Are You Prepared for a Data Breach?

January 3, 2014

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  Are You Prepared for a Data Breach                     

I was just going to Wal Mart to get some milk for my son. It’s always an easy in and out trip through the self checkout lane. I swipe my credit card and get a message saying my credit card was not accepted. That’s odd. I know I paid my bill on time. I make another form of payment and immediately call the credit card company when I get in my car. My account was frozen due to suspicious charges. There was a charge of over $400 at a comic book store in California. First off, I have never been to California. Secondly, I am a baseball card nerd and not a comic book nerd.

Luckily, it was a credit card and not a debit card. With a credit card, I had the minor inconvenience of having my account frozen until I received a new card in the mail. If it had been a debit card, I would have had the headache of attempting to get the stolen money put back in my bank account.

When you are a victim of identity theft, you have many emotions: fear, anger, despair, etc. Imagine the source of this mess is due to a data breach at a local business with whom you are a customer. Now you have someone to focus all your anger at. A small business can never erase what their customers must go through if a data breach occurs, but insurance can be purchased to respond to a data breach situation.

Many states have personal information protection laws. Illinois is one of those states. Illinois has the Personal Information Protection Act. The scope of who falls under this act is very broad. The definition of data collector includes but is not limited to: government agencies, public and private universities, privately and publicly held corporations, financial institutions, retail operators, and any other entity that for any purpose handles, collects, disseminates, or otherwise deals with nonpublic personal information. As you can see, this means that pretty much anyone doing business falls under the scope of the law.

One of the requirements of the law is that anyone who could possibly be affected by the data breach must be notified. This is not as easy as it sounds. There is a form letter that must be mailed to each person or entity that costs around $90 per letter. Notification costs alone can be sizeable in a data breach situation, let alone possible legal and defense fees.

As I mentioned above, the good news is that there is insurance coverage available for data breach situations. Options are available for $50,000 data breach coverage all the way to $1 Million coverage. Please contact me at 345-7063 or at oetting@consolidated.net if you would like to discuss how Bob Oetting & Associates can protect you from this growing exposure.


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