The Security Catalyst

I’ve heard other authors exclaim that at the end of the writing process, it felt as if they were ready to give birth — and couldn’t wait for this labor of love to be done. Well, I’ve been the husband/father side of pregnancy, and it was smooth sailing for me. Now that I’m nearing the home stretch of this book, I’m starting to understand…

Into the Breach: Why Companies Fail to Protect Data and What We Need to Do About It has been under development long enough! I have distilled the problem and presented a careful and easy-to-follow solution that will help companies improve their top line, protect their bottom lines and manage people, risk and information more efficiently. I am writing a book for business leaders to understand the fundamentals of how to unmask our human problem and take simple steps to reduce the chaos.

I’m ready to get this out there - and to share what I have learned and help more companies. So… I have decided to pack up the RV (it’s cold here in NY) and head down to Charlotte, NC. Why Charlotte? Why not. Seriously, though, my best friend lives in Charlotte - and he and some other good friends have suggested that we consider moving our base of operations to the Carolinas. The more the tell me about the region, the more I’m inclined to agree, so I decided it would be a good time to take 10-12 days to head down and check it out, while wrapping up the book.

I could use your help
If you live or do business in Charlotte - I would love to speak with you, or even meet with you in the next two weeks. I’m seriously considering moving our business there — and I’d like to learn about the business climate, partnership opportunities (or companies looking for a partner), family environment and the like. If you have a friend in Charlotte, perhaps an introduction would be possible?

Do you want a preview of the book?
I’m going to be hip-deep in finishing up the book. If you live in Charlotte and want to get a free preview - let me know and we can catch up. I’ll bring what I’m up to, and you can help me work through any rough spots while I get the manuscript finished off. I look forward to meeting you and working through the elements. This goes for business, personal… whatever. In fact… if you want to schedule some time with me and your team, I can share some of the keynote and strategies for success with you. I’ve been testing the book for the last year, and I know this works. I’m happy to share.

When you will get the book
I plan to have the galley copies out by the end of the month to my review team. I plan to have the entire project finished by the end of January and then it’s off to the printer!

If you can’t wait (for business or personal reasons)
I will be making a sample chapter available in the next few weeks. It’s seriously top priority for me. At that time, I’ll be able to accept pre-orders and take requests for autographed copies, too.

At the same time — you can book me right now for a dynamic keynote to prepare your organization now. In fact, we’re lining some up for December so that people can get this information before the new year! I promise I’ll do what I can to get this information to you and into the hands of decision makers as soon as I can.

I also am offering a limited number of my Information Protection Program to companies that want to implement the suggestions in the book to reduce the risk of breach, while reducing the cost of compliance. If you’re serious about changing the way people protect information, I’d like to have a conversation with you about how my program can help.

On this program, we share a conversation with Brian Chess, the author of Secure Programming with Static Analysis - a conversation that is a must listen for business leaders, security professionals and developers if you want to learn how to engage your teams to better protect information.

Brian takes an approach with secure programming that is similar to the approach I follow when assessing and implementing awareness and training programs. So whether you are a developer or not, you will change the way you protect information by listening to Brian!

What I took away from my conversation with Brian
After reflecting on our conversation (I explain more during the podcast), here are the top five points I took away:

1. Introspection is important when looking to protect information. To me, this also means we have to stop blaming and looking to assign blame. We can look within, take (and encourage) responsibility and find solutions.

2. Trust is paramount. We have to find ways to establish and maintain trust, offline and online.

3. We need to develop processes and tools to support our experts in a way that naturally engages them and encourages their participation in information protection.

4. New processes, new learning and new tools require an initial investment (time, money and resources) that may sometimes seem sizeable – but the savings are realized rapidly and bring long-term positive benefits.

5. In security, we need to stop griping and learn to be good coming from behind. It’s okay, and we can do it.

What did you take away from this conversation? Send me an email: securitycatalyst@gmail.com, or better yet - join us in the security catalyst community – www.securitycatalyst.org and share your insights with others.

