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A consumer reporting agency that failed to properly screen prospective customers and, as a result, sold at least 318 credit reports to identity thieves, has agreed to settle Federal Trade Commission charges that it violated federal law. Under the settlement, the company and its principal must ensure that they provide credit reports only to legitimate businesses for lawful purposes, use a comprehensive information security program, and obtain independent audits every other year for 20 years. The settlement also imposes a $500,000 penalty but suspends payment due to the defendants' inability to pay. According to the FTC, the defendants use sensitive financial data from other consumer reporting agencies to create reports that landlords use to assess potential renters. These reports contain consumers' names, Social Security numbers, birth dates, bank and credit card account numbers, credit histories, and other personal information. The Commission alleges that the company failed to properly screen new customers. The company allegedly requested only publicly-available information from applicants seeking credit reports, and it did not request supporting documentation to establish that an applicant was actually a landlord renting property. As a result, identity thieves posing as property owners were given an account with unlimited online access to credit reports, and the account was used to access at least 318 reports containing sensitive personal information. The FTC charged the defendants with violating the Fair Credit Reporting Act (FCRA) by furnishing credit reports to persons who did not have a permissible purpose to obtain them, and by failing to maintain reasonable procedures to prevent such impermissible disclosures and to verify their customers' identities and how they intended to use the information. The agency also charged them with violating the FTC Act by failing to employ reasonable and appropriate security measures to protect sensitive consumer inform

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

The inability to discard worthless items even though they appear to have no value is known as compulsive hoarding syndrome. Ben Rothke explains why it's a bad habit in the world of IT security. The inability to discard worthless items even though they appear to have no value is known as compulsive hoarding syndrome. If the eccentric Collyer brothers had a better understanding of destruction practices, they likely would not have been killed by the very documents and newspapers they obsessively collected. While most organizations don't hoard junk and newspapers like Homer and Langley Collyer did, they do need to keep information such as employee personnel records, financial statements, contracts and leases and more. Given the vast amount of paper and digital media that amasses over time, effective information destruction policies and practices are now a necessary part of doing business and will likely save organizations time, effort and heartache, legal costs as well as embarrassment and more. In December 2007, the Federal Trade Commission announced a $50,000 settlement with American Mortgage Company of Northbrook, Illinois, over charges the company violated the FTC's Disposal, Safeguards, and Privacy rules by failing to properly dispose of documents containing consumers' credit and personally identifiable information. In announcing the settlement, the FTC put all companies on notice that it is taking such failures seriously. A $50,000 settlement might seem low when measured against the potential for financial harm to individuals as a result of the company's negligence, but in addition to the negative PR for American Mortgage, the settlement includes an obligation to obtain an audit, every two years for the next 10 years, from a qualified, independent, third-party professional to ensure that its security program meets the standards of the order. Any similar failures by this company during the next decade will be met with more severe punishment. That, indeed, is a

Heartland Payment Systems, the sixth-largest payments processor in the U.S., announced Monday that its processing systems were breached in 2008, exposing an undetermined number of consumers to potential fraud. Meanwhile, Forcht Bank, one of the 10 largest banks in Kentucky, told its customers it would begin reissuing 8,500 debit cards after being informed by its own card processor of a possible breach. In the case of Heartland, while the company continues to assess the damages inflicted by the attack, Robert Baldwin, the company's president and CFO, says law enforcement has already noted that the attack against his company is part of a wider cyber fraud operation. "The indication that it is tied to wider cyber fraud operation comes directly from conversations with the Department of Justice and the U.S. Secret Service," Baldwin says. The company says it believes the breach has been contained. Heartland, headquartered in Princeton, NJ, handles approximately 100 million transactions per month, although the number of unique cardholders is much lower. "It is still a question as to the percentage of the data flow they were able to get," Baldwin says, adding he would not speculate on the number of cards potentially exposed. Specifics surrounding when the breach occurred are still being analyzed. But Baldwin says two forensic auditing teams have been working on the breach analysis and investigation since late 2008, after Heartland received the notification from Visa and MasterCard. The investigation began immediately after the credit card companies told Heartland they saw suspicious activity surrounding processed card transactions. Described by Baldwin as "quite a sophisticated attack," he says it has been challenging to discover exactly how it happened.

Privacy Issues and Education: Peter Kosmala, International Association of Privacy Professionals April 1, 2009 From the Heartland data breach to the new Massachusetts data protection law, privacy is the hot topic in business and government. In an exclusive interview, Peter Kosmala, assistant director of the International Association of Privacy Professionals (IAPP), discusses: The top privacy topics in business and government; How organizations are tackling these issues; The potential impact of state and federal privacy legislation; The value of the Certified Information Privacy Professional (CIPP) credential. Kosmala oversees product management for the IAPP with specific oversight of distance learning products, privacy certifications and industry awards programs. He also manages business development efforts between the IAPP and peer organizations in the information security, information auditing and legal compliance arenas as well as organizations based in the Asia-Pacific region. The IAPP, based in York, Maine, was founded in 2000 with a mission to define, promote and improve the privacy profession globally.

