The document discusses security concerns related to e-commerce and electronic communications. It summarizes the Electronic Communications Privacy Act (ECPA), which prohibits interception of emails and access to stored emails. The ECPA allows employers to monitor employees with consent. The document also discusses the Computer Fraud and Abuse Act, which makes hacking and unauthorized computer access illegal, as well as the Economic Espionage Act's prohibitions against theft of trade secrets. Additional topics covered include types of hacking attacks, viruses, and insurance related to technology risks.

1. Security Concerns with
e-Commerce
Bretttrout.com
Copyright 2001 Brett J. Trout

2. Electronic Communications Privacy
Act and Employers (ECPA)
 Enacted in 1986
 Amends Omnibus Crime Control Act
Copyright 2001 Brett J. Trout

3. ECPA
 Prohibits interception of e-mail
 Prohibits access to stored e-mail
 Allows Employers to monitor employees
 Applies to both
 Accessing database
 Capturing keystrokes
Copyright 2001 Brett J. Trout

4. ECPA Title II
 Prohibits intentional access of an electronic
communication service
 Relates to any stored electronic communication
 Email
 Fax
 etc.
Copyright 2001 Brett J. Trout

5. ECPA Title II Exceptions
 Provider of the service
 AOL
 Employer
 Etc.
 Anyone with authorization
 Express
 Implied.
Copyright 2001 Brett J. Trout

6. ECPA Title III
 Prohibits intentional interception of any
electronic communication
 Makes it a crime to capture email while
enroute
Copyright 2001 Brett J. Trout

7. ECPA Title III Exceptions
 Employee consented
 impliedly
 expressly
 employment agreement
 email policy
 Employer interception must be in the ordinary
course of business
Copyright 2001 Brett J. Trout

8. ECPA Take Home
 Employer can
 Monitor stored e-mail
 Intercept e-mail
 Give Employees express notice
 employment agreement
 email policy
 Monitor only in ordinary course of business
 Stop reading if e-mail is personal
Copyright 2001 Brett J. Trout

9. Computer Fraud and Abuse Act
 Enacted in 1984 to stem computer crime
 Amended in 1996 (National Information
Infrastructure Protection Act) to criminalize:
 Threats to computer networks
 Release of viruses or worms
 Hacking
 Hijacking
 Destructive ecommerce activity
Copyright 2001 Brett J. Trout

10. CFAA Makes it Illegal
 To knowingly access a computer without
authorization
 For fraudulent purposes
 To access confidential information
 To access financial information
 To cause damage to a computer system
Copyright 2001 Brett J. Trout

11. Economic Espionage Act
 Enacted in 1996
 18 U.S.C. section 1831 et seq.
 Makes it illegal to take or receive
trade secrets
 Enacted to curb economic and
industrial espionage
Copyright 2001 Brett J. Trout

12. EEA
 Civil Penalties
 Injunction
 Forfeiture of profits and instrumentalities
to government
 Criminal Penalties
 Injure or benefit - 10yr/250K/5M
 Benefit foreign power – 15yr/500K/10M
Copyright 2001 Brett J. Trout

13. Hacking
 According to PriceWaterhouseCooper
 Hacking cost United States companies
$1.5 trillion in 2000
 World Trade Center insurable loss
$50 billion
 One year of hacking equals 30 Trade
Center attacks.
Copyright 2001 Brett J. Trout

14. Types of Hacking
 Denial of Service Attack
 Packet Sniffing
 Spoofing
 Keystroke Monitoring
 Viruses
 Cracking
 Exploiting Holes
 Diddling
Copyright 2001 Brett J. Trout

15. Denial of Service Attack
 Any action to prevent server from functioning
 Usually enlists unsecure computers to bombard
server with requests
 Floods server
 Prevents normal functioning
 Difficult to track down
Copyright 2001 Brett J. Trout

16. Packet Sniffing
 Internet information travels in packets with
“header”
 Sniffer software searches for packets containing
these headers
 Used to audit and identify network packet traffic
 Can uncover passwords and/or usernames
 Easy to do
 Difficult to detect
Copyright 2001 Brett J. Trout

17. Spoofing
 Pretending to be another user
 Includes
 Deceptive sender information (spam)
 Deceptive use of username and/or
password
Copyright 2001 Brett J. Trout

