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California enacts full disclosure security breach law

Dear Madam, we let your data get away. Sorry!

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From today (July 1) all firms doing business in California will be obliged to advise their customers what data might be disclosed if their systems are ever successfully attacked.

Under the Security Breach Information Act, companies whose systems are broken into by crackers will be expected to report attacks to customers directly or via a notice on their Web site in cases where credit card information or other sensitive customer data has been compromised.

Failure to disclose such embarrassing details at the pertinent time will open the way for California residents to sue offending companies.

The full disclosure regulations, a first of their kind, are designed to put a brake on the growing problem of identity theft - America's fastest growing crime.

The new regulations may become a model for Federal legislation. US Democrat Senator Dianne Feinstein has this week introduced federal legislation based on the California law.

The new law has e-tailers worried and security vendors rubbing their hands in glee. Expect to new rules to form a cornerstone for sales pitches from intrusion detction/prevention appliance vendors from now on, regardless of whether you live in California or not.

While you wait for the inevitable call you can peruse the Security Breach Information Act for yourself here. ®

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