Monday, November 21, 2005

A modest proposal for security breach notification

Currently, there's a significant debate raging in the United States as the Congress considers a whole range of proposals related to an organization's obligation to notify individuals if the security related to personal information is compromised. The "gold standard" is that set out in California's legislation (Civil Code Sections 1798.29 and 1798.82), which requires notification of consumers if certain kinds of unencripted personal information is disclosed. Other states have followed California's lead with varying degrees of similarity.

Many pro-privacy commentators are concerned that Congress will ultimately enact legislation, such as HR 4127, which will pre-empt state laws and will only require notification if there is a "a reasonable basis to conclude that there is a significant risk of identity theft". This threshold is too high, it is argued, and consumers will never know when their information has been released. (See: DATA bill will not effectively help deal with the very real threat of ID theft.) Other commentators are concerned that if the threshold is too low, too many notices will be sent out to consumers and the notices will eventually be ignored and be meaningless.

For the purposes of the debate, allow me to suggest a compromise:

  1. The following information shall be defined to be "Sensitive Personal Information":
    • Social security number.
    • Driver's license number.
    • State-issued identification card number.
    • Passport number.
    • Account number, credit or debit card number, in combination with any required security code, access code, or password that would permit access to an individual's financial account.
    • Information related to an individual's physical or mental health.
    • Telephone number, if it is unlisted.
    • Income information.
    • Information related to an individual's pardoned criminal convictions.
    • Information related to an individual's religious, political or other personal beliefs, unless such beliefs have been publicly communicated by the individual in a context where there is no reasonable expectation of privacy.
  2. Every orgnaization shall be required to report all breaches or suspected breaches of Sensitive Personal Information (communication of such information to an unauthorized third party) to the Federal Trade Commission, along with details of the breach or suspected breach.
  3. The FTC shall develop guidelines to determine what information, if compromised, may reasonably place the individual at greater risk of fraud or other harms.
  4. The FTC shall promptly determine, with reference to the guidelines, whether the individuals should be notified. If the FTC is of the view that notification is warranted, it shall issue a binding order to the organization.
  5. A summary of all notifications made by organizations to the FTC shall be made available by the FTC on its website.

I don't think this is the magic bullet, but I expect it would satisfy the stated objectives of both sides of the debate.

Any thoughts? Comments are welcomed, either using the blog's comment feature or via e-mail.

UPDATE 20051121: Added reference to letter by privacy and consumer groups.

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