Did someone steal your tax return? You are not alone. Indeed, the rise in tax-related identity theft has been well documented. In 2015, the FTC reported a 50% increase in identity theft complaints. A primary cause for that increase was the rise in tax-related identity theft. In response to this increase, the IRS has made stopping identity theft and refund fraud a top priority. From 2011-2014, the IRS reported that it stopped 19 million suspicious returns and protected more than $63 billion in fraudulent returns. … More
Category Archives: Identity Theft
Presented by Foley Hoag LLP and PwC
A data breach is a business crisis. What should you do?
Learn first-hand as Foley Hoag LLP and PwC walk you through the practical and legal aspects of responding to a data security incident. From understanding how to be prepared to thinking through best practices, this webinar is designed to help you get a handle on an emergency that every business must confront.… More
Editor’s note: This is the fourth in a continuing end-of-year series. See our previous posts on trade secrets, state regulation and law enforcement, and HIPAA compliance. Our last two posts will focus on the energy industry, and federal regulation and law enforcement.
In 2016, new and alarming cybersecurity threats emerged, raising concerns in government, the business world,… More
The U.S. Department of Homeland Security says that all employees need to know the signs of a cyber-attack, not just those who work in the IT field. This is increasingly important as more companies move business operations online. The Department stresses employees should make passwords complex, beware of phishing emails and report all suspicious activity to their company’s IT department.
In Case You Missed It: US and EU officials signed on to the so-called “Privacy Umbrella” deal last week. The agreement is designed to protect the personal data of EU citizens when it is transferred to the US for law enforcement purposes — a sort of criminal counterpart to the sturdier-sounding Privacy Shield we discussed here last Thursday. And, like the Shield, the Umbrella has drawn its share of critics,… More
Hedge Fund Association Symposium in Boston
The Securities and Exchange Commission has reiterated that cybersecurity threats and the adoption of sufficient policies and procedures will remain a compliance and examination priority for 2016. Please join us for a discussion of the primary threats facing managers of private funds, particularly emerging managers, and practical steps that they should be taking to protect their business from cybersecurity threats.
This event is complimentary for HFA members and friends of Foley Hoag. … More
Unfortunately, health care providers are the perfect mark for theft and extortion because they have huge amounts of sensitive information and maintain such information in computer databases at risk of infiltration. On May 17, Foley Hoag presented a webinar discussing the ongoing crime sprees involving theft of patients’ identities and health information; ransomware involved in these crimes; related data security issues affecting health care providers; and how they implicate law enforcement and the criminal law aspects of HIPAA.… More
As litigators, we help clients resolve conflicts that have matured into disputes. In the realm of cybersecurity, we defend claims brought by private parties or governmental entities against companies facing the fallout from a data breach.
In advising clients in the context of litigation, we have identified tools that are available to mitigate or prevent the types of breaches that we see in litigation. In the area of cybersecurity,… More
Hospitals are increasingly the target of hackers, particularly in the form of “ransomware.” What follows is a primer on ransomware and how to avoid being a target of it.
What is ransomware?
As a follow-up to our recent discussion of IRS-related phishing attempts, here are a few quick tips to stay out of the phishing traps:
- In general, the IRS does not communicate with taxpayers via e-mail, so any time someone receives an e-mail from the “IRS,” they should be suspicious at the outset.
- Even if the IRS did correspond with taxpayers via e-mail,…
This article was originally published in Law360 with permission to reprint.
Businesses confronting data breaches can face litigation from private consumers as well as from governmental entities. Managing litigation risk varies in these contexts because of the limitations of bringing private rights of action.… More
EU Commission and United States agree on new framework for transatlantic data flows: EU-US Privacy Shield
What follows below is the EU’s press release regarding the agreement on a replacement for the EU-US Safe Harbor. We are working to get details and will schedule a webinar on the new framework shortly.
The European Commission and the United States have agreed on a new framework for transatlantic data flows: the EU-US Privacy Shield.
