News Column

Data Breaches: A Year in Review

Dec. 19, 2011
online pirate

There are hundreds of ways that a consumer's personal information may be lost, stolen or exposed. An employee may lose a laptop, hackers may download credit card numbers or sensitive personal data may be accidentally exposed online.

Privacy Rights Clearinghouse's Chronology of Data Breaches list counts the number of records leaked that contain information useful to identity thieves, such as Social Security numbers, financial account numbers, driver's license numbers - and in some states, medical information.

2011 was a significant year for data security breaches. PRC tracked 535 breaches involving 30.4 million sensitive records. This brings the total reported records breached in the U.S. since 2005 to 543 million. "This is a conservative number," says PRC Director Beth Givens. "We generally learn about breaches that garner media attention. Unfortunately, many do not. And, because many states do not require companies to report data breaches to a central clearinghouse, data breaches occur that we never hear about. Our Chronology is only a sampling."

Data breaches of sensitive information, especially Social Security and credit card numbers, make consumers vulnerable to identity theft. According to a 2009 report by Javelin Research & Strategy, individuals are four times more likely to be the victim of identity theft in the year after receiving a data breach notification letter. But even breaches that contain data as seemingly innocuous as names and an email address can be used by fraudsters to trick consumers into revealing information that can lead to identity theft.

Unfortunately, it is virtually impossible for individuals to protect themselves from a data breach. It is up to organizations that collect data on consumers to take the steps to ensure the privacy and security of the data they collect and maintain.

The following half dozen are PRC's top picks for the most significant data breaches in 2011:

1. Sony PlayStation (April 27) - Sony discovered an external intrusion on PlayStation Network (PSN) and its Qriocity music service around April 19. Sony blocked users from playing online games or accessing services like Netflix and Hulu Plus on April 22. The blockage lasted for seven days. Sony believes criminal hacker(s) obtained names, addresses, email addresses, dates of birth, PSN/Qriocity password and login, and online IDs for multiple users. The attacker may have also stolen users' purchase history, billing address, and password security questions. Over the course of the next several months, Sony discovered that the hackers gained access to 101.6 million records, including 12 million unencrypted credit card numbers.

The Sony breach highlights the importance of password hygiene. Passwords are frequently the only thing protecting our private information from prying eyes. Many websites that store your personal information require just a user name and password for protection. Password-protected websites are becoming more vulnerable because often people use the same passwords on numerous sites.

2. Epsilon (April 2) - Epsilon, an email service provider for companies, reported a breach that affected approximately 75 client companies. Email addresses and customer names were affected. Epsilon has not disclosed the names of the companies affected or the total number of names stolen. However, millions of customers received notices from a growing list of companies, making this the largest security breach ever. Conservative estimates place the number of customer email addresses breached at 50 to 60 million. The number of customer emails exposed may have reached 250 million.

Compromised email addresses and names may seem innocuous to some, but victims may fall prey to spear phishing. Spear phishing occurs when a criminal sends an email that sounds and looks like it's from a company the recipient has an account with because it addresses him or her by name. A spear-phishing message might say, "Hello Mr. Anderson, Because of the recent hacking incident affecting some Acme customers, we are asking you to visit this website (URL provided) and update your security settings." The email tries to convince trusting readers to "bite" on the bait and go to that website, and then divulge other information like Social Security numbers and credit card numbers. The result could be as serious as identity theft.

The Epsilon breach is also significant because it highlights the risk of cloud-based computing systems and the need for greater cloud security measures.

3. Sutter Physicians Services (SPS) and Sutter Medical Foundation (SMF) (Nov. 16) -- A company-issued desktop computer was stolen from SMF's administrative offices in Sacramento, California, during the weekend of Oct. 15. Although the data was password protected, it was not encrypted. Approximately 3.3 million patients whose health care provider is supported by SPS had their names, addresses, dates of birth, phone numbers, email addresses, medical record numbers and health insurance plan name exposed. An additional 934,000 SMF patients had dates of services and description of medical diagnoses and/or procedures used for business operations, bringing the total to 4.2 million patients. At least two lawsuits have been filed against Sutter Health. One class-action suit alleges that Sutter Health was negligent in safeguarding its computers and data, and then did not notify the millions of patients whose data went missing within the time required by state law.

The security lapse occurred on two levels: both the data itself (being unencrypted) and the physical location (stored in an unsecure location). Although no Social Security numbers or financial information was apparently exposed, all the data elements needed for medical identity theft were included in the stolen records.

4. Texas Comptroller's Office (April 11) - Information from three Texas agencies was discovered to be accessible on a public server. Sometime between January and May 2010, unencrypted data was transferred from the Teacher Retirement Center of Texas, the Texas Workforce Commission (TWC) and the Employees Retirement System of Texas. It ended up on a state-controlled public server as early as April 2010 and was not discovered until March 31, 2011. Sensitive information such as names, Social Security numbers, addresses, dates of birth and driver's license numbers could have been exposed.

A spokesperson from the Texas Comptroller's Office claims that the breach occurred because numerous procedures were not followed. Some employees were fired for their roles in the incident. Approximately two million of the 3.5 million individuals possibly affected were unemployed insurance claimants who may have had their names, Social Security numbers and mailing addresses exposed. The birth dates and driver's license numbers of some of these people were also exposed. Two class action lawsuits have been filed on behalf of the 3.5 million Texans affected by the breach. One such lawsuit seeks a $1,000 statutory penalty for each individual.

Although all breaches of sensitive personal information are serious, the Texas Comptroller breach is particularly significant because individuals generally do not have a choice when providing personal information to a government agency. It is therefore vitally important that government agencies act as responsible stewards of personal data.

5. Health Net (March 15) -- Nine data servers containing sensitive health information went missing from Health Net's data center in Rancho Cordova, Calif. The servers contained the personal information of 1.9 million current and former policyholders, compromising their names, addresses, health information, Social Security numbers and financial information.

Not only was Health Net the first massive medical breach of the year, but the company waited three months before notifying affected individuals. The servers were discovered missing in January, but policyholders were not notified until March. The breach highlights the importance of timely notification.

6. Tricare Management Activity, Science Applications International Corporation (SAIC) (Sept. 30) -- The car theft of backup tapes resulted in the exposure of protected health information from patients of military hospitals and clinics. Uniformed Service members, retirees and their families were affected. Patient data from the military health system dating from 1992 to September 2011 could have been compromised. It included Social Security numbers, addresses, phone numbers, clinical notes, laboratory tests, prescriptions, and other medical information. Four people have filed a $4.9 billion lawsuit over the improper disclosure of active and retired military personnel and family data. The lawsuit would give $1,000 to each of the affected individuals. SAIC reported that 5,117,799 people were affected by the breach.



Source: (c) 2011 Privacy Rights Clearinghouse


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