Information and Links

Brian Chess, Ph.D., Founder & Chief Scientist
http://extra.fortifysoftware.com/blog/bloggers.html

Dr. Chess’s research focuses on methods for creating secure systems. He received his Ph.D. from the University of California at Santa Cruz, where he applied his background in integrated circuit test and verification to the problem of identifying security errors in software. In addition to authoring numerous patents and technical papers, Dr. Chess has more than ten years of experience in the commercial software arena, having led development efforts at Hewlett Packard and NetLedger.

Secure Programming with Static Analysis
http://www.amazon.com/Programming-Analysis-Addison-Wesley-Software-Security/dp/0321424778/ref=sr_1_1?ie=UTF8&s=books&qid=1196292147&sr=8-1

Blogging with Brian Chess
http://extra.fortifysoftware.com/blog/

Serving Your Needs
I thoroughly enjoy researching and producing these podcasts – and looking forward to getting back into a programming schedule with a bit more regularity. I’ve also been impressed with the Talk Shoe service, and considering hosting more podcasts through Talk Shoe so you can listen in live.

Let me know if you would listen live and participate if we made that an option, and who you would like to share a conversation with by sending me a note: securitycatalyst@gmail.comAs always, thanks for the gift you give me by listening. If you liked the program, tell a friend. If not, tell me!

 

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By Patrick Romero

One of the principle missions of the Federal Trade Commission is to protect American consumers against activities such as false advertising and unfair business practices. Yet today, instead of confronting meat-packing and railroad industries, the FTC is going to have to monitor technology giants in order to protect American’s online experience and not stifle internet growth.

The FTC held a two-day forum earlier this month regarding online advertising and privacy. The meeting concerned the tactics of behavioral targeting, which is used by online publishers and advertisers to deliver ads based on user’s web-browsing behavior. Advertisers believe that this information helps them deliver better information to consumers and increases the effectiveness of their campaigns. Opponents and civil liberty advocates warn against the erosion of privacy and lack of consent by consumers. They argue that data collected through behavioral targeting could be used by government to monitor users without their consent and could potentially lead to racial profiling and discrimination.

Online privacy has become a major concern, especially in light of the news earlier this year that Google was purchasing internet advertising giant DoubleClick. While Google collects the history of its users through its search engine, DoubleClick tracks what websites people visit. In order to do this, DoubleClick creates profiles for users based on their IP address, domain, browser, local time and date, operating system, and page viewed. The ability for one company with the power to collect data on millions of individuals without any government oversight is disconcerting, to say the least.

The potential harm to consumer privacy that might occur out of the DoubleClick-Google purchase appears not to have stopped others from continuing down the path of online advertising. Social-networking sites are also trying to earn profits by allowing large advertising firms mine to mine for information on their subscriber pages to determine members’ interests and what specialized advertisements would be delivered to them. There has even been recent controversy as to whether this type of targeted advertising is even legal or not.

Past attempts to stop behavioral targeting have been unsuccessful. In 2001, a class action lawsuit was brought against DoubleClick for keeping cookies stored on internet user’s computers without their consent. The court ruled against the plaintiffs citing that there was no violation of the Electronic Communications Privacy Act or the Computer Fraud and Abuse Act because DoubleClick only gathers information concerning a user’s activities on a DoubleClick affiliated web site. The court held that since the user consents to Double Click’s access by visiting the website affiliated with the advertisement, there was no law being violated.

As a result of these legal and business developments, the FTC has to take a more active involvement in slowing down the pace of behavioral targeting. Privacy organizations are calling on the FTC to establish, among other things, an opt-out policy similar to the one applied to telemarketers. They would like to see fines for non-compliance and disclosure of all data-collection practices clearly visible on websites that engage in behavioral targeting.

