Identity Theft News

Extent of identity theft and data breaches largely hidden

Tuesday, July 21, 2009

Despite stricter laws on disclosure of data breaches in places like California, a lack of proper incentives in reporting incidents may keep private companies from accurately reporting the extent of data theft, according to a web security expert at Hewlett-Packard.

Because compliance laws vary from state to state and are vaguely worded, many companies do not report data breaches in a timely manner, if at all, writes Todd Densmore at HP's security lab blog.

Densmore points out that disclosure policies only serve to highlight the number of incidents, while not necessarily encouraging a more proactive approach to data security.

That could be changing. Beginning August 1, the Federal Trade Commission will begin enforcing a Red Flags Rule that requires creditors and financial institutions to implement a written Identity Theft Prevention Program designed to detect the warning signs of identity theft in their day-to-day operations.

Beginning in 2010, Massachusetts will require all Social Security numbers, bank account numbers and credit card numbers to be encrypted when transmitted wirelessly or on public networks and when carried on portable devices like laptops, PDAs and flash drives.

"Preventative security medicine is the best and most cost effective policy," Densmore said in his post. "The cost of preventative security pales in comparison to the cost of cleaning of the mess after getting breached."