The document outlines the landscape of data breach laws in the U.S., focusing on Massachusetts' regulations, their evolution, and compliance obligations surrounding personally identifiable information (PII). It discusses the increasing complexity of state laws, notification requirements, and emerging federal trends regarding data protection. The presentation emphasizes the importance of understanding relevant state and industry laws for businesses handling personal data.

1. Allison Dolan
Program Director, Protecting Personally
Identifiable Information
Massachusetts Institute of Technology
State Data Breach Laws
….A National Patchwork Quilt

2. • Breach law history
• Massachusetts and other states
• What’s on the horizon
Presentation Overview
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3. Key Take-aways
Laws and regulations continue to abound – and
are becoming more proscriptive
Know what state(s) are relevant
Know what industry(s) are relevant
Know what processes you have
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4. Laws & Regulations
• FERPA - Family Educational Rights and Privacy Act
• Gramm-Leach-Bliley Act
• HIPAA - Health Insurance Portability and Accountability
Act
• FACTA/Red Flags Rule
• PCI DSS - Payment Card Industry Data Security
Standards
• HITECH Act - Health Information Technology for
Economic and Clinical Health
• State data breach laws, regulations
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5. State Laws
2002 – California SB-1386 – consumer notification if
unauthorized access to unencrypted electronic records
with personal information
2005 – New York data breach law GBL 899-aa
2007 – Massachusetts MGL 93H/I
39th state with breach law; 5th to include paper
1st to require “written information security program”
2007 – California AB 1298 added medical and health
insurance information to definition of PI
2010 – 47 states, Puerto Rico, Virgin Islands, DC, NYC with
laws
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6. Massachusetts Data Breach Law(M.G.L. c.93H & 93I)
• Personal information (PI) = last name (with first name or
initial), along with one or more of Social Security
Number; Driver’s License # or Mass. ID#; Financial
Account # or Credit/Debit Card #
• Defines obligations re: notification, if paper or electronic
files exposed (irrespective of encryption)
• Includes what must be in notification letter
• When destroyed, must be done such that PI cannot be
practicably read or reconstructed
• Data protection regulations initially issued 9/08;
ultimately effective 3/1/2010
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7. Massachusetts Data Protection
Regulations (201 CMR 17)
http://www.mass.gov/Eoca/docs/idtheft/201CMR1700reg.pdf
If you have Personal Information, then you have a “duty to
protect” and need to follow “standards to protect”, including:
 “Develop, implement, maintain and monitor a …written
information security program” (WISP)
 Limit access and ensure user authentication & authorization
 “Oversee” 3rd parties
 Encrypt transmitted records and personal information stored
on laptops or other portable devices.
 Maintain up-to-date versions of system security including
malware protection, patches and virus definitions
 …plus other requirements
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8. Massachusetts Data Protection
Regulations Evolution
• Office of Consumer Affairs and Business Regulation
promulgated regulations; Attorney General responsible for
enforcement
• Draft regulations 2/08
• Included technical detail for encryption requirements
• A lot of feedback
• Issued 9/08, with 1/1/09 effective date
 No technical requirements for encryption
 “Certification” of 3rd parties
 Implied requirement to inventory PI
 Standards were ‘one size fits all’
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9. Massachusetts Data Protection
Regulations Evolution con’t
 4 postponements with revisions
 Added emphasis on risk based approach – small business
with little PI have different risk than large company
 Made more explicit that ‘written program’ could consist
of compilation of existing written policies/practices
 Need to “oversee” 3rd parties by taking “reasonable
steps” to ensure 3rd party can protect information
 Entire IT section prefaced with “to the extent technically
feasible”
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10. California redux
• 2007 – AB 1298 added medical information and health
insurance information to the definition of PI
 2010 – SB 1166
 Additional information in notification letters, including
 Type of personal information exposed
 Description of incident, including date
 Steps organization is taking to protect individuals
 Steps consumers can take to protect themselves,
including contact information for credit reporting
agencies
 Breach affecting >500 must review notification letter with
AG
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11. State comparisons
 All(?) focus on state residents (not company residence)
 Most focus on electronic records; few include paper/other
media
 Most include SSN, Driver’s License/state issued id, CCN,
financial account numbers; some limit only if PID/PIN
included
 Some include mother’s maiden name, date-of-birth, etc
 Many exempt ‘protected’ or encrypted records
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12. State comparisons
