches and the latter because they hold extremely sensitive medical and personal data. If breached, a covered merchant could recoup about $160,000 in resulting expenses. That includes up to $50,000 for a PCI-specific forensic investigation, system scans and software, and hardware upgrades to get card security up to snuff. The policy also provides up to $100,000, with a 5% deductible, for PCI fines-"contractual penalties" in industry lingo-and related costs such as chargebacks and issuersâ€

Promoting Privacy And Free Speech Is Good Business This Guide will help you make smart, proactive decisions about privacy and free speech so you can protect your customers' rights while bolstering the bottom line. Failing to take privacy and free speech into proper account can easily lead to negative press, government investigations and fines, costly lawsuits, and loss of customers and business partners. By making privacy and free speech a priority when developing a new product or business plan, your company can save time and money while enhancing its reputation and building customer loyalty and trust.

All but one of the legal claims filed against Hannaford Bros. -- the Maine-based retailer that suffered a security breach exposing some four million credit and debit cards -- has been dismissed. U.S. District Court Judge Brock Hornby threw out the civil claims against the grocer for its alleged failure to protect card holder data and to notify customers of the breach in a timely fashion. In dismissing the claims, Hornby ruled that without any actual and substantial loss of money or property, consumers could not seek damages. The only complaint he allowed to stand was from a woman who said she had not been reimbursed by her bank for fraudulent charges on her bank account following the Hannaford breach.

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

Identity thieves are getting more clever and are increasingly using stolen information to get driver's licenses, employment and government assistance, according to a new report. The survey by the Identity Theft Resource Center also found that the greater awareness of this problem by the public has led to more people discovering they are victims themselves, through monitoring of their bank accounts and credit card statements. Typically, victims learned of their identity theft when they were denied a job or credit or were informed by law enforcement. "Most of our information is beyond our control," said Linda Foley, co-founder of the Identity Theft Resource Center, which surveys victims each year to see how identity theft is changing. "If a thief wants to get it, he will find a way to get it." The report covers the experiences of around 100 of the 1,500 people who were victimized in 2008 and contacted the center, a nonprofit that helps people recover from identity theft. Stolen personal information is now cheap - identities may sell on the black market for as little as 60 cents each - and thieves churn through them quickly to lower their chances of getting caught, Foley said. Rather than opening 10 or 20 credit card accounts in a victim's name, they now open two or three, charge as much as they can and move on to the next person. This raises the cost of identity theft to businesses, whose average loss to fraud nearly doubled last year to $90,107, up from $48,941 the year before.

As USB devices have evolved into useful storage media, they've also turned into a security nightmare for agencies. The usage of USB devices should be encouraged and embraced to improve productivity, but they also must be managed to minimize the risks inherent with these tools. This paper discusses how USB devices have evolved and looks in-depth at the productivity benefits as well as the potential risks these devices can introduce if not managed properly. This paper also offers recommendations on how to balance the productivity versus risk challenge and highlights how government agencies can effectively manage the usage of USB devices and prevent data loss and malware introduction.

The problem with securing data and insuring its safety is that there is simply so much more stored electronically these days that opportunities for outside hackers or insiders to steal valuable, confidential information off a company's computer systems are growing exponentially, according to those in the insurance industry who make it their business to cover this expanding exposure. Indeed, "you can take out more data in a thumb drive now than people could take out in a super-computer 10 years ago," according to Kevin Kalinich, co-national managing director for Professional Risk Solutions at Aon. The risk of a data breach is very real for companies large and small across almost any industry, noted Mr. Kalinich. He cited a report from the University of California, Berkeley, that more data has been aggregated and stored in the last three years than in the entire history of mankind. He also noted that between 75 and 85 percent of Fortune 2000 companies have suffered a "material data breach," meaning there is a growing market for those selling insurance coverage for liability and repair costs, as well as loss control services. Companies that take an "it won't happen to me" approach to securing data need only look at news headlines to see that organizations are often hit by breaches, and as more data is being stored electronically, the potential for, and impact of possible breaches increase. Princeton, N.J.-based credit and debit processing company Heartland Payment Systems reported that it had been compromised in 2008 in a breach that involved up to 100 million records, which would be tops for number of records accessed in a breach. The Heartland incident would displace the 2007 breach of TJX, in which over 45.6 million credit and debit card numbers were stolen. The TJX breach, in turn, took the record set by a breach of CardSystems Solutions in 2005.

The National Institute of Standards and Technology (NIST) this month released preliminary recommendations that federal agencies -- and their contractors -- should follow to protect the confidentially of personally identifiable information (PII). U.S. government agencies should take a number of precautions when dealing with personal information residing in their organizations, according to the NIST document. The recommendations are intended to be for U.S. federal government agencies, and companies with which they work, but NIST said that other verticals may also find value in it. The report states that organizations should store only PII necessary to conduct business, develop an incident response plan for the event of a breach and encourage coordination for data-loss incidents among CIOs, information security officers and legal counsel.