Yet while these recommendations are a step in the right direction, the government should not try to develop a one-size-fits all model that would stifle the economics on which internet innovation relies upon. The most successful internet companies rely heavily on advertising dollars to sustain their growth and need this capital to generate new technologies. The concerns for consumer privacy should also be taken in tandem with the economic model that continues to fuel new technological advancements.

The Google-DoubleClick acquisition has put online privacy at the forefront of government concern. Congress and the EU have scheduled hearings on the impact that these two companies will have on consumer’s online experience. Proposals for government intervention will surely be considered in order to control how information is used and stored. The debate as to whether there should even be state intervention in this country appears to have begun.

As we near the end of the year, I’m advising friends and clients on successful strategies to address their current challenges around improving their security programs, how to reduce the cost of compliance, and engage their people in security awareness programs that get results!

Several of my clients have started to book my keynotes and training programs using end of year budget; they view this as the perfect way to kick-start their programs next year. Obviously, I’m biased - but I happen to think this is a good idea.

Engaging me now for a keynote or day-long program brings you my experience, passion, energy and allows you to benefit from the research and effort that has gone into writing the book (http://www.intothebreach.com/into_the_breach.htm).

If you’re ready to engage your people, I’m ready to help you. You can call me at 800.996.8351 and ask for Ffion (FEE-ON). She’ll be more than happy to help you and arrange a time when we can speak.

What do people have to say about my programs?
I take great pride in being able to bring everything I have to each and every engagement. If you’ve worked with me in the past, you’ve experienced my passion and contagious energy. You can read some really appreciated endorsements of my efforts on my profile at http://www.linkedin.com/in/securitycatalyst

“Michael is a rarity in today’s world. He is a fountain of personal energy and knowledge that shows no sign of drying out. Even better than that, his sincere desire is to help others understand information protection concepts for their own personal betterment and for the betterment of the security community as a whole. Michael’s communication style is unabashedly straight-forward – cutting through the mess, and getting right to the point. This makes him a great presenter, coach, or sounding board. I truly appreciate Michael’s contribution to the security community and am grateful he is out there actually *doing* what so many of us talk about, but never seem to actually attempt.”
Mr. Carpenter
Information Security Manager

What are the most requested topics I speak on?
As a professional speaker and member of the National Speaker’s Association, I work with you to customize a program that meets the precise needs of your audience and delivers the results you need. I bring over a decade of in-the-trenches experience, combined with the breadth and depth I demonstrated as a top CISSP instructor and deliver it in an engaging, entertaining and simple to understand way.

Each of these programs can be tailored for your audience. Call me to explore how I can help you solve your information protection challenges or for program summaries.

Mind the Gap
Journey Into the breach, protect Information and reduce the cost of compliance

Speak with impact!
Communicate security so they really get it

Awareness with Attitude
Developing the mindset for protecting information

Punching Above Your Weight
Get executives to care without peddling fear

Staying Safe (Without Wires)
Protect your information, your identity and your children

Training workshops
I have developed these training programs based on my experience in providing opportunities to engage, understand and practice. If you are looking for clear results from a training session, I invite you to consider:

Results-driven Information Protection Through Leadership(one-day program)
Learn the process-driven approach to improved security, lower costs and higher value

Speaking About Security (two-day program)
Communicate effectively and engage your audience in information protection

Engage. Empower. Enable. (one-day program)
Develop effective awareness programs that connect with your colleagues

See me in action (Video Demonstration)
Actually, the video I currently have is pre-triathlon training; while it shows my passion and energy, it’s time for an update. This means an opportunity for you. I’ve already reached out to some clients about a barter deal in return for high-quality video capture.

If you have the ability to record my keynote or training session this year, then we can make a deal!

What does it mean to be a professional speaker?
First and foremost, it means that I have met the requirements to join the National Speaker’s Association as a professional member, and I abide by their code of conduct and ethics. Being a member of NSA is not required to be a professional speaker, of course, but it does demonstrate I have achieved a level of success in this pursuit.