Today, the College of Commissioners approved the political agreement reached and has mandated Vice-President Ansip and Commissioner Jourová to prepare the necessary steps to put in place the new arrangement.… More
Cybersecurity and Risk Management: “Navigating the Digital Age: The Definitive Cybersecurity Guide for Directors and Officers”
A timely new resource for business executives, technology professionals, and lawyers alike is the newly-published Navigating the Digital Age: The Definitive Cybersecurity Guide for Directors and Officers from the New York Stock Exchange and Palo Alto Networks. At 355 pages, the guide provides information from dozens of contributors from around the country and from various backgrounds. The guide explores 46 separate topics, focusing on such issues as prevention,… More
Over one year ago, our colleague Chris Hart argued that the District of New Jersey court’s decision in FTC v. Wyndham Worldwide Corp. et. al., No. 13-1887-ES, “point[ed] to the possibility that the FTC has potentially broad power, and a far reach, to bring actions for data breaches as a general matter.” That possibility became substantially more concrete this week,… More
Seventh Circuit Allows Data Breach Class Action to Proceed Against Neiman Marcus, Despite Lack of Current Harm to Credit Card Holders
Data breaches are often followed by class action suits in which the affected individuals seek damages. Corporations defending against such suits have used a 2013 Supreme Court case, Clapper v. Amnesty International, 133 S. Ct. 1138 (2013), to fight off such claims. In Clapper, the Supreme Court held that, in order for a plaintiff who alleges future harm to have the necessary Article III standing to sue in federal court,… More
Last week, the Cybersecurity Unit of the Department of Justice (DOJ) issued a list of “best practices” for companies concerning preparing for and responding to cyber-attacks. The report details the lessons federal prosecutors have learned while handling cyber investigations, as well as feedback from private sector companies. Some of the key pieces of advice are:
- Identify Your “Crown Jewels”: Before creating a cyber-incident response plan,…
The SplashData list of worst passwords of 2014 was just published, and it looks very similar to the list in 2013, 2012, 2011, etc.:
Change from 2013
With every swipe of a credit card this holiday season, consumers put their faith in the companies that process and store their information. Yet, it is no secret that data breaches are on the rise, hitting companies large and small. Massive data breaches recently struck Target and Home Depot, to just name a few, and these two breaches alone affected hundreds of millions of consumers and cost the companies hundreds of millions of dollars.… More
As previously discussed here, Target suffered a massive data breach at the end of last year that compromised the information of 70 million or more consumers. Within days of the announcement, class action lawsuits were filed against Target around the country, including in California, Massachusetts, Minnesota, Ohio, and Utah.… More
Now that the initial media blitz about the massive Target breach has passed, it is time to look ahead at the implications:
- Legislation: In the past, we have seen major breaches drive legislative change. But now that most states have data security statutes, it seems unlikely that much will happen at the state level. And action at the federal level has been long promised, but remains a distant vision.…
Interesting article in Forbes, "The Zero-Day Salesmen," about "government agencies who purchase such “zero-day” exploits, or hacking techniques that use undisclosed flaws in software, with the explicit intention of invading or disrupting the computers and phones of crime suspects and intelligence targets." More
The Massachusetts Office of Consumer Affairs and Business Regulation has issued its first annual report on data breaches. Since Massachusetts has one of the more strict state laws on data security and breach reporting, this report bears close attention for trends across the nation. Some of the highlights in this summary, which covers 2007-2011:
- Through September 30, 2011, the largest share of breaches was not in the financial sector,…
In an article that repeats a common theme in this space, this week’s Economist talks about how researchers are trying to help ordinary people toughen up their passwords. But despite the efforts of these researchers, the article’s conclusion is a gloomy one:
The upshot is that there is probably no right answer. All security is irritating (ask anyone who flies regularly), and there is a constant tension between people’s desire to be safe and their desire for things to be simple.… More
A recent issue of the Journal of the American Medical Association takes on the issue of physician medical identify theft; here’s the abstract:
It took several months for one physician to learn that she was a victim of medical identity theft. This realization occurred after patients reported that her name was on their Medicare Summary Notices although they had never seen her. A fraudulent clinical practice had enrolled in Medicare using her name without her knowledge.… More
The latest legislator to enter into the federal data security and privacy sweepstakes is Senator Richard Blumenthal (D-CT) who introduced legislation, S. 1535, on September 8. This bill, if passed, would require companies dealing with consumers to strengthen their data security and privacy policies. In particular, Senator Blumenthal’s bill, “The Personal Data Protection and Breach Accountability Act,” would required businesses that collect the personal information of over 10,000 customers to employ specific privacy and security measures,… More
We are six months into 2011, and it seems destined to be “The Year of the Breach.” In just the past few months, major American (and multi-national) corporations and institutions have reported that they have been the victims of some kind of security breach:
I love this quote from a recent Wall Street Journal article:
“There’s no such thing as immunity to identity theft,” says David Lincicum, a staff attorney for the Federal Trade Commission’s division of privacy and identity protection.
