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Information Security … A Guide For Business #1 Start with Security

Updated: Jan 9


Ten practical lessons businesses can learn from the FTC’s (business.ftc.gov) 50+ data security settlements.  This is part #1 … Start with Security.

When managing your network, developing an app, or even organizing paper files, sound security is no accident. Companies that consider security from the start assess their options and make reasonable choices based on the nature of their business and the sensitivity of the information involved. Threats to data may transform over time, but the fundamentals of sound security remain constant. As the Federal Trade Commission outlined in Protecting Personal Information: A Guide for Business, you should know what personal information you have in your files and on your computers, and keep only what you need for your business. You should protect the information that you keep, and properly dispose of what you no longer need. And, of course, you should create a plan to respond to security incidents.

There’s another source of information about keeping sensitive data secure: the lessons learned from the more than 50 law enforcement actions the FTC has announced so far. These are settlements – no findings have been made by a court – and the specifics of the orders apply just to those companies, of course. But learning about alleged lapses that led to law enforcement can help your company improve its practices. And most of these alleged practices involve basic, fundamental security missteps. Distilling the facts of those cases down to their essence, here are ten lessons to learn that touch on vulnerabilities that could affect your company, along with practical guidance on how to reduce the risks they pose.

#1  Start with Security

From personal data on employment applications to network files with customers’ credit card numbers, sensitive information pervades every part of many companies. Business executives often ask how to manage confidential information. Experts agree on the key first step: Start with security. Factor it into the decision making in every department of your business – personnel, sales, accounting, information technology, etc. Collecting and maintaining information “just because” is no longer a sound business strategy. Savvy companies think through the implication of their data decisions. By making conscious choices about the kind of information you collect, how long you keep it, and who can access it, you can reduce the risk of a data compromise down the road. Of course, all of those decisions will depend on the nature of your business. Lessons from FTC cases illustrate the benefits of building security in from the start by going lean and mean in your data collection, retention, and use policies.

Don’t collect personal information you don’t need.

Here’s a foundational principle to inform your initial decision-making: No one can steal what you don’t have. When does your company ask people for sensitive information? Perhaps when they’re registering online or setting up a new account. When was the last time you looked at that process to make sure you really need everything you ask for? That’s the lesson to learn from a number of FTC cases. For example, the FTC’s complaint against RockYou charged that the company collected lots of information during the site registration process, including the user’s email address and email password. By collecting email passwords – not something the business needed – and then storing them in clear text, the FTC said the company created an unnecessary risk to people’s email accounts. The business could have avoided that risk simply by not collecting sensitive information in the first place.

Hold on to information only as long as you have a legitimate business need.

Sometimes it’s necessary to collect personal data as part of a transaction. But once the deal is done, it may be unwise to keep it. In the FTC’s BJ’s Wholesale Club case, the company collected customers’ credit and debit card information to process transactions in its retail stores. But according to the complaint, it continued to store that data for up to 30 days – long after the sale was complete. Not only did that violate bank rules, but by holding on to the information without a legitimate business need, the FTC said BJ’s Wholesale Club created an unreasonable risk. By exploiting other weaknesses in the company’s security practices, hackers stole the account data and used it to make counterfeit credit and debit cards. The business could have limited its risk by securely disposing of the financial information once it no longer had a legitimate need for it.

Don’t use personal information when it’s not necessary.

You wouldn’t juggle with a Ming vase. Nor should businesses use personal information in contexts that create unnecessary risks. In the Accretive case, the FTC alleged that the company used real people’s personal information in employee training sessions, and then failed to remove the information from employees’ computers after the sessions were over. Similarly, in foru International, the FTC charged that the company gave access to sensitive consumer data to service providers who were developing applications for the company. In both cases, the risk could have been avoided by using fictitious information for training or development purposes.