As a member of the National Speakers Association, I have the privilege to work with and learn from some of the best and most gifted communicators in the world. All of that learning, practice, feedback and insight goes back into the efforts I bring to you.

As a professional speaker, I actively study the elements of successful communication. I focus on how information becomes understanding - and specifically on how to guide understanding into action. This is a true passion of mine, and I have developed the Security Salon as a direct result. I’ll share more about the salon with you in the coming months.

When you engage me to work with your team or audience, I leverage my skills and experiences in a way that delivers you a program focused on your success.

Each and every engagement - speaking or training - receives extensive preparation and planning. Each message is tailored to your group and crafted to connect with the audience. Depending on the audience, I prepare customized materials and handouts or structure hands-on opportunities to work with the information and experience I am sharing.

When you hire me as a speaker - you get my insights, my passion, my experience and I always bring my contagious energy and can-do spirit.

I receive all kinds of exciting spam, as do most people. The phishing emails are a dime a dozen… but today was interesting. I received my first Vishing attempt. Even more interesting, it was a Vishing/Phishing hybrid.

What’s Vishing? Wikipedia has a decent definition page - http://en.wikipedia.org/wiki/Vishing

In summary - “Vishing is the criminal practice of using social engineering and Voice over IP (VoIP) to gain access to private personal and financial information from the public for the purpose of financial reward. The term is a combination of “voice” and phishing. Vishing exploits the public’s trust in landline telephone services, which have traditionally terminated in physical locations which are known to the telephone company, and associated with a bill-payer. The victim is often unaware that VoIP allows for caller ID spoofing, inexpensive, complex automated systems and anonymity for the bill-payer. Vishing is typically used to steal credit card numbers or other information used in identity theft schemes from individuals.”

The phone number in the email below is most likely an Asterisk (http://www.asterisk.org/) system designed to receive phone calls via VOIP. When you call it, a synthesized voice asks for your card number, 4 digit PIN, and expiration date. This is a slick scam, but not that slick - if it was, they would have also asked for the CVV2 code and asked the owner to record their name and address. They also have something to learn about forging email headers. “decuritydepartment.com” isn’t very believable, but I’m sure some poor soul will fall for this scam. They also didn’t do any kind of validation checking on the card. I called the system, and 1111111111111111 worked just fine, though all Bank ID Numbers for issuers of MasterCard all start with numbers in the range of 51-55.

Still - the bad guys are getting better at their craft, and as I mentioned, some poor souls are bound to fall for it.

The scam email follows:

Dear MasterCard customer,

We regret to inform you that we have received numerous fraudulent emails which ask for personal
account information. The emails contained links to fraudulent pages that looked legit.

Please remember that we will never ask for personal account information via email or web pages.

Because of this we are launching a new security system to make MasterCard accounts more secure
and safe. To take advatage of our new consumer Identity Theft Protection Program we had to
deactivate access to your card account.

To activate it please call us immediately at (641) 665-6048

Activation is free of charge and will take place as soon as you finish the activation process.

By Patrick Romero and Michael Santarcangelo

Previously, we explored whether you should be issuing and relying on email disclaimers. This week, we look deeper into email communication to find out if your emails are considered private communications or not.

When speaking with audiences, this is a topic that generates a lot of questions, opinions and sometimes controversy. While everyone is entitled to his or her opinion on the topic, we wanted to take a look at any legal grounding to form a more complete answer.

In the business world, the answer is pretty clear: if you are using the resources of your company, then you have no expectation of privacy. However, what about when you’re using your personal email account, on non-company resources? Do you have a reasonable expectation of privacy for those messages?

The crux of the argument here is one of the fourth amendment. Basically, does the government need to rise to the level of requiring a subpoena in order to require your ISP to provide them a copy of your email records, and in the process, notify you that they have done so.

Think about that for a second.

