NewsDecember 4, 2017 @ 3:36 PM

US Bill Threatens Jail Time for Failing to Disclose a Data Breach Within 30 Days

A group of U.S. senators recently introduced a bill that proposes up to five years in prison for executives who fail to report a data breach within 30 days.

The Data Security and Breach Notification Act outlined measures organizations would have to take to safeguard Social Security numbers, credit card data and other personally identifiable information (PII). Though the penalties around data breaches are severe, organizations can be exempt if they demonstrate efforts to protect data with encryption.

New Law to Broaden Data Breach Requirements

Given some of the most recent high-profile cybersecurity incidents, the government’s effort to look for a legislative solution comes as no surprise. In fact, as Bleeping Computer noted, a similar bill was introduced during the Obama administration in 2014 following data breaches at major retailers. That bill was never passed into law.

According to Wired, existing laws already penalize actions that could lead to a data breach, but these regulations vary by state. The national scope of the current bill, along with the potentially huge impacts from recent security incidents, might motivate Congress to act this time around.

Playing the Get Out of Jail Free Card

In addition to mandating timely disclosure, the bill also outlined specific forms the disclosure should take. This includes an alert to the Federal Trade Commission (FTC) and a notification to customers via email, letter and a posting on the organization’s website, eWeek reported. Organizations must also provide advice to help those affected by a breach remediate the threat.

While the prospect of jail time may sound onerous to senior business leaders, a close reading of the bill by TechTarget revealed some circumstances in which organizations could have more than a month to disclose a data breach. If business leaders can prove that the organization needed to pinpoint exactly which of its customers’ data might have been lost or stolen, for instance, or that it had made efforts to ward off further attacks, the penalties might not be as severe.

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Shane Schick

Writer & Editor

Shane Schick is a writer, editor and speaker who focuses on how information technology creates business value. He lives in Toronto.