18. Keystroke Monitoring
 Inexpensive software
 Installed on computer
 Hardwired to computer
 Allows
 Reconstruction of user’s activity
 Identification of usernames/passwords
 Illegal
Copyright 2001 Brett J. Trout

19. Viruses
 Software that
 Modifies other software
 Replicates itself
 Sends itself on to other computers
 Types
 Replication
 DOS
 Data destruction
Copyright 2001 Brett J. Trout

20. Virus Prevention
 Virus protection software
 Only works if it is turned on
 Constantly update
 Keep apprised of latest viruses
 Do not open attachments from unknown
senders
Copyright 2001 Brett J. Trout

21. Virus Prevention
 Do not open files with extensions:
 .exe
 .vbs
 .pif
 Use Eudora, rather than Outlook
Copyright 2001 Brett J. Trout

22. Cracking
 Defeating copy-protection
 Determining passwords/usernames
 Typically illegal
Copyright 2001 Brett J. Trout

23. Exploiting Security Holes
 Microsoft XP e-wallet
 Unauthorized users could get credit card
information
 Microsoft Outlook
 Vulnerable to viruses
 Keep abreast of
 New developments
 Patches
Copyright 2001 Brett J. Trout

24. Diddling
 Obtaining unauthorized access to
 Modify
 Delete
 Set time bomb
Copyright 2001 Brett J. Trout

25. Insurance
 Typically very expensive
 Very good exercise to identify and address
problems
Copyright 2001 Brett J. Trout

26. Insurance
 The number of companies who cited their
Internet connection as a frequent point of attack
has increased steadily from 47% in 1998 to 70%
in 2001.
Marsh Advantage America
Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

27. Insurance
 78% of companies acknowledged financial
losses due to computer breaches
 37% of companies are willing or able to quantify
their financial losses
 The most serious financial losses occur through
theft of proprietary information.
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

28. Misconceptions
 I have staff in place who are keeping me safe
 I have a firewall, so I’m protected
 Our network is password protected, so I’m doing all I
can.
 Our contracts transfer liability, so I have nothing to
worry about
 My employees would never do anything to jeopardize
my companies data
Copyright 2001 Brett J. Trout

29. Risks
Legal Risks
Credibility Risks
Security Risks
Financial Risks
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

30. Legal Risks
 Defense Costs - exaggerated because of the lack of
current case law
 Inability to determine value of Intellectual Property
 Copyright/Trademark Infringement
 Libel/Slander & Defamation
 Plagiarism
 D&O suit for insufficient security measures
 Regulatory Costs
Copyright 2001 Brett J. Trout

31. Security Risks
DigitalTerrorism
Internal Crime
External Crime
Virus Attacks
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

32. Credibility Risks
Organizationsthat experience security
breaches keep them quiet.
A breach can do grave damage to a
company’s reputation.
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

33. Financial Risks
Prior risks translate into costs:
Business Income Loss
Reconstruction of lost data
Investor Relationships
Defense Costs
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

34. Solutions
 Identify & Prioritize the risks
 Consider Technology Solutions
 Consider Process/Policy Solutions
 Transfer or Eliminate Risks that are to costly
to retain
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

35. Key People
 The C’s - CEO’s, CFO’s, CTO’s, CSO’s, CIO’s
 Human Resources
 IT
 Marketing
 Legal Counsel
 Risk Manager/Insurance Agent
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

36. Misconceptions
I have coverage under my package policy
 I have an E&O Policy that covers it
 I have an EDP Policy
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

37. Policies Cover
 Policies may include coverage for:
 Virus Attacks
 Data reconstruction
 Business Income Loss
 Disaster Recovery
 Defense Costs, etc.
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

38. Costs
 Pricing varies greatly based on exposures.
 Third party policies are vastly more affordable
than First party policies.
 You can expect to pay anywhere from $7,500 to
$100,000 for a Cyber Risk Policy.
Marsh Advantage America-Leisa Fox
www.netsecuresite.com
Copyright 2001 Brett J. Trout

39. Internet Privacy
You have zero privacy anyway
Get over it.
 Scott McNeally, Sun Microsystems CEO Wired
News (March 11, 1999)
Copyright 2001 Brett J. Trout