The suggestion comes after a 12 month period in which the Government has admitted losing millions of personal records, including the entire child benefit database. Richard Thomas, the information commissioner, will tell MPs that its annual tracking survey has found a big jump in the way that people view loss of personal data, excessive surveillance, privacy intrusions and identity theft. Its survey of 1,000 people found 94 per cent of people ranked "protecting personal information" as their top concern, ranked equal with concerns about crime. Public awareness of access to their personal information held by public bodies has also jumped, from 74 per cent to 86 per cent between 2007 and 2008. Mr Thomas will say that part of the reason has been the 277 data breaches by public bodies, since HM Revenue and Customs said it had lost the personal details of 25 million families on the child benefit database in October 2007.

Privacy is Dead. Long Live Privacy? at the 2007 Battle of Ideas conference hosted by the Institute of Ideas.New technology seems to have changed the meaning of privacy, affording individuals the possibility of sharing details of their hitherto private lives in unprecedented ways, from personal blogs to picture sharing and even 'social bookmarking'. For many of us, divulging intimate details of our private lives via social networking websites like MySpace and Facebook has become the norm. But information and communication technologies have also facilitated surveillance and data gathering by government and big businesses. While in some contexts we seem so ready to give up our privacy, in others we seem increasingly anxious to protect it.To what extent are new technologies responsible for the death of privacy? Are privacy concerns simply technophobic, or are we right to worry about a loss of control over personal information? Have new technologies and our enthusiastic adoption of them actually transformed our notions of public and private, and blown apart the wall dividing the two? Why do we worry about Tesco monitoring what we buy, when, according to Sun Microsystems CEO Scott McNealy: 'You have zero privacy anyway. Get over it'? - IoI

What companies do you trust to guard your privacy? According to a Wednesday study from the Ponemon Institute and TRUSTe, eBay is the most trusted company for privacy, followed by Verizon and the U.S. Postal Service. Facebook, meanwhile, cracked the study's top ten for the first time. To reach its conclusions, Ponemon and TRUSTe first polled more than 6,000 adults on their "most trusted" brands. An expert review panel then compared those results against the companies' privacy statements, notices, to what levels they accessed account information, their cookie management, in- and out-of-network data sharing practices, and the availability of customer service staff. Of the top 10 companies, seven of them were technology-related. The entire list includes eBay, Verizon, the U.S. Postal Service, WebMD, IBM, Procter & Gamble, Nationwide, Intuit, Yahoo, and Facebook. "With the banking industry at the center of a national financial crisis, it's no surprise to see a loss of trust reflected in the rankings of even those top performers on this list," Dr. Larry Ponemon, chairman and founder of the Ponemon Institute, said in a statement. "Meanwhile, the continued strong showing of e-businesses such as eBay, WebMD, Yahoo, and Facebook seems to demonstrate consumers' growing comfort with doing business online."

"Bankers are playing with fire by increasing risk when taxpayer tolerance with financial bailouts has worn perilously thin, the International Monetary Fund warned. Managing director Dominique Strauss-Kahn reckons bankers may be in the throes of a "Mardi Gras" party of renewed speculation ahead of a looming regulatory crackdown. Yet the return of their old habits is dangerous. If a new financial crisis occurred in a few years" time, the public would be unwilling to support another round of massive bailouts, he told the Confederation of British Industry. Democracy itself could be threatened if banks went back to taxpayers with their caps in their hands. "In an atmosphere of increasing optimism, we see signs of old habits coming back. Risk-taking is on the rise," said Strauss-Kahn. "Right now, regulatory uncertainty is throwing up some perverse incentives. For example, it might be encouraging a risk-taking culture -- a Mardi Gras effect whereby financial institutions party now in expectation of lean times to come. "Clearly, this is dangerous, not least for emerging markets. And we may run out of time -- if we wait too long to implement these reforms, it might be too late." A second wave of rescues may simply not get through national legislatures, he added: "The political reaction would be very strong, putting some democracies at risk." IMF figures show the aftershocks of the 2008 crisis are far from over, with firms recognising only half of their losses worldwide. Yet despite the fragility of the financial sector, there is mounting evidence that traders are making hay before tougher regulatory standards come into force. Investment banking profits have soared this year, as firms make the most of ultra-low interest rates, money-printing operations and huge government bond issuance programmes. Strauss-Kahn argued countries need to act quickly to remove "regulatory uncertainty" -- ensuring bankers do not make the most of the current confusion over future standards

"CRM systems are full of data that's valuable to your company. Or at least, it better be. But CRM systems are not at the top of the list for external hackers, so why should it be on your priority list for an ILP/DLP system? Let's start by clearing up a misconception: the external hacker is rarely your biggest concern, particularly for a CRM system. The most dangerous breaches come from your own employees, particularly the disgruntled ones. Given the number of layoffs and the turnover of sales reps these days, the risk has grown. Your employees not only have access to a significant amount of data, but also know what the data means and how to separate the marginal from the important."