 State agency notification varies – e.g. AG, others, none
 Template for notification letter varies – e.g., some require
details of breach (when, how, #), others preclude details
 Timeframe varies – “without unreasonable delay”, “5 days”;
often exception for police investigation
 Harm threshold varies – no threshold thru “reasonably
believed to have been acquired by an unauthorized person”
 Quantity threshold varies – 1 to 1,000 (also, maximum for
personal notification)
 Penalties vary, some with maximums
 Private right to action varies
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13. Federal Trends
 HITECH (2/2009)
 notification requirements for HIPAA Covered Entities and
Business Associates
 national database
 HHS AND State AG enforcement
 Data Breach Notification Act (introduced 1/2009)
 Authorize AG to bring civil action if notification did not
occur
 Extends notification requirement to government agencies
 Personal Data Privacy and Security Act (introduced 7/2009)
 Set criminal penalties for willful concealment of breach
 Require preventative security standards
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14. Federal Trends
 2010 Data Security Act SB 3579 (2007, reintroduced 7/2010)
 preempt state laws;
 modeled after GLBA;
 establish “appropriate standards” for administrative,
technical and physical data protection
 Data Security and Breach Notification Act of 2010 S.3742
 Require protection of PI (FTC to set national standards)
 Require notification within 60 days
 Require offering 2 years of credit protection
 Up to $5 million in civil penalties
 Exemption for entities covered by FCRA
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15. In Our Future?
 More European-style controls?
 More items to be protected?
 Photographs
 Biometrics
 IP addresses
 More contractual requirements between organizations?
 More definition of how information is to be protected?
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16. Summary
 Know the states(s) represented in your business (employees,
customers, vendors, affiliates)
 Know the industry(s) represented in your business (health,
insurance, finance, retail)
 Know the major business processes (HR, procurement,
finance, business operations)
You are prepared when
- new laws enacted
- business processes change
- company changes (acquisition, divestiture, etc.)
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17. Quiz
Following examples from http://www.idtheftcenter.org/artman2/publish/itrc-
news/Notification_Roulette.shtml
1 Paperwork containing personal and financial information was found littering the streets of Buffalo, New
York. The customer records were from Rent-a-Center. Do they have to notify you?
2 In Arizona, thousands of pages of sensitive information reportedly disposed of by The Vine Tavern and
Eatery contained people’s names, Social Security numbers and dates of birth from restaurant
applications, as well as checks with banking information and also credit card receipts with full card
numbers from Vine customers. The receipts revealed a person’s entire credit card number.
3 Over 40,000 intact patient records containing personal and medical information were found in a pile
described as 20’ long by 20’ wide at Georgetown Transfer Station in Massachusetts. The records, from
four hospitals, had reportedly been dumped there by the medical billing service they had used.
4 An unknown number of canceled checks bearing Social Security and bank account numbers of Rockland,
Massachusetts town employees are missing after wind knocked them from a loaded recycling truck.
5 Approximately 30,000 estimated tax payments with checks wound up in the San Francisco Bay after the
truck transporting them to the Internal Revenue Service was involved in an accident and wind blew the
mail into the bay.
6 Boxes with 1,590 patient records from a Charlotte, North Carolina’s psychologist’s practice were left at a
county recycling facility because the psychologist’s sons mistakenly took the wrong boxes to be recycled.
The records contained patient names, contact information, Social Security numbers, credit card numbers
and medical histories.
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18. Quiz
7 In Illinois, hundreds of sensitive documents that were provided to the law firm of Robert J. Semrad &
Associates, also known as DebtStoppers USA, ended up in a trash bin in an area the firm shares with
other businesses. The “Client Information Sheets” contained Social Security numbers, full names and
addresses, driver’s license numbers and signed debit card authorizations.
8 75 legal files were found in a dumpster off Interstate 10 near Boerne, Texas. The files, which included
peoples’ names, addresses, bank accounts, social security numbers, driver license numbers, and birth
dates, belonged to attorney David Naworski, who readily acknowledged throwing them away
unshredded and said he was unaware of any state law on disposal.
9 Three small file boxes full of decade-old personal records belonging to customers of the First Federal
Savings Bank were found near a residential street in Bryan, Texas. The bank had apparently closed its
doors under that name around 2002 and has been acquired by several banks since then. The current
owner says that they never assumed ownership of those bank records.
