The Massachusetts Attorney General’s Office and Belmont Savings Bank have agreed to resolve allegations that Belmont Savings Bank has violated the Commonwealth’s stringent data security regulations (see our post about 201 CMR 17.00 here) through an Assurance of Discontinuance, which has been filed in Massachusetts state court (see document here). Belmont Savings Bank has agreed to pay a civil penalty of $7,500 and has also agreed to institute new security and training procedures following a breach in May 2011, when an employee left a computer backup tape on a desk overnight, rather than in a storage vault. A surveillance camera showed that the backup tape was inadvertently discarded by the evening cleaning crew and, according to the Attorney General’s Office, was likely incinerated by the bank’s waste disposal company.

Recently, several large retail chains have started offering customers the option to receive electronic receipts for in-store purchasers, as the New York Times reports. For instance, a cashier may ask a customer for his or her email address at check-out and then email the receipt to the customer. Paperless receipt programs offer retailers new and exciting marketing opportunities–for instance, adding a retail store purchaser’s email address to the company’s customer relationship management database, even if that customer never shops online. But with these new opportunities come potential liabilities from old laws that were not written with this new technology in mind.
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On Monday, the Federal Trade Commission (FTC) announced that mobile application developer W3 Innovations, LLC (d/b/a Broken Thumbs Apps), has agreed to pay a fine of $50,000 in order to settle charges that it collected and disclosed personal information from children under the age of 13 without first notifying parents of information-collection policies or obtaining verifiable parental consent, in violation of the Children’s Online Privacy Protection Act (COPPA) and the FTC’s COPPA Rule (16 C.F.R. Part 312). This was the first FTC case involving mobile applications, commonly known as "Apps."

Did you know there are breach notification obligations in all 50 states (effective 9/2012), even though only 46 states have adopted them?  How could that be, you ask?  Because Texas said so.  (Does that surprise you?)

Texas recently amended its breach notification law so that its consumer notification obligations apply not only to residents of Texas, but to any individual whose sensitive personal information was, or is reasonably believed to have been, acquired by an unauthorized person.  Texas’s amended law (H.B. 300) specifically requires notification of data breaches to residents of states that have not enacted their own law requiring such notification (that is, Alabama, Kentucky, New Mexico and South Dakota). 

While the European Commission is seeking to update its 15-year-old Directive regarding the protection of personal data, several regulations have been passed to strengthen privacy rights in Europe. With all this activity, it’s clear that the United States is not the only country trying to adapt its privacy and information security standards to rapidly evolving technologies and marketplaces. Companies with an international presence need to stay alert to stay compliant. We can help!
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On December 17, 2008, Wellpoint Companies terminated the employment of one of its enrollment and billing department managers for a failure to report a suspected violation of the company’s privacy policy for information protected under HIPAA, and on July 19, 2011, the Connecticut Court of Appeals released an opinion that supported the denial of unemployment benefits to that individual for failure to report.
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India recently adopted a privacy and data security regulatory regime that fills the previous void of any such regulation with requirements that may force companies with operations in India and companies that outsource certain functions to Indian service providers to change the way they operate in order to comply. Visit our blog to see Proskauer attorney Paresh Trivedi’s article on the new Indian privacy rules.
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