This has implications for both you personally, and for your organization. What standard is the government required to produce in order to obtain your email records? As a company, what standard is the government required to produce in order to compel you to provide email records – especially if you are an ISP or other email provider.

Based on a landmark ruling this past summer, it appeared the easy answer was “yes.” In the ruling, the United States Court of Appeals for the 6th Circuit held that computer users had a “reasonable expectation of privacy” in their e-mail communications.

No so fast
Yet what was hailed as a victory for privacy advocates was short-lived. Just days ago, on October 9th, 2007, the 6th Circuit granted a rehearing en banc, thereby vacating their earlier decision. This is significant, as an en banc hearing means that instead of the usual three-judge panel decision, all sixteen active judges of the Court will hear this case.

The humble beginning
The decision of the 6th Circuit arose out the government’s investigation into Steven Warshak and his company, Berkeley Premium Nutraceuticals, Inc. Warshak was being investigated due to allegation of mail and wire fraud, money laundering, and related federal offenses. The government obtained a court order directing ISP Yahoo! and NuVox Communications to turn over information pertaining to Warshak’s e-mail account. The order was issued under the Stored Communications Act (SCA) of the Electronic Communications Privacy Act. The SCA requires the government to show that there be “reasonable grounds to believe that the contents of a wire or electronic communication…are relevant and material to an ongoing criminal investigation.”

The government argued that the court order issued under the SCA to the ISPs were not searches but rather compelled disclosures, akin to subpoenas. As a result, the higher burden of probable cause required under the 4th Amendment for a search and seizure was inapplicable. The 6th Circuit disagreed, ruling that “a seizure of e-mails from an ISP, without either a warrant supported by probable cause, notice to the account holder to render the intrusion the functional equivalent of a subpoena, or a showing that the user maintained no expectation of privacy in the e-mail, amounts to a” a 4th Amendment violation.

Why is email different?
Most Internet users believe that they have a reasonable expectation of privacy in their electronic communications and would be shocked if government agents could snoop around their e-mail box. Americans naively assume that e-mails a private and require that the government seek a warrant supported by probable cause to access. Whereas telephone calls due have this judicial standard, e-mails today are not afforded the same level of protection due their technological differences.

The seminal case that enshrined our privacy laws was Katz v. United States
. The Supreme Court held that that the 4th Amendment protects individuals against unreasonable searches and seizes if an individual can justifiable expect that is communications would remain private. Justice Steward wrote that “no less than an individual in a business office, in a friend’s apartment, or in a taxicab, a person in a telephone booth may rely upon the protection of the 4th Amendment.”

The government argued that e-mails are not analogous to telephone communications because they require an intermediary. E-mail works by breaking the contents into individual packets that are routed to the senders ISP. The ISP then stores and copies the e-mail on their server before transmitting it to the recipient. The government’s theory runs along the lines that since the ISP stores and copies the e-mail, the information was voluntarily turned over. As a result, the sender has forfeited any expectation that the ISP would keep the information private and the government should be able to access the content stored by the ISP without a showing of probable cause.

Yet while the government is correct in arguing that e-mail is not akin to the telephone, their argument would eradicate any expectation of privacy for any type of communication which requires an intermediary. The fact that an ISP must store and copy the message does not mean that people expect their messages to be turned over to the government by their ISP.

Fallout of the Decision
So what does this mean for you and me? The Court will hear the case again and determine whether the government’s action were in violation of federal law. While it is always difficult to predict the outcomes of such a case, the issues raised by Warshak should be of concern to all Americans. The decision of the court will be one of the most important decisions involving fundamental Constitutional protections. Due to the prevalent use of new technologies, Americans are not being adequately protected by federal statutes. The need for the courts like the 6th Circuit to establish clearer guidelines to the government and Americans is critically needed to prevent confusion and abuse in the digital age.

In the meantime – remember that email works on a store-and-forward system, and if you are not willing to read what you wrote in the newspaper, you may not want to send it.

