Identity Theft

Subscribe to Identity Theft via RSS

According to regulations published by the Federal Trade Commission and the federal banking agencies, covered companies that hold any customer accounts must implement identity theft prevention programs that identify and detect “Red Flags” signaling possible identity theft. Companies establishing such programs must create policies and procedures not only to recognize and detect Red Flags, but also to respond to Red Flags by preventing or mitigating potential identity theft. Furthermore, companies must develop reasonable policies and procedures to verify the identity of a customer opening an account, and must also periodically update their identity theft programs. The rules went into effect on January 1, 2008, and businesses must comply by November 1, 2008.
…

Where the only “damages” alleged following a data security breach are the costs of credit monitoring, a plaintiff has no case, so ruled the Seventh Circuit on August 23, 2007. The decision dealt another blow to so-called “identity exposure” plaintiffs seeking to recover damages stemming from the unauthorized disclosure of their personal information, as the Seventh Circuit’s ruling joined the unanimous line of lower court decisions denying recovery in the absence of actual, present harm.

In Pisciotta v. Old National Bancorp, — F.3d –, 2007 WL 2389770 (7th Cir. Aug. 23, 2007), the court ruled that “Indiana law would not recognize the costs of credit monitoring that the plaintiffs seek to recover in this case as compensable damages.” Id. at *6. In doing so, the Seventh Circuit joins a chorus of federal district courts that uniformly reject such costs as a form of cognizable injury sufficient to support legal claims for damages.

We thought it might be helpful to provide citations to the 37 state (plus D.C. and Puerto Rico) breach notification laws that cover private entities (Oklahoma’s law, that only addresses state agencies, is not included). We also provide links, or uploaded copies, where available.
…

A recent decision from the Southern District of Ohio echoes prior decisions of district courts addressing negligence claims against companies that have experienced a data breach. The court held that the cost of obtaining credit monitoring services does not count as damages without evidence of identity fraud. Kahle v. Litton Loan Servicing LP, case no. 1:05cv756.
…

The protection of Social Security numbers (SSNs) from identity thieves has emerged as a hot news topic in the past few weeks. In California, it was revealed that, for the past three years, the Secretary of State’s office has been selling in bulk electronic UCC filings containing SSNs. Those filings were available to the public on the Secretary’s website, so that lenders and creditors could verify the availability of personal property used as collateral. Approximately one-third of the state’s two million UCC filings contained SSNs. Secretary of State Debra Bowen immediately shut off web-based access to the UCC filings and took down the offending part of the website.