NCX Security Update 1-07

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DATA BREACHES EXPECTED TO RISE IN 2007
2006 earmarked a trend of what is likely to continue through 2007. Hackers will be smarter and the lack of inadequate or enforceable policies and procedures will result in more databases being exposed on stolen laptops. So in the immortal words of Clint Eastwood, the question upper management, CIOs and IT directors need to answer is, "Do you feel lucky?" This is the question Mike Fitzpatrick, CEO of NCX Group and host of The Watchdog Report asked in a recent broadcast. There may have been a time when company budgets could gamble with not
taking precautions to fortify policies and procedures or ensure network assets were secure. But with the cost of a breach now
at $182 per exposed record, according to the Ponemon Institute security research firm, that time has passed. Not only could a breach severely damage your company, those responsible for IT security just might find themselves out of a job as well. Read More

ISSUE: January 2007

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2007 Data Breaches

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DR. LARRY PONEMON, PONEMON INSTITUTE, DISCUSSES COST OF DATA BREACH STUDY ON THE WATCHDOG REPORT
Dr. Larry Ponemon, founder and chairman of the Ponemon Institute, reviews the underlying cost structure of a breach and how the benchmark study arrived at $182 per exposed record. Ponemon Institute is a research organization focused on privacy, data protection and information security policy. He describes how the study looked at activities concerning detection and escalation of a breach, the process of notification, the ex-post response (including free credit monitoring services), and lost business opportunity (the churn of data breach victims that decide to do business with another company).

A key finding of the study establishes a total per incident cost of $182 per record or $4.8 million per incident based on an average of 26,300 records lost. During the Watchdog Report interview, Ponemon provides insight into the components of the study and explains the cost associated with the activities companies perform when responding to a data breach incident. Read More

DATA BREACH NOTIFICATION LEGISLATION BACK IN CONGRESS
A slew of data security bills were introduced into Congress last year, but despite the pressures from Americans to do more to secure their personal information, not one was passed.

When Congress reconvened this year, a new push for one federal, national notification standard began with Senator Dianne Feinstein (D-Calif.) reintroducing her Notification of Risk to Personal Data Act (NORPDA). Although Feinstein's S239 appears to have the same strict disclosure requirement as California's disclosure law, it has been pointed out that in fact, it takes a step backward to stronger existing state laws. Critics are fervently expressing how flawed this piece of legislation is by pointing out a significant loophole that would allow businesses to escape notification requirements. Read More

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