Will My Company Be Held Accountable for a Data Breach?

Data breaches are one of the largest threats facing businesses today. Every year, millions of users of various services lose the personal information that they entrusted to businesses.

These breaches can have serious consequences, especially when they concern financial information. If your business loses customer information that could be used for identity theft, you could find yourself liable. There are numerous examples of major businesses facing class-action lawsuits for data breaches, and settlements regularly reach into the millions.

How Data Breaches Happen

After any data breach, there is a significant investigation into determining the cause of the breach. Today, many breaches are due to network security issues. Third parties are able to gain access to confidential information by spoofing credentials or using phishing attacks.

While these network attacks are a major source of data breaches, there are more tangible security concerns that can contribute to the problem, too. When a business is getting rid of its old IT equipment, there is always a security risk if the data within is not carefully handled.

Even after wiping, the hard drives within discarded IT assets can still contain information. This information can include sensitive customer data that your business is responsible for safeguarding.

When your IT assets reach the end of their useful lives, you need professional IT asset management to dispose of them properly. NIST standards dictate the ways that hard drives are to be wiped and destroyed for the highest level of security, so make sure that the company you choose meets those standards.

Who Can Be Held Responsible for Data Breaches?

It isn’t always clear who is to blame for a data breach within an organization. In many cases, business managers and CEOs themselves will shoulder most of the blame. It could be argued that they didn’t take precautions to prevent the data breaches — and their clients will likely see it that way.

Larger organizations often have a Chief Information Security Officer (CISO) in charge of their organization’s data security. These roles are directly responsible for the decisions that can ensure or compromise data security. In the event of a breach, they would be the ones to likely face repercussions.

While the company itself will shoulder lawsuit burdens, individual employees could be to blame for the data breach. Phishing attacks can make use of information from discarded drives to trick employees into divulging confidential details, worsening the data breach considerably.

Specific Legal Considerations

While any data breach is unacceptable, some cases have more severe consequences. HIPAA covers medical confidentiality, and as such, any business with data of a medical nature can face major HIPAA fines for any breach.

There is also the Fair and Accurate Credit Transactions Act of 2003, which is designed to protect consumers against identity theft. The act covers information about credit reports, employment background checks, and more, issuing fines for each violation.

Many other industries must adhere to specific regulations and requirements for data privacy as well, from schools, to government entities, and financial service providers.

Protect Your Business from Data Breaches

Disposing of your IT assets can leave you vulnerable to data breaches if not done properly.  Certifications like R2, e-Stewards, and NAID are the only way to verify a company is truly doing what they say they do with your used electronic and IT equipment. As the sole certified provider in the Dakotas, SEAM provides trusted IT asset disposition, electronics recycling, and hard drive shredding for South Dakota and North Dakota companies, ensuring privacy and security. Contact us today to see what we can do for you.