For a while, I’ve wondered how to add the CISSP logo to my Linked In profile - or that of any other group I participate in.

Click Here to add the CISSP logo to your Linked In page

There is also a list of other professional associations located at http://www.linkedin.com/static?key=groups_directory_professional

I’ve gotten a lot of value from Linked In, such as finding out that one person I just added is already connected to 3 other people I already know, but couldn’t figure out how to join groups for quite a while, so I suspected that I wasn’t the only one who couldn’t figure out how to do this.

PS - My page is http://www.linkedin.com/in/adammuntner - add me to your network.

This podcast explores how and why virtual teams fail, based on new research from a group of graduate students at Johns Hopkins Carey School of Business.

My belief is that in order to protect information, we have to support the individual – and make it easier for them to do their job. By learning more about how virtual teams fail, we can learn how to avoid mistakes and build stronger and more effective collaboration opportunities – where people can do their jobs while taking responsibility for protecting information. By absorbing this research, you may also learn how to work more effectively on your own virtual teams.

After our interview, I share the top five things that I learned about nurturing and protecting virtual teams. I invite you to sit back, listen, learn and contribute. I’m happy to keep the conversation going in the security catalyst community.

Background: Bring new knowledge to the field of work team behavior
A group of five graduate students (Robert Darling, Cari Endicott, Lisa Fratino, Matsuno Inoue, and Ellen Snydman) from the Carey Business School of Johns Hopkins University participating in a team building course under the leadership of Dr. Robert Pernick were charged with bringing new knowledge to the field of teaming.

This group elected to research the world of virtual teaming, and in doing so, found that here is a great body of literature on what makes virtual teams successful, but little written about what causes them to fail or become sub-optimized.  The team’s first research effort was to conduct structured interviews with a group of virtual teaming experts.

The experts interviews generally agreed that the success of virtual teams were threatened by:
•    Concerns regarding the ability to protect sensitive information
•    Lack of a single platform that provides all the tools necessary to optimize
•    The struggles of virtual communication
•    Poorly or under-trained users
•    The challenge of building trust  without the use of face-to-face communication

Overall, the experts agreed that all of these obstacles can be overcome and unless combined into the “perfect storm” are not likely to cause catastrophic failure. The experts felt very good about the work that is be done virtually and believe that the use of virtual teams will become even more prevalent into today’s global society.

The second phase of research involved the distribution of a short, online survey about virtual work.  The results of the survey are still be collected, but at this point there seems to be a great deal of overlap with the findings from the subject matter experts.  The podcast you are listening to will explore both elements of the research and will introduce yet another subject matter expert, Stu Snydman, the Manager of Digital Production at the Stanford University Libraries.

This podcast was created and hosted by Michael Santarcangelo and expertly engineered by Steve Witt. Thank, Steve!

 

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By Michael Santarcangelo and Patrick Romero

There are roughly 40 states that have some sort of “data-breach” law or bill being considered that force notification of a company’s security breach (or suspected breach) to their consumers. These laws were enacted as a way to force companies to disclose the possibility that individuals personal information was compromised and that they could potentially become victims of identity theft.

Over the coming months, we’ll spend some time exploring how the different states are handling these statutes. When you peel the layers back a bit, and consider them from different angles, we can learn some interesting elements – useful to us from individual and organizational perspectives.

Even with these new laws in effect, it seems that there is little a person can due to hold a company liable for a data-breach based on their weak security standards. Recently, state governments have begun to change this by imposing liability on the retail business and others, thereby opening the door for consumers to sue companies that do not adequately protect the personal information that they collect.

This is a serious issue that has implications for everyone involved – and ultimately requires clear definitions, mutual understanding and will take years to sort through. In the meantime, we’re going to ignite our series of articles exploring these laws and developments by analyzing some recent events.

