UK: Named And Shamed - Will Your Data Security Breach Make The Headlines?

Last Updated: 16 November 2006
Article by James Brunger

In February 2005 database giant ChoicePoint revealed that 145,000 consumers across the United States were placed at risk by a recent data theft at the company. The data thieves created accounts for nonexistent debt collectors, insurance agencies and other companies, which gave them access to personal information stored on the ChoicePoint databases.

ChoicePoint originally notified its security breach only to those affected individuals that resided in California. The California Security Breach Notification Act (S.B. 1386), implemented in July 2003, requires notice to be given to Californian consumers of any breach in the security of unencrypted computerised personal information. At the time, California was the only US state to have implemented such legislation.

However, following pressure from other US states, ChoicePoint eventually disclosed the breach to affected individuals nationwide. This disclosure has now been adopted as a "best practice" standard in the US and the Californian law has been adopted in some form across 31 states. (, 27 June 2006)

A broad spectrum of US corporations, governmental departments and universities has since notified affected individuals of security breaches. From these disclosures it is estimated that a total of 97,148,596 records containing sensitive personal information have been involved in security breaches.

(Privacy Rights Clearinghouse,, 3 November 2006)

Data security breaches are certainly not unique to the US. In June 2005, The Sun exposed a security breach at Indian call centre Infinity eSearch. An employee sold an undercover reporter a CD containing confidential details of 1,000 British bank accounts and boasted that he could sell up to 200,000 account details each month.

However, unlike in the US data security breaches in the European Union are dealt with behind closed doors. In February 2006, Ernst & Young lost a laptop containing personal data relating to the employees of several client companies. IT news website The Register claims that the breach was not publicly disclosed until it contacted Ernst & Young and forced a response ( EU law (E-Privacy Directive (2002/58/EC)) requires providers of a publicly available electronic communications service to inform subscribers if there is a particular risk of a breach of network security. However, there is no requirement to inform a regulator of such risks or indeed to notify anyone in the event of an actual security breach.

The European Commission is concerned by this situation. It recently declared in June 2006 that providers of electronic communications networks and services have "so far failed to address security problems to the satisfaction of users." In response, buried in a consultation document broadly concerned with changes to the regulation of the communications industry, the European Commission has proposed an increase in security. Section 7.2 of the Communication on the Review of the EU Regulatory Framework for electronic communications networks and services - Proposed Changes (SEC (2006(816)), 28 June 2006 proposes to require providers of electronic communications networks and services to:

  • notify the relevant national regulator of any breach of security which led to the loss of personal data and/or to interruptions in the continuity of service-supply. The regulator would then be able to inform the general public of the breach if it considered that it was in the public interest to do so; and
  • notify their customers of any breach of security leading to the loss, modification or destruction of, or unauthorised access to, customer personal data.

The proposals will bring EU security breach notification requirements more into line with those in the US. The Commission considers that the pressure to avoid being publicly named and shamed will provide further encouragement for providers of electronic communications networks and services to keep personal data secure.

However, the proposals are not as wide in scope as US breach requirements. The Californian law affects personal data held by any business, government agency or non-profit organisation regardless of geographic location whereas the Commission proposals will only affect network operators and ISPs. The European Commission states that it has identified these two groups "as carrying a special responsibility, as the gatekeepers for users’ access to the on-line world, for data security". But it is likely to have restricted the proposed security changes to keep them within the ambit of the review. At present there does not appear to be any suggestion that the Commission might in the future broaden the requirements to affect all organisations holding personal data.

In the US, there was some concern that the adoption by other states of laws similar to the Californian breach law would lead to an increase in the number of claims and potentially even class actions from those affected. It was felt that the additional awareness generated by a notification would point more victims of fraud and identity theft towards the organisation suffering from a security breach. However, it should be remembered that breach notification gives affected individuals an opportunity and duty to take all reasonable steps to avoid or minimise their loss. This may perhaps result in fewer and lower value claims.

From a data security point of view, it remains to be seen whether notifications are an effective method of reducing credit card fraud or identity theft. Large high profile security breaches in the US have continued since the nationwide adoption of disclosure as a ‘best practice’ standard. Bear in mind that under the US requirements the focus is on notifying affected individuals after things have gone wrong, rather than on requiring security measures to be implemented so as to prevent the security incident in the first place. And while it is true that consumers are best placed to deal with the personal consequences of a security breach (e.g. by obtaining identity theft insurance) and should be notified, it can be argued that a focus on notification rather prevention shifts much of the responsibility for an organisation’s security breach on to the individual. Unlike the US requirements, however, the EU proposal would be in addition to laws specifically requiring an organisation to implement "appropriate" security measures. This being so, a statutory breach notification requirement could well supplement the existing "preventative" obligations.

In addition, unless the European Commission sets clear thresholds for the severity of breaches that require notification, subscribers may be flooded with disclosures. This could lead to general apathy towards data security breaches amongst subscribers and increase the risk of credit card fraud and identity theft; clearly having the opposite effect to that which the Commission is trying to achieve.

The Commission’s public consultation has now closed and publication of the contributions received is expected in 4th Quarter 2006 ( as at 8 November 2006). The Commission intends to propose legislative measures to Parliament and Council early in 2007 and expects any new legislative provisions to come into force around 2009/2010.

The Commission Staff Working Document which set out the proposed changes can be found on the European Union website, Europa:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.