US senators have drafted legislation that would give the federal government unprecedented authority over the nation's critical infrastructure, including the power to shut down or limit traffic on private networks during emergencies. The bill would also establish a broad set of cybersecurity standards that would be imposed on the government and the private sector, including companies that provide software, IT work or other services to networks that are deemed to be critical infrastructure. It would also mandate licenses for all individuals administering to strategically important networks. The bill, which is being co-sponsored by Senate Commerce Committee chairman John Rockefeller IV and Senator Olympia Snowe, was expected to be referred to a senate committee on Wednesday. Shortly after a working draft of the legislation began circulating, some industry groups lined up to criticize it for giving the government too much control over the internet and the private companies that make it possible. "This gives the president too much power and there's too little oversight, if there's any at all," said Gregory Nojeim, senior counsel at the Center for Democracy and Technology. "It gives him the power to act in the interest of national security, a vague term that has been broadly defined." Nojeim was pointing to language in the bill that permits the president to "order the limitation or shutdown of internet traffic to and from any compromised federal government or United States critical infrastructure information system or network" after first declaring a national cybersecurity emergency. A separate provision allows the executive in chief to "order the disconnection of any federal government or United States critical infrastructure information systems or networks in the interest of national security." "It applies to any critical infrastructure," Nojeim added. "Surely, the internet is one." The bill would also require NIST, or the National Institute of Standards and Techn

The theft in 2006 of an employee laptop that contained personal information on millions of veterans taught the Veterans Affairs Department some hard lessons. VA became "the poster child of data breaches," said Kathryn Maginnis, the department's associate deputy assistant secretary for risk management and incident response. As a result of that incident and several breaches that followed, the department developed a comprehensive incident response program and incident resolution team that evaluates all serious exposures of sensitive data. "We have a culture of report, report, report," Maginnis said at the recent FOSE conference in Washington. The incident response program received a perfect score last year in the VA inspector general's Federal Information Security Management Act audit, and Maginnis said she expects to get another perfect score this year. The department developed two in-house online tools to help track and evaluate incidents, said Amanda Graves Scott, director of the incident resolution team. The Formal Event Review and Evaluation Tool uses a 56-question questionnaire to determine the risk category of a data breach, and the VA Incident Response Tracking System automates a manual tracking process for information technology incident response.

Forrester has a recommendation for CISOs struggling with how to secure corporate data: Stop trying so hard. Despite years of investments in technology and processes, protecting enterprise-wide data remains a maddeningly elusive goal for chief information security officers (CISOs). Software-as-a-service (SaaS), Web 2.0 technologies, and consumerized hardware increase the number of escape routes for sensitive information. Regulations, statutes, and contractual expectations drown CISOs in audit requests and ratchet up the pressure to do something about the problem. Hordes of vendors confuse CISOs with innumerable sales pitches. Instead of beating your head against the wall, devolve responsibility to the business, keeping controls closest to the people who use the data. IT security should be primarily responsible only for deploying data protection technologies that require minimal or no customization.

This week, the Government Accountability Office issued a report related to privacy and security issues at FDA and another report about the agency's plans to modernize its IT systems, Government Health IT reports. Privacy and Security Report On Monday, GAO released a report suggesting that FDA has not included sufficient privacy and security protections in its plans for a medical product safety monitoring system called the Sentinel Initiative. The system would use data from insurance companies, academic institutions, government agencies and health care providers to track the performance of medications and medical devices. According to the FDA Amendments Act of 2007, the initiative would have access to data from 25 million people by mid-2010 and 100 million people by mid-2012 (Foxhall, Government Health IT, 6/2). For the report, GAO conducted an audit of FDA's planning process for Sentinel from May 2008 to May 2009.

Enterprise role management is key in efficiently managing user access rights and enforcing access policies such as segregation of duties. Roles help companies group coarse- and fine-grained access rights (like access to and functionality within a financial accounts application) into groups, called enterprise roles. These enterprise roles map to job functions and are only allowed access rights that don't violate segregation of duties. For instance, a financial clerk role can't contain fine-grained access rights that allow someone in the role to access the accounts receivable and accounts payable parts of the financial application. The processes and tools necessary for effective role management consist of role mining and design (automatic discovery and management of roles based on existing access rights and entitlements data), role recertification (a process performed typically every six months when a business role custodian certifies what access rights should belong to a role), and access recertification (a process performed typically every 3-6 months to ensure all user access is understood and was granted in an audited way).

