When A Company Folds, Who Guards Your Data's Privacy? - CIO.com - Business Technology Leadership - 0 views
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Karl Wabst on 21 Apr 09IT and business both understand the need to protect regulated customer and business data -- so long as they're in business, analysts say. Here's a look at how some folding businesses are falling short protecting data and the possible liabilities for the IT group and CIO. From HIPPA to Sarbox, a slew of regulations to protect customer and employee data force CIOs to step lively to comply. The punishment for failure to do so is costly and even dire. But once a company folds-and more are folding every week given the economy-what happens to that data? Who in the business and IT could be hit by the splatter if it all hits the fan? "Certain companies have been disposing of records containing sensitive consumer information in very questionable ways, including by leaving in bags at the curb, tossing it in public dumpsters, leaving it in vacant properties and/or leaving it behind in the offices and other facilities once they've gone out of business and left those offices," says Jacqueline Klosek, a senior counsel in Goodwin Procter's Business Law Department and a member of its Intellectual Property Group. "In addition, company computers, often containing personal data, will find their ways to the auction block," she adds. "All too often, the discarded documents and computer files will sensitive data, such as credit card numbers, social security numbers and driver's licenses numbers. This is the just the kind of data that can be used to commit identity theft." Discarded and unguarded data is now low-hanging fruit for criminal harvesters and corporate spies. "Recent client activity supports that competitors are beginning to buy up such auction devices specifically with the intention of trying to salvage the data," says James DeLuccia, author of IT Compliance & Controls. "Hard drives are being removed and sold online, or whole servers are sold via Craigslist and Ebay." In some cases, the courts insist data be sold during a bankruptcy. "Company servers, once I restore