40. Internet Privacy Policy
 Components
 Notice of Data Collection – How, What,
Why
 Choice – Partial or total “opt out”
 Access to Data – Option to modify or
delete
 Security
Copyright 2001 Brett J. Trout

41. Internet Privacy
 Privacy Policy
 Develop one today
 Follow it
 Designate IT privacy czar
 Audit your policy - regularly
Copyright 2001 Brett J. Trout

42. Consumer Privacy Protection Act
 Pending legislation
 Mandates privacy collection procedures
 Private Right of Action
 $50,000 statutory damages
 Punitive damages
 Attorney fees
 Something like this will become law
Copyright 2001 Brett J. Trout

43. Cookies
 A computer science term
 An opaque piece of data held by an
intermediary
Copyright 2001 Brett J. Trout

44. What is a Cookie?
 HTTP header
 Text-only string
 Associated with your browser
 Unique identifier
 Cannot be used as a virus
 Cannot access your hard drive.
Copyright 2001 Brett J. Trout

45. Doubleclick
 Doubleclick used cookies to aggregate user
information
 Users sued
 SDNY Court held 3/28/2001
 No violation
Copyright 2001 Brett J. Trout

46. Children’s Online Privacy
Protection Act
Requires the Federal Trade Commissioner to
issue and enforce regulations which
regulate the ability of Websites to collect
personal information from children under
the age of 13.
Copyright 2001 Brett J. Trout

47. COPPA
 Passed into Law October 21, 1998
 Covers personal information collected after
April 21, 2000
 COPPA applies to
 Web sites and online services
 Targeted to, or know they are
 Collecting data
 From children under 13.
Copyright 2001 Brett J. Trout

48. COPPA Requirements
 Post a privacy policy
 Conspicuous
 What data you collect
 What you do with it.
 Obtain verifiable consent from the child's parent
 Before you collect any data. Importantly
 Change in policy requires new consent
Copyright 2001 Brett J. Trout

49. COPPA Requirements
 Give option to revoke consent
 Allow parents to review data collected
 Ensure security and integrity of the data you
collect.
Copyright 2001 Brett J. Trout

50. Gramm-Leach Bliley
Subjects “financial institutions” to certain
reporting and disclosure requirements
intended to ensure the personal and
financial privacy of customers
Copyright 2001 Brett J. Trout

51. “Financial Institution”
 Lending, exchanging, transferring, investing for
others, or safeguarding money or securities;
 Issuing or selling instruments representing
interests in pools of assets which a bank can
hold directly;
 Engaging in any activity … so closely related to
banking or managing … as to be a proper
incident thereto.
Copyright 2001 Brett J. Trout

52. GLB Data Disclosure
 Opt out
 Prohibits disclosure by financial institution, without
allowing consumer to opt out.
 Third party disclosure
 Allowed for the purpose of permitting third party to
perform services for the financial institution.
Copyright 2001 Brett J. Trout

53. GLB Data Disclosure
 Prohibits third party from disclosing nonpublic
personal information
 Unless disclosure would be lawful if made directly to
such other person by the financial institution.
 Prohibits sharing of account number
information for marketing purposes
 Different requirements for different levels of
relationships.
Copyright 2001 Brett J. Trout

54. Health Insurance Portability and
Accountability Act
Forces health providers and insurers to use
technology in a more uniform, less
proprietary manner
Copyright 2001 Brett J. Trout

55. HIPPA Goals
 Standardization
 Security
 Privacy
Copyright 2001 Brett J. Trout

56. Areas of Focus
 Technical Security Services
 User authorization and authentication
 Access control and encryption
 Administrative Procedures
 Formal security planning
 Record maintenance and audits
 Physical Safeguards
 Security to building
 Privacy for workstations handling patient information
Copyright 2001 Brett J. Trout

57. HIPPA
 Can apply to both health care and non-health
care entities
 Forces covered entities to uniformly transmit
and receive certain data electronically
 Requires the use of standard identifiers (rather
than proprietary codes) to identify health care
providers, employers, health plans and patients
Copyright 2001 Brett J. Trout

58. Employers
 Must have written policies and notify employees
of HIPPA policies
 Must get consents to the release of certain
information in certain circumstances
 Must give employees access to their medical
records
 Must have contacts in place with providers to
insure that they safeguard information
Copyright 2001 Brett J. Trout