A very heated reaction has followed the interview I conducted yesterday with Robert Carr, CEO of Heartland Payment Systems. One reader even said the resulting Q&A made his "blood boil." Why the outrage? Because Carr did something a lot of people find unacceptable. He threw someone else under the proverbial bus for his company's failure to keep customer credit and debit card numbers out of evil hands. Specifically, he thrust an angry finger at the QSAs who came in to inspect the security controls Heartland had in place to meet the requirements of PCI security. In the article, [Heartland CEO on Data Breach: QSAs Let Us Down] Carr said, "The audits done by our QSAs (Qualified Security Assessors) were of no value whatsoever. To the extent that they were telling us we were secure beforehand, that we were PCI compliant, was a major problem. The QSAs in our shop didn't even know this was a common attack vector being used against other companies. We learned that 300 other companies had been attacked by the same malware. I thought, 'You've got to be kidding me.' That people would know the exact attack vector and not tell major players in the industry is unthinkable to me. I still can't reconcile that." That one comment brought down the house, and not in a favorable way. "I just read Bill Brenner's interview with Heartland Payment Systems' CEO Bob Carr and truthfully, my blood is boiling," Mike Rothman, SVP of strategy at eIQnetworks and chief blogger at Security Incite wrote in a counterpoint piece CSOonline ran today. "Basically, he's throwing his QSA under the bus for the massive data breach that happened under his watch. Basically, because the QSA didn't find anything, therefore he should be off the hook. I say that's a load of crap."

The Federal Trade Commission today approved a final consent order settling claims that CVS Caremark violated customers' privacy and the Health Information Portability and Accountability Act (HIPAA) when it failed to dispose of records properly last year. Earlier this year, CVS Caremark agreed to settle FTC charges that it failed to take reasonable and appropriate security measures to protect the sensitive financial and medical information of its customers and employees, in violation of federal law. In a separate but related agreement, the company's pharmacy chain also has agreed to pay $2.25 million to resolve Department of Health and Human Services allegations that it violated HIPAA regulations. "This is a case that will restore appropriate privacy protections to tens of millions of people across the country," said FTC chairman William Kovacic following the settlement. "It also sends a strong message to other organizations that possess consumers' protected personal information. They are required to secure consumers' private information." Under the final consent order, CVS Caremark is required to rebuild its security and confidentiality program, which will be audited every two years for the next 20 years. The HHS settlement requires the company to develop a new training program to instruct employees on how to handle patient data.

A New Jersey credit-card processor disclosed a data breach that analysts said may rank among the biggest ever reported. Heartland Payment Systems Inc. said Tuesday that cyber criminals compromised its computer network, gaining access to customer information associated with the 100 million card transactions it handles each month. The company said it couldn't estimate how many customer records may have been improperly accessed, but said the data compromised include the information on a card's magnetic strip -- card number, expiration date and some internal bank codes -- that could be used to duplicate a card. Heartland, of Princeton, N.J., processes transactions for more than 250,000 businesses nationwide, including restaurants and smaller retailers. Avivah Litan, an analyst at research company Gartner, called it the largest card-data breach ever, based on her conversations with industry executives. Previously, the largest known breach occurred when around 45 million card numbers were stolen from retail company TJX Cos. in 2005 and 2006. Robert Baldwin, Heartland's president and chief financial officer, said it was too early to say how many records were accessed and that calling it the largest-ever breach would be "speculative." Representatives of Visa Inc. and MasterCard Inc. alerted Heartland to a pattern of fraudulent transactions on accounts the processor handled sometime last fall, Mr. Baldwin said. But an internal investigation and audits failed to detect a security breach. Last week, however, a forensic investigator discovered evidence of the breach. Mr. Baldwin said Heartland was targeted with malicious software that was "light-years more sophisticated" than malevolent programs commonly downloaded from the Internet.

Both panels that advise the national coordinator for health IT plan to focus on privacy and security standards needed to support meaningful use of electronic health records when they meet later this month, according to notices in today's Federal Register. The Health IT Policy Committee, led by Dr. David Blumenthal, the national coordinator for health IT, will direct more of its discussion at its upcoming Sept. 18 meeting on health information privacy and security as it makes progress in defining meaningful use under the stimulus law, according to the notice. Likewise, the companion Health IT Standards Committee, which meets Sept. 15, will concentrate on refining standards recommendations made by its privacy and security work group. At the Standards Committee's previous meeting Aug. 20, its privacy and security workgroup presented standards for authentication, authorization, auditing and secure data transmission of health information in EHR products as well as the infrastructure that hosts them. The work of the panel includes protecting data inside an enterprise as well as data exchange between enterprises, "because security is an end to end process," noted Dr. John Halamka, the committee's chairman in a post on his blog, "Life as a Healthcare CIO."

Beyond PCI: Other Regulations to Look For in 2009 Just a few days ago, the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration announced the enactment of comprehensive new rules regarding card practices. These rules, which will not take effect until July 1, 2010, impose restrictions on a number of controversial issuer practices, including interest rate increases, late fees and double-cycle billing. Many industry observers predict that the rules will result in less credit being made available, and on stricter terms, than has been the case over the last several years. These rules may not be the end of the matter. Rep. Carolyn Maloney (D-NY), who in 2008 introduced the Credit Cardholders' Bill of Rights Act of 2008 (which sought to regulate many of the same practices as the then-proposed Fed rules), stated that she was disappointed in the delayed effectiveness of the Fed rules and promised to revive the Credit Cardholders' Bill of Rights in 2009 to, as she put it, "bridge the gap" between now and the effective date of the Fed rules.