Friday, April 28, 2006

It's the cover-up, stupid

In the hundreds of security and privacy breaches reported in the last few years, the companies involved that have fared the best are those that have been forthcoming with information and appear to be genuinely interested in the well being of the people involved. (I say "appear to be" because it doesn't really have to be sincere, but it has to benefit the individual. Once you can fake sincerity, you've got it made.) Those that have fared the worst are those that lied, misled customers, otherwise tried to cover it up or trivialize the breach.

Accidents happen and any company that has customer data on hand is at risk, to some degree or another. No security system is perfect. The biggest consequence of a breach is probably not an award of damages from the court but the loss of trust of customers and other stakeholders. The senior director at Lexis Nexis is quoted in a recent Network World article (Disclosure meant less pain in data theft) as confirming this:

But when the damage became clear, LexisNexis made an immediate decision to be forthcoming and transparent about the breach, he said. "We tried to do the best job we could," he said.

The company contacted all those who were affected by the attack using the framework of a California data security disclosure law passed in 2003 as a guide, Cronin said.

The law is catching up after the high-profile cases of last year, including ChoicePoint, a data broker that acknowledged divulging sensitive personal information to identity thieves posing as customers. So far in the U.S., 20 states have implemented notification laws, and a federal law is under consideration.

After the data breach, LexisNexis took several steps to implement stronger security, Cronin said. The company reviewed the security of all its Web applications and created new procedures for verifying customers with access to sensitive data, he said.

LexisNexis encouraged certain customers to sign up for anti-virus software. It revamped online security access, looking at password complexity and expiration times. The company also implemented measures to automatically detect anomalies in use of its products to identity potential security problems, Cronin said.

LexisNexis learned other lessons. Passwords are dead, Cronin said, and two-factor authentication is recommended. But front-door perimeter attacks are less likely than the persistent weak link: people.

Now ask yourself why ChoicePoint is synonymous with "privacy breach" and not Lexis Nexis.

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