It’s a dose of reality for us all — we need to plan for identify theft once it happens, not just plan to prevent it. More
In January, we provided some helpful hints about passwords, in our entry: Is Your Password Still "123456"? If So, It’s Time for a Change.
It’s been nearly a year, so it’s time to change your password again. In case you need some help, we liked the guidance provided by the public radio program, Marketplace, in a recent broadcast. Ironically, these recommendations come from an expert whose company’s password databases had just been hacked. … More
Last week was a tough week for Albert Gonzalez, the so-called "leader of the largest hacking and identity theft ring ever prosecuted by the U.S. government." Gonzalez received a sentence of 20 years of imprisonment in two separate federal cases against him. The hacker, known variously as "segvec," "soupnazi" and "j4guar17" pled guilty in the New Jersey and Massachusetts cases for his role as mastermind of the two largest financial data breaches ever,… More
FTC Tells Businesses, Schools and Local Governments: Stop Sharing Personal Information On Peer-To-Peer Filesharing Networks
The Federal Trade Commission (FTC) announced yesterday that it had notified "almost 100" companies and organizations, including schools and local governments, that sensitive personal information from those entities was being shared across peer-to-peer (P2P) filesharing networks. This has apparently resulted in circulation of customer personal information, health information, Social Security numbers and other sensitive data.
Poorly supervised use of P2P networks have frequently been the subject of unwanted attention,… More
In a press release issued last week, Massachusetts Attorney General Martha Coakley announced the opening of a "new, state-of-the-art Computer Forensics Lab in Boston" as part of the Attorney General’s Cyber Crime Initiative. Under the Initiative, the Attorney General’s office received funding from the U.S. Department of Justive to "develop a sustainable cyber crime information sharing program in Massachusetts" for the Massachusetts law inforcement community.… More
It just became a little cheaper and a little easier to access public court filings through PACER (the Public Access to Court Electronic Records), thanks to RECAP, an open-source Firefox plug-in designed to create a free secondary archive of PACER materials.
Court filings contained in PACER are public documents, and are, in theory, open to the public. But, in the past, the fact that these materials were either maintained in individual courthouses or,… More
Incident of the Week: Seattle Man Sentenced To Three Years In Prison For Using Peer-To-Peer Software To Steal Financial Records, Commit Identity Theft
Yesterday, Frederick Eugene Wood of Seattle was sentenced to 39 months in prison for using LimeWire peer-to-peer (P2P) software to obtain Social Security numbers, bank and financial records and tax returns, which he then used to commit identity theft. The complaint (.pdf) filed in federal court for the Western District of Washington in March alleged that Wood took advantage of the fact that users sometime install LimeWire or other peer-to-peer software on computers without limiting the directories and files made available to the peer-to-peer network. … More
Social Security Numbers (SSNs) Can Be Predicted Using Basic, Widely-Available Public Data. Social Security Administration Not Surprised, and Continues to Offer Detailed SSN Information to the Public
As has been recently reported, researchers from Carnegie Mellon University have announced that they have uncovered a method to accurately predict the Social Security Numbers (SSNs) of individuals by simply knowing two of the most basic and widely-available facts about people today: their dates of birth, and their States of birth. In their paper titled “Predicting Social Security Numbers from Public Data” (.pdf), researchers Alessandro Acquisti and Ralph Gross warn that they have uncovered a distinct and identifiable statistical pattern across SSNs of deceased persons –… More
According to recent reports from the Wall Street Journal and Computerworld, on June 30 the United States Secret Service, the Italian police and Italian postal service reached an agreement for the establishment of an international task force to fight cybercrime, including identity theft and computer hacking. Mark Sullivan, the director of the Secret Service, stated that cybercrime "is not a borderless crime and we believe there needs to be a reaction at an international level." … More
With the deadline for complying with the Massachusetts identity theft law just six months away, at least one state senator is still seeking changes to that law. In Senate Bill S173, which until now has received little public notice, State Senator Michael Morrissey proposes to make it easier for small businesses to comply, by requiring the state’s regulations to take account of a business’s resources as it requires compliance: … More
On June 11, 2009, six federal agencies issued answers to a set of frequently asked questions (FAQ) (.pdf) to “assist financial institutions, creditors, users of consumer reports and card issuers in complying with the final rulemaking” on identity theft. The agencies behind the FAQ are those that originally promulgated the Red Flags Rules (and issued Guidelines to assist covered entities in designing compliance programs): the Federal Trade Commission (FTC),… More
On Wednesday, May 13, 2009, the FTC released a "template" identity theft prevention program (.pdf) to guide businesses subject to a "low risk" of identity theft through the process of complying with federal Red Flags Rules. The FTC template was first announced on May 1, 2009 when the agency postponed enforcement of the general purpose Red Flags Rules until August 1, 2009 (see our posting here or our more detailed client alert here).… More
Last Minute Reprieve: FTC Postpones Deadline for Red Flags Compliance Until August 1, 2009 – Will Release “Template” For Compliant Identity Theft Prevention Program
On Thursday, April 30, 2009, the day before federal Red Flags Rules were set to go into effect for a wide range of businesses, the FTC published a notice on its website indicating that it is postponing the deadline (yet again) until August 1, 2009. Importantly, this delay appears to be imposed so that the FTC can provide businesses, many of which are confused about how to comply, a “template” identity theft prevention program. “For entities that have a low risk of identity theft, such as businesses that know their customers personally, the Commission will soon release a template to help them comply with the law.” The FTC indicates that it will make the template available through their website.
Cracking Down: FTC Fines Credit Research Firm $500,000 For Lax Security, Obtains Court Order Requiring Company to Develop “Comprehensive Information Security Program”
On Thursday, March 5, 2009, the FTC announced that it had reached a settlement with financial research firm Rental Research Services, Inc. (RRS) and its managing officer, Lee Mikkelson, to resolve the FTC’s claims that the firm had failed to provide adequate security for sensitive consumer information provided to identity thieves posing as legitimate users. This case provides a number of key lessons for businesses who have not considered whether their security practices amount to “unfair or deceptive acts or practices” under federal and state laws.
Data Breach: Not Only Can Happen to You, and Your Competitors (but Now It’s Being Publicly Reported)
As state data breach reporting regimes develop, we are going to be seeing more reporting of breaches to law enforcement authorities. If you want to see what this abstract concept of “reporting” looks like (and how your own reports might be listed for the public to see), go to the web site of the New Hampshire Attorney General. On that site, you can read about 20 New Hampshire breaches that have been reported thus far in 2009 for that modestly sized state. And if you want to get a feel for the national scope of data breaches,… More
Senators Jay Rockefeller (D-W.Va.), Chairman of the Senate Commerce, Science and Transportation Committee, Olympia Snowe (R-Maine) and Bill Nelson (D-Fla.) are drafting cybersecurity legislation that would establish a permanent national security czar reporting directly to the White House, according to a recent announcement from Senator Nelson and other reports. The proposed legislation would also
- require intelligence and Homeland Security officials to perform vulnerability assessments;…
The FTC Strikes Back: (Essentially) Everyone Should Be Complying With Red Flags Rules, Especially The Healthcare Industry
In a recent letter (.pdf) to the healthcare industry, the Federal Trade Commission (“FTC”) has issued its clearest pronouncement yet on which entities must comply with federal “Red Flag Rules” — the identity theft regulations that will go into effect for many businesses on May 1, 2009 (and have been in effect for banks and financial institutions since November 1, 2008). This latest guidance strongly suggests that if you are wondering whether the new federal regulations apply to you — then they probably do. In this post, we will recap the FTC’s recent guidance on who should be complying with the Rules.
Between March 11, 2009 and March 13, 2009, the International Association of Privacy Professionals (IAPP) hosted a Privacy Summit in Washington, D.C. that featured keynote presentations from fraud expert Frank W. Abagnale and information security guru Bruce Schneier. The three-day event included dozens of breakout sessions with industry experts and government officials. Read some of the highlights below. More
Cracking Down: FCC Initiates Enforcement Action Against Hundreds of Telecommunications Carriers For Failing to Certify Compliance With Customer Privacy Rules
On Tuesday, February 24, 2009, the Federal Communications Commission (FCC) issued an Omnibus Notice of Apparent Liability alleging that more than 600 telecommunications carriers have violated Section 222 of the Communications Act which "imposes the general duty on all telecommunications carriers to protect the confidentiality of their subscribers’ proprietary information" and the EPIC Customer Proprietary Network Information (CPNI) Order (22 FCC Rcd 6927), which requires each carrier to certify compliance with the regulations governing customer information. … More
On Thursday, February 26, 2009, the FTC released its list of top consumer complaints and for the ninth year in a row, identity theft was the number one issue for consumers. See here for the FTC’s release. Out of 1,223,370 complaints made to law enforcement organizations, identity theft accounted for 313,982 complaints, around 26% or all consumer complaints in 2008. This represents a 20% increase in identity theft complaints since 2007. … More
Adding to the Patchwork: HITECH Act Sets New “Floor” for Data Breach Notification of Certain Patient Information
On Tuesday, February 17, 2009, President Obama signed into law the widely-debated federal economic stimulus package, officially titled the American Recovery and Reinvestment Act of 2009, and with it, enacted the Health Information Technology for Economic and Clinical Health Act (HITECH Act). Much of the media attention on the HITECH Act has focused on the policies promoting health information technology a topic that President Obama touted throughout his campaign. However, the HITECH Act also contains myriad regulations that expand the security and privacy provisions of the Health Information Portability and Accountability Act of 1996 ("HIPAA"),… More
ALERT: Massachusetts Gives Businesses Until January 1, 2010 to Adopt Information Security Programs To Comply With Recent Identity Theft Regulations
On Thursday, February 12, 2009, the Massachusetts Office of Consumer Affairs and Business Regulation (OCABR) issued a public statement indicating that it is extending the May 1, 2009 deadline to comply with recent Massachusetts identity theft regulations until January 1, 2010.
The Massachusetts identity theft regulations affect entities that own, license, store or maintain personal information, including social security numbers, state identification numbers and financial account information,… More
It has been a bad week for the federal government’s own information security track record.
The first story comes from the FAA where hackers broke into the agency’s computer systems and stole personal information on some 45,000 individuals. The second story comes from Los Alamos National Laboratory, which confirmed the theft of 67 computers, 13 in the past year alone. In both instances the American people appear to have dogged a bullet. The electronic intrusion into the FAA appears to have been limited to a raid of personal information and did not interfere with air traffic control systems. … More
According to the Identity Theft Resource Center’s (ITRC) recently released report (.pdf) on data breaches in 2008, one of the top five causes of data breaches are what the ITRC labels “accidental exposure.” [For our earlier coverage on the ITRC’s report see this link.] The ITRC reports that accidental exposure amount to 95 of the 656 data breaches in 2008.
ITRC considers “accidental exposure”… More
According to a recently-released report from McAfee, the downturn in the economy is creating a “perfect information security risk storm.” The report, entitled “Unsecured Economies: Protecting Vital Information,” can be found here [Note: MacAfee requires registration to downloade the report]. McAfee bases its findings on a worldwide survey of 1,000 IT decision makers.
The McAfee Report makes four key findings:
- Increasingly, important digital information is being moved between companies and across continents and is being lost.…
By Stacy Anderson and Gabriel M. Helmer.
