Harry A. Valetk, CIPP
More than 150 privacy professionals gathered in New York City June 27-28 for the IAPP's first-ever 2-day Practical Privacy Series. The series covered cutting-edge topics on security breach notice, risk mitigation and crisis management. The conference also included sessions on Financial and Health industry concerns.
Among the speakers were Carol A. DiBattiste, CIPP, ChoicePoint's General Counsel and Chief Privacy Officer, Milo Cividanes, Partner at Venable LLP, and Charlie Miller, CIPP, Director, Merrill Lynch. The series offered well-timed presentations on key topics, invaluable networking and countless practical insights.
The event launched with an impressive panel of speakers discussing the practical challenges all companies face when dealing with security breaches.
A Little Breach Is a Good Thing
Lisa J. Sotto, Partner, Hunton & Williams LLP, an expert on security breach laws, described the benefits of a "little breach." Despite all we know about the business impact of security breaches today, actual breaches continue to serve as the most powerful wake-up call for organizations about the quantifiable implications of losing customer data. One expert pointed out how, so far, TJX's security breach has cost the company $20 million in reportable expenses.
While most companies have some security measures in place, keeping them up-to-date can be a tug-of-war during budget season. For example, in a 2005 Ponemon Institute study, 100 percent of large companies surveyed had a privacy policy for customer data, but only 38 percent believed that existing resources were enough to manage regulatory and corporate privacy requirements.
Even today, several speakers pointed out the challenges privacy officers face when seeking to adequately fund, audit and modernize their privacy programs. Yesterday's program is ill-suited in today's marketplace. And so, in this context, Sotto observed how a little breach at your organization could go a long way in creating adequate business incentives for improvement.
Turning an FTC Consent Order Into an Opportunity
If all else fails, and your company ends up with a long-term relationship with a regulator, DiBattiste urged privacy pros to use it as an opportunity. In her visible leadership role, she actually turned her company's consent order with the Federal Trade Commission (FTC) into a "magic wand." Whenever senior executives forgot why annual policy reviews and updating technologies were so important, the 20-year consent order abruptly ended any resistance. And thanks to its FTC consent order, ChoicePoint currently has one of the most sophisticated data protection programs serving as a model for others.
Even If no Law Is in Place, You May Still Need to Notify
During his presentation, Cividanes also pointed out a number of legislative nuances that can otherwise be easy to overlook. For example, he noted that although 38 states currently have security breach notice laws, your duty to notify may not end there. As security breach lawsuits continue to gain momentum around the country, and depending on the size of the breach, class action litigation may follow. In this context, he pointed out that you may have a duty to mitigate damages to the affected class by disclosing the data loss, and giving victims an opportunity to guard against identity fraud.
He also noted how draft regulations on implementing New Jersey's security breach notice law may go far beyond any existing standards. From start to finish, the proposed regulations may require companies to notify customers within 30 hours of discovering a breach.
Other valuable insights included:
1. Have a plan, find the plan, follow the plan.
• Do you have a formal breach crisis response plan?
• Do all the right players know your plan?
• Does everyone know where to find it?
• Schedule drill scenarios to make sure everyone follows the plan.
2. Benchmarking. What are your competitors doing? "Reasonableness" is often measured against industry standards and widely available technologies.
3. Be proactive. Reach out to local law enforcement and appropriate regulators. Know who they are, and keep them informed early in the process.
4. Watch out for paper. State attorneys general, especially in Texas, are paying close attention to mishandled paper containing sensitive customer data.
5. Think globally. Build your privacy plans in a way that's easily adaptable to our global marketplace.
More Than Just Compliance
This event, however, was not just about compliance with existing laws. Throughout the conference, speakers reiterated that privacy has a real return on investment. Indeed, effective privacy professionals must master the marketplace's trust analysis. And, as noted throughout the conference, violating that trust can have a permanent impact on an existing market practice (i.e., telemarketing virtually ended with enactment of the Do-Not-Call Registry).
So, in this role, privacy professionals are not mere gatekeepers; they're enablers. They help their organizations understand the business value of being good stewards of data, and using it in sensible and responsible ways.
Harry A. Valetk is a new media and privacy attorney in New York City. He is currently responsible for U.S. Privacy at MetLife. He also is an adjunct assistant professor at the Bernard M. Baruch College, Zicklin School of Business, and a former trial attorney with the U.S. Department of Justice. Any opinions expressed in this article belong to the author, and are not necessarily those of MetLife. He may be reached at
harry@valetk.com
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