59. Employers
 Identify stored health information and who has
access to it
 Identify how the information is used and its
flow
 Correlate all privacy policies
 Standardize all relevant third-party provider
contracts
Copyright 2001 Brett J. Trout

60. European Union Directive on
Privacy
 Effective 25 October 1998
 Every EU must enact national law consistent
with the Directive
 Many EU countries had privacy laws before the
Directive
Copyright 2001 Brett J. Trout

61. EU Directive
 World-wide standard
 Enforcement has begun in the U.S.
Copyright 2001 Brett J. Trout

62. Compliance
 The Safe Harbor
 Specific contracts blessed by European Data
Protection Authorities
 Exceptions or derogations to the Directive
Copyright 2001 Brett J. Trout

63. Safe Harbor
 Seven privacy principles issued by US
Department of Commerce on July 21, 2000 for
“personal data” collection
Copyright 2001 Brett J. Trout

64. Seven Provisions
 Notice
 Opt in
 Opt out
 Security
 Maintain Integrity of Data
 Procedure for Data Correction
 Data Transfer
Copyright 2001 Brett J. Trout

65. Notice
 Clear Language
 Purpose of Collection
 Contact information for inquiries or
complaints
 To whom you disclose information
 Options for limiting use and disclosure of
the information.
Copyright 2001 Brett J. Trout

66. Opt in/Opt out
 Opt out
 Disclosed to third party
 Used for new purpose
 Opt in
 Sensitive information
 Race, health, union membership, sexual preference
 If disclosed to third party
 If used for new purpose
Copyright 2001 Brett J. Trout

67. Security
 Loss
 Misuse
 Unauthorized access
 Disclosure
 Alteration
 Destruction.
Copyright 2001 Brett J. Trout

68. Maintain Integrity of Data
 Reliable for intended use
 Accurate
 Complete
 Current.
Copyright 2001 Brett J. Trout

69. Procedures For Correction
 Correct, amend, or delete inaccurate information
 Not necessary where:
 Burden much greater than potential harm
 Would compromise confidential information of
others
Copyright 2001 Brett J. Trout

70. Data Transfer
 Must include
 Notice Provisions
 Choice Provisions
 Agent must
 Subscribe to the foregoing principles; or
 Enter into a written agreement requiring agent
provide at least the same level of privacy protection
as provider
Copyright 2001 Brett J. Trout

71. Safe Harbor
 Access
 Individuals must have access to “their” information
 Ability to correct or remove inaccurate information
 “Disproportionate burden” exception
 Enforcement
 Mechanisms for investigating and resolving
complaints
 Procedures for verifying privacy statements
 Obligation to remedy problems
Copyright 2001 Brett J. Trout

72. EU Directive
 Enforcement by competitors
 Failure to comply could lead to cut-off in data
and actions against European partners
Copyright 2001 Brett J. Trout

73. Falling Under Safe Harbor
 Self-certification on DOC website
 Hard part - applying to business practices
 Financial services firms cannot join Safe Harbor
unless under the FTC
Copyright 2001 Brett J. Trout

74. EU Directive
 Over 40 countries now have substantial privacy
laws
 Most either copy or comply with the EU Privacy
Directive
Copyright 2001 Brett J. Trout

75. EU Directive
 Compliance requirement is real
 Safe Harbor likely best but not only option
 Don’t copy another company’s privacy policy
Copyright 2001 Brett J. Trout

76. What To Do
 Audit current privacy practice
 Develop EU Directive conforming policy
 Comport practice with policy
 Require Warranties & Indemnities from third
parties using your data
 Encrypt data transmissions
Copyright 2001 Brett J. Trout

77. Privacy Technology
 Establish Firewall
 Monitor Cookies – turn off as appropriate
 Run Virus Detection Software
 Anonymizer
 TRUSTe - will review your privacy policy
 Asymmetric cryptography
 Future technology
 Platform For Privacy Preferences
 Defines exactly the level of information disclosed
Copyright 2001 Brett J. Trout

78. Additional Steps
 Security Policies
 Rotate passwords
 Monitor access and file transfer
 Implement network vulnerability study
 Implement a disaster recovery plan
 Limit modification of workstation
 Obtain insurance
Copyright 2001 Brett J. Trout

79. Thank You
Copyright 2001 Brett J. Trout