United States: New California Law Protects Online Account Information

As of January 1, security breach notifications must be provided to consumers when certain account information is compromised.

On September 27, California Governor Jerry Brown signed into law Senate Bill No. 46 (S.B. 46), a new data breach notification law that expands consumer protections by requiring that security breach notifications be provided when passwords, usernames, or security questions or answers that would permit access to an online account are breached. California's existing data breach notification law requires that consumers be alerted only when a security breach has exposed Social Security numbers, driver's license numbers, credit card numbers, or medical or health insurance information. No notification is currently required when other online account information is breached. S.B. 46 will take effect on January 1, 2014.

Overview of S.B. 46

Both the existing law and the newly enacted S.B. 46 apply to any agency or any person or business that conducts business in California and owns or licenses computerized data that includes personal information. These persons or businesses are required to notify any resident of California whose unencrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person. Specifically, S.B. 46 expands the definition of "personal information" to now include either of the following pieces of unencrypted information:

  • An individual's first name or first initial and last name, in combination with any one or more of the following data elements, when either the name or the data elements are not encrypted:
    • Social Security number
    • Driver's license number of California identification card number
    • Account number or credit or debit card number, in combination with any required security code, access code, or password that would permit access to an individual's financial account
    • Medical information
    • Health insurance information
  • A username or email address, in combination with a password or security question and answer that would permit access to an online account

S.B. 46 also imposes additional requirements on the disclosure of a security breach in situations where the breach involves personal information that would permit access to an online or email account. Specifically, if the breach includes a username or email address, in combination with a password or security question and answer that would permit access to an online account, and does not include any of the other information in the above definition of "personal information," the person or business may notify the consumer in an electronic form that directs the consumer to promptly change his or her password and security question or answer, as applicable, or to take other steps appropriate to protect the online account with the business and all other online accounts for which the person uses the same username or email address and password or security question or answer.

However, if the breach includes a username or email address, in combination with a password or security question and answer that would permit access to an email account furnished by a business, the person or business must not provide the security breach notification to that email address. Instead, the person or business must comply by providing notice in one of the following methods:

  • Written notice
  • Electronic notice, if the notice provided is consistent with the provisions regarding electronic records and signatures set forth in section 7001 of title 15 of the U.S. Code
  • Substitute notice, if the person or business demonstrates that the cost of providing notice would exceed $250,000, that the affected class of subject persons to be notified exceeds 500,000, or that the person or business does not have sufficient contact information

Substitute notice shall consist of all of the following: (a) email notice when the person or business has an email address for the subject persons; (b) conspicuous posting of the notice on the Internet website of the person or business, if the person or business maintains one; and (c) notification to major statewide media. Alternatively, clear and conspicuous notice may be delivered to the resident online when the resident is connected to the online account from an Internet Protocol address or online location from which the person or business knows the resident customarily accesses the account.

The law also expressly allows people and businesses to provide notice pursuant to their own notification procedures that are part of an information security policy for the treatment of personal information as long as those procedures are otherwise consistent with the timing requirements of the statute.

Notification Requirements

The requirements for what the notification must contain remain the same as under the existing law. Specifically, the notification must be written in plain language and include, at a minimum, the following information:

  • The name and contact information of the reporting person or business
  • A list of the types of personal information that were or are reasonably believed to have been the subject of a breach
  • The following, if it is possible to determine this information at the time the notice is provided:
    • The date of the breach
    • The estimated date of the breach
    • The date range within which the breach occurred
  • Whether notification was delayed as a result of a law enforcement investigation, if that information is possible to determine at the time the notice is provided
  • A general description of the breach incident, if that information is possible to determine at the time the notice is provided
  • The toll-free telephone numbers and addresses of the major credit reporting agencies, if the breach exposed a Social Security number or a driver's license or California identification card number

The security breach notification may also include information about what the person or business has done to protect consumers whose information has been breached or advice on steps that the consumers whose information has been breached may take to protect themselves. If a notification must be given to more than 500 California residents as a result of a single breach, the reporting person or business must submit a sample copy of the notification to the state Attorney General.

Implications

The expanded law applies to all agencies, people, and businesses that conduct business in California and that own or license computerized data that includes personal information, as defined in the statute, and requires that security breach notifications must be made to residents of California. California is one of 49 states that have enacted a variety of laws addressing security breach notifications when personally identifiable information is potentially compromised. Individuals and companies should be thoughtful about their collection of personally identifiable information, maintain such information in a secure and encrypted manner to the extent possible, and implement policies to address security breaches in a timely and lawful manner in the event that they occur.

Copyright 2013. Morgan, Lewis & Bockius LLP. All Rights Reserved.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

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

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
Lewis Brisbois Bisgaard & Smith LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
Lewis Brisbois Bisgaard & Smith LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions