NY enacts security breaches disclosure law

Firms obliged to own up to gaffes

New York has enacted an information security breaches law which will oblige firms and local government agencies to notify customers in the state if their personal information is taken or its systems are hacked into.

The legislation is designed to promote a culture of security. It also helps protect consumers by giving them the information they need to head off possible identity theft when sensitive details such as Social Security, driver's license and credit card numbers become exposed. Organisation with customers in New York are obliged to notify these people of a breach as soon as practically possible.

The Information Security Breach and Notification Act in New York is broadly similar to security breaches laws enacted in California more than two years ago. Legislation requiring consumer notification of data security breaches has been approved in at least 15 states since then. Federal security disclosure laws are under consideration but opposed by some who fear it might dilute state laws, Red Herring reports.

New York's decision to press ahead with its legislation follows a series of high profile consumer data security breaches involving US firms including data mining firm ChoicePoint, payment processing firm CardSystems Solutions and others.

"The events of the last few months underscore the urgency of protecting consumers. If a person is not aware that he or she has been a victim of identity theft, then the damage done could be severe and irreversible. Prompt notification gives New Yorkers needed protections," said New York State Assembly member James Brennan, who sponsored the law. "In the last year, over 9,000 New Yorkers were exposed to identity theft because of inadequate security and poor notification procedures." ®

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