Anyone required to comply with the FTC’s Disposal Rule [the text of the rule can be found here], which requires companies to take reasonable steps to dispose of information contained in consumer credit reports, should take note of a recent FTC enforcement action in federal court from the District of Nevada. On December 30, 2008, the FTC filed a complaint against Las Vegas businessman Gregory Navone alleging that he violated the Disposal Rule and the Fair Credit Reporting Act (FCRA) when he discarded forty boxes of documents into a public dumpster behind an office building in Las Vegas. … More
Do The Red Flags Regulations Apply to Me? — Understanding Whether You Are A “Creditor” Under Federal Law
If you are confused about whether you, your company or your clients are subject to federal identity theft regulations, you are not alone. When the Federal Trade Commission (FTC) announced on October 22, 2008 that they were delaying enforcement of the new Red Flags regulations by six months, until May 1, 2009 (which we reported here and here), the FTC admitted that the primary reason for the delay was that many businesses,… More
Isn’t There Already A Federal Standard Governing Information Security? — Re-Examining the Gramm-Leach Bliley Act
By Stacy Anderson and Gabriel M. Helmer.
As an ever-increasing number of states enact legislation governing identity theft, customer data and personal information, pressure for clear federal legislation governing information security has mounted. For example, in December 2008, the FTC joined the growing number of voices calling on Congress to enact a legislation to create a single federal standard for the handling of personal information. (See our report here.) As we see movement towards a unifying federal standard,… More
Trends in Data Breach Incidents, Part 1: Identity Theft Resource Center (ITRC) Reports Breaches Up 47% in 2008, Hackers Only Responsible for 13.9% of All Incidents
On January 2, 2009, the Identity Theft Resource Center (ITRC) released its report(.pdf) on data breaches in the United States in 2008 (you can read the Washington Post’s primer on the ITRC’s findings here). The raw numbers are headline grabbing — 656 data breaches in 2008, a 47% increase from 2007. The sharp increase in numbers from 2007 to 2008 could be a result of an increase in data breach incidents,… More
On January 6, 2009, Senator Dianne Feinstein (D-Cal.) introduced two bills related to data breaches and protection of social security numbers. Bill S. 139, entitled the "Data Breach Notification Act," would require any federal agency or business entity to notify an individual of a security breach involving personal information “without unreasonable delay.” The proposed bill defines “reasonable delay” as including “any time necessary to determine the scope of the security breach,… More
High-profile Massachusetts businesses and industry groups have sent Massachusetts governor Deval Patrick a letter requesting that the governor reissue existing identity theft regulations and give battered businesses two additional years to develop information security programs.
On Wednesday, January 14, 2009, the Boston Bar Association’s Privacy Law Committee hosted FTC Chief Privacy Officer Mark Groman for a brown bag lunch presentation entitled “The View from the Federal Trade Commission’s Chief Privacy Officer.” Here are a couple of highlights from the presentation:
- Mr. Groman views law firms as businesses subject to FTC Red Flags regulations (“we regulate you, too”), so law firms should be developing identity theft prevention programs to comply with the regulations by the May 1,…
Anyone mystified by what practices the FTC wants businesses to improve on or abandon in response to federal “Red Flags” regulations received some specific guidance in December, when the FTC released the report Security in Numbers – SSNs and ID Theft. For anyone subject to new federal and state identity theft regulations, the Report helps identify some specific steps they should consider implementing by May 1, 2009, the deadline for businesses to adopt compliant identity theft prevention programs.
ALERT: Massachusetts Gives Businesses Until May 1, 2009 to Adopt Comprehensive Information Security Programs To Comply With Recent State Identity Theft Regulations
On Friday, November 14, 2008, Massachusetts regulators announced that they will give affected businesses until May 1, 2009 to comply with new identity theft regulations. This move parallels the October announcement by the Federal Trade Commission that it is delaying enforcement of federal identity theft regulations until the same day.
ALERT: FTC Gives Businesses Until May 1, 2009 to Adopt Identity Theft Prevention Plans that Comply With Recent FTC “Red Flags” Regulations
On Wednesday, October 22, 2008, the Federal Trade Commission issued an Enforcement Policy Statement that it will delay some elements of enforcement of recent “Red Flags” regulations until May 1, 2009, instead of the original November 1, 2008 date. Citing uncertainty and confusion within many industries over whether they are covered by the new regulations, the FTC indicated that it will not seek to enforce the regulations on November 1, 2008, when all affected businesses were originally required to come into compliance.