10 Credit-card numbers from 17,000 guests at the Emily Morgan Hotel in San Antonio were stolen and used
in a three-state shopping spree. Officials say the suspects used stacks of stolen credit-card receipts from
a storage room at the hotel in 2006.
11 The University of Florida discovered that 2,047 people that their Social Security or Medicaid
identification numbers included on address labels affixed to letters inviting them to participate in a
research study. The letters were sent through the U.S. Postal Service on May 24, and the information
also was shared with a telephone survey company.
12 In Maryland, Montgomery County’s Department of Health and Human Services is looking into how
numerous Wheaton nursing home papers containing sensitive patient information have made their way
into nearby neighbors’ yards over the past few months. The exposed internal documents contained
patient conditions, names and Social Security numbers.
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19. Resources
• Map and other state/Canadian info: http://www.nymity.com/About_Nymity/Nymity_Maps.aspx
• privacylaw.proskauer.com/articles/security-breach-notification-l/
• summary of state data breach requirements:
www.perkinscoie.com/news/pubs_detail.aspx?publication=26596137-b74f-4b68-8063-93f996f233e9
• list of state breach statutes:
www.ncsl.org/IssuesResearch/TelecommunicationsInformationTechnology/OverviewSecurityBreaches/tabid/1
3481/Default.aspx
• www.ncsl.org/Default.aspx?TabId=13489
• "Intersections - Data Breach Consumer Notification Guide” details each state's law, 118 pages, contact info
www.intersections.com 888.283.1725 DataBreachServices@Intersections.com
• www.sb-1386.com/Guide to CA regulations
• Breach notification letters: datalossdb.org/incident_highlights/34-data-breach-notification-letters
• NY Guide to handling PII:
www.nysconsumer.gov/pdf/protecting/information_privacy/the_new_york_business_guide_to_privacy.pdf
• Summary of US privacy laws, (undated) www.bbbonline.org/understandingprivacy/library/fed_statePrivLaws.pdf
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20. Questions/other follow-up?
Feel free to contact:
Allison Dolan adolan@mit.edu 617.252.1461
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21. Places to look for PII/SSN
Employee Processes
• Job Applications
• Background checks
• New hire paperwork - I-9,
Federal/State tax withholding,
benefit enrollment, other new
hire forms
• Payroll, timecards,
paychecks,direct deposit
forms; wage garnishing
requests
• Ongoing benefit and 401(k)
processes
• Status changes (e.g. marriage)
• Worker’s compensation,
medical leave form
• Employee loan programs
• Specialized certifications (e.g.,
nurse, engineer)
• Special requirements (e.g. top
secret clearance,
confidentiality agreement,
employment contracts)
• Employee reporting (e.g.
annual reviews)
• Union reporting
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22. Places to look for PII/SSN
Customer Processes
• Services that require
customer’s PII - e.g., banking
and financial services,
education services, car
rentals, tax preparations,
accounting, etc.
• Products/services with check
and/or credit card payments
• Services that require PII of
others - e.g., 401(k)
administrators, benefit
providers, underwriters,claim
administrators
• Services that may involve
access to PII of others - e.g.,
backup service providers,
shredding services, IT
application developers and
system admins, custodians
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23. Places to look for PII/SSN -
Financial Processes
• Vendor files/vendor payments
e.g., independent contractors
• Employee reimbursements
(look at form used to request
reimbursements, as well as
backup to request)
• Honorarium
• Employee awards
• Customer rewards, awards, or
payments
• Other payments - e.g.,
payments to ‘one-off’
vendors, research subjects,
casual labor
• Taxes
• State or federal government
reporting- corporation
reports, real estate
transactions
• Financial reporting - SEC
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24. Places to look for PII/SSN -
Miscellaneous Processes
• State visits
• Any service that predates
non-SSN organizational id
(e.g. library, parking, travel,
conference attendance)
• Insurance (beneficiaries)
• Legal (subpoenas, court
records,etc.)
• Audit (if PII part of the
process that was audited)
• Research grants (pre-2009)
• Medicare
• Internal medical
• System backups
• Paper archives
• Printing/scanning with
devices that retain
information
• PCs after ‘delete trash’; prior
to deployment
• Email
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