Two U.S. senators recently proposed a cybersecurity legislation that will allow the Federal Trade Commission (FTC) to penalize credit rating industry organizations that don’t properly safeguard data.
Cybersecurity Legislation Imposes Penalties for Breaches
In a public statement outlining the proposed Data Breach Prevention and Compensation Act, Sens. Elizabeth Warren (D-Mass.) and Mark Warner (D-Va.) explained that the bill would create a new office at the FTC focused on information protection.
If passed, it would enact strict penalties for breaches in customer data. Specifically, credit rating agencies would receive $100 fines for each piece of personally identifiable information (PII) lost in a data breach, plus $50 for each additional PII file per customer. According to SecurityWeek, the bill also requires agencies that fail to comply to pay a maximum penalty of 50 percent their gross revenue from the year before the incident took place.
In addition to giving the FTC greater oversight and power over data protection practices, this cybersecurity legislation actually hits harder in terms of fines than the EU’s General Data Protection Regulation (GDPR). While many firms are bracing for GDPR to come into effect later this year, it’s clear that recent security headlines are creating just as much concern among lawmakers on this side of the Atlantic.
Protecting Consumer Data
The bill aims to ensure that consumers, whose personal information becomes the ultimate casualty when cybercriminals break into large corporate systems, will be fairly compensated: 50 percent of the fines collected by the FTC would go to the victims. The other half would go toward security research and inspections, SecurityWeek noted, ensuring that the law would also reduce the risk of similar occurrences in the future.
It’s not unusual for modern governments to consider cybersecurity legislation. Just as credit agencies keep a close eye on how consumers spend their money, the government wants to keep an even closer eye on how these firms are keeping data from prying eyes.