Minnesota PCI Legislation
Effective August 1st 2007, Minnesota became the first state to require that all companies handling credit and debit card data comply with the Payment Card Industry (PCI) data security standard (in a future article or podcast, we’ll explore and debate the value of tying the PCI standard to the legislation - Michael).

The state’s new Plastic Card Security Act would prohibit a company from retaining a credit card’s security code data, the PIN verification code number, or the full contents of any track of magnetic strip data. The new legislation is intended to target retailers who continue to store data in violation of PCI standards. The bill also makes it a violation for retailers to a credit card holder’s PIN number longer than 48 hours after authorization of their transaction. Similar bills are pending in Texas, Illinois, Connecticut, and Massachusetts.

The significant of this legislation is important in light of recent ruling by courts that have dismissed class action suits against companies following data-breaches. On August 23, 2007, the US Court of Appeals for the 7th Circuit held that identity-theft monitoring costs paid for by the plaintiffs were not compensable damages under Indian’s security breach notification statute. In Pisciotta v. Old Nat’l Bancorp, the court held that there was no state statute supporting the compensation of incurred costs because “had the Indiana legislature intended that a cause of action should be available against a database owners for failing to protect adequately personal information, we believe it would have made some more definite statement of that intent.” So for the time being, unless you have an actual showing of harm as a victim of identity theft, potential harm will not suffice.

Consequences for the Courts
As more states begin to enact legislation that requires companies to comply with PCI, courts may begin to allow litigants to be compensated as a result of a security break. The argument that courts have made in cases like Pisciotta will clearly be much weaker as states legislatures conspicuously demonstrate their intent to punish companies by enacting specific statutes targeting the security of personal information.

Federal and state courts will feel much more comfortable in their decision to expand their legal theories of liability when supported by statutes that explicitly creates private actions for security breaches. In this context, it is much more likely that Courts will not follow the ruling in Pisciotta until after states pass legislation similar to Minnesota. In other addition, plaintiffs might also receive some relief if a recent bipartisan bill in the U.S. Senate gets passed. The bill, known as the Identity Theft Enforcement and Restitution Act of 2007, was introduced on October 16, 2007 and would give victims the ability to seek restitution for the loss of time and money as a result of identity theft. Such federal legislation could prove to be effective in jurisdictions with no state identity-theft laws.

Consequences for Businesses
Meanwhile, the retail lobby continues to argue against laws that would hold them liable by arguing that these laws would be too costly and burdensome, especially for small businesses. This apparently was the argument that convinced Governor Schwarnenegger to veto a California law that would have mandated the retail industry comply with PCI requirements. While this may be true, legislation in Minnesota limits this burden by exempting businesses with few than 20,000 transactions from their statute. Clearly, there is a way for the legislature of any state to write a statute that can pressure companies to improve their data security standards without crippling small business owners.

While the retail industry will continue to resist such legislation, there is strong support from banks and credit unions, since in the eyes of consumers they often blamed for such breaches. TJX is currently being sued by several banks
who seek compensation for having to re-issue credit cards and credit monitoring to thousands of their customers as a result of a massive security breach earlier this year. Depending on how the case turns out, the burdens and cost of breaches will shift away from consumers, banks, and credit unions but will perhaps be shared by the retailers and others (of course, the consumer pays in the end).

Preparing for the change
As a consequence of new state and federal legislation, the landscape of data security will continue to evolve, sometimes in seemingly dramatic fashion. Individuals and businesses will most likely be able to get their day in court for incurred damages a result of security breaches by a third-party. Industries that have for now been able to get away with having minimum security standards will begin to take notice of their potential liability and hopefully, will improve the way they guard information. While the process is slow, it appears to be inevitable.

This isn’t doom and gloom.

Many of us have already begun to prepare for these changes by improving and writing security policies that make sense and can be understood, improving the process of protecting information and working to involve users in solution through training and awareness. Focus on the fundamentals of information protection and you’ll be less likely to be the test case.