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Friday, April 05, 2013

Utah data breach to cost state more money in fraud protection services

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Data breaches are among the most costly, devastating incidents that organizations may suffer. Depending on the nature of the breach, the firm and its industry/role, these events may lead to significant fines or other sanctions for failure to abide by relevant regulations, as well as serious damage to the organization's reputation.

The potential damage caused by data breaches is not limited to businesses. Any organization is likely to suffer significant consequences if its sensitive information is exposed. This is why so many firms of all kinds invest in secure file sharing tools to safeguard their data when it is being sent or received.

The value of these tools and data protection strategies is further emphasized by the fact that the costs of data breaches often extend much further than the organizations may initially expect. A notable example of this can be seen in Utah, which recently announced that it will continue to pay for credit monitoring services for victims of a 2012 breach.

Fallout
The breach, which occurred in May, resulted in the exposure of 280,000 patients' Social Security numbers. Additionally, less sensitive information concerning 500,000 other individuals was exposed in the incident.

Following this data breach, the state of Utah offered to pay for credit monitoring services for anyone potentially affected by the incident. This is a relatively standard policy for organizations that have suffered such a breach, as it demonstrates a commitment toward protecting customers and clients and therefore may regain some of the goodwill lost during the breach.

Because of the number of people involved, Utah's bill for credit monitoring services was undoubtedly quite high. Now, the state has announced that it is dedicating a further $1 million to extend these credit monitoring services for another year. Furthermore, the state's health department will use $300,000 to initiate a privacy and security office with the goal of improving data security, the Associated Press reported.

In addition to the added cost of these efforts, there are also significant logistical challenges that the state has had to overcome. The Salt Lake Tribune reported that some breach victims have recently received notices from Experian, the credit bureau whose monitoring services Utah hired, alerting them that they must pay a fee to continue receiving fraud protection. According to state officials, these notices stem from miscommunications.

"We're working with them on that," explained Tom Hudachko, a health department spokesman, the news source reported. "Everyone should be getting a message some time in the next few weeks about [the state-paid] extension."

Resources needed
As these developments suggest, a data breach can have serious, long-lasting consequences for an organization. Firms should therefore invest in tools that can effectively reduce the likelihood of these breaches occurring. By implementing secure file sharing resources throughout the organization, for example, employees can send and receive data easily without compromising protection.