Welcome to Privacy Monday – here are five privacy & security bits and bytes to start your week:

1)  California AG’s Data Breach Report: Who Is Handling Your Patients’ Confidential Health Information?

The California Attorney General and Department of Justice released its October 2014 California Data Breach Report (the “California Report”) last Tuesday to great fanfare, summarizing the number and extent of data breaches affecting California residents in 2012 and 2013. Buried within the findings is a serious wake-up call to the health care industry to encrypt patient and other confidential information in transit: In 2012-2013, simply encrypting records at rest, using means as straightforward as whole-disk encryption, would have prevented 70% of the reported health care breaches.

While the retail sector snagged the headlines with vast numbers of records disclosed in two disproportionately large breaches at Target and Living Social, that focus on isolated incidents at mega-retailers hides a much more troubling finding:  apart from those two massive retail breaches, the health care sector was the largest source of leaked records.  More troubling still, a substantial majority of leaked health care records originated from the physical loss or theft of unencrypted data.

As privacy professionals, we have spent the better part of the last decade educating our colleagues and peers on the risk of data breaches, the importance of strong passwords and encryption, and the dangers of permitting unencrypted data to be transported off-site. To judge by the California Report, most industry sectors have heard the message, and have taken steps to prevent the physical apprehension of unencrypted data.  Among breaches reported in the fields of retail, finance, professional services, hospitality and education, the dominating form of breach was malware and hacking–and physical unencrypted data breaches made up no more than 35% of breaches in any of those fields, and constituted only 19% of breaches across all of those fields together.  In the health care industry, that figure was 70%.

Of course, encrypting data is not a complete solution. As the California Report indicates, data security attacks have increasingly come in the form of malware and hacking rather than physical theft of unencrypted data. As can be seen in the numbers, however, except for the truly massive troves of data available to hackers from the retail giants, the low-hanging fruit of unencrypted physical media still dominates the damage done to businesses and the patients and consumers they serve.  By implementing some  basic safeguards, such as encrypting data when computers are shut off at night, health care companies would dramatically improve the level of customer and patient care they provide at minimal cost and inconvenience to themselves.

2)  Déjà vu All Over Again – Hackers Used Vendor Access to Steal Home Depot Customer Data

Home Depot has reported that a vendor’s stolen log on credentials for the Home Depot vendor payment system provided hackers with access to the Home Depot computer network, allowing them to install malware used to record the information for 56 million credit and debit cards swiped at Home Depot point of sale terminals.  If this story sounds familiar, it is exactly the same way that hackers obtained access to the Target point of sale system to perpetrate the massive theft of Target customers’ credit and debit card data in 2013.  In both instances it is likely that the vendors were victimized by “phishing” e-mails that induced unwitting recipients to click malicious links or open virus-infected documents that provided access to the vendor systems, which hackers could then explore for potentially useful information.  The recurrence of this method of stealing customer data underscores the vital importance of ensuring that companies that do business electronically take appropriate steps to ensure that they are protected from their business partners’ business vulnerabilities – and vice-versa.   By the numbers — 56 million payment cards and 53 million email addresses — the Home Depot data breach has the dubious honor of being the largest breach to date.

3)  US Postal Service Employees Get Breach Notice Delivered

The US Postal Service today said that more than 500,000 employees could have been victims of a “cyber intrusion incident,” including names, Social Security numbers and addresses.   Information given by USPS customers to a call center between January 1 and August 16 of this year (names, addresses, email addresses) may have been compromised.   According to the Wall Street Journal, the USPS says that revenue systems were not compromised.

4)  Webinar:  Solicitation of Customers & Employees in Social Media Age

This week, Mintz Levin’s Employee Mobility Practice Group will be presenting a webinar regarding the impact of social media on post-employment restrictive covenants.    The webinar is FREE (CLE credit in NY and CA!) and you can find the registration information here.

5) Massachusetts Insurer Not Liable for Theft of Personal Data

Our colleague, Jeff Robbins, was quoted in a recent article in Massachusetts Lawyers Weekly about the Adams v. Congress Auto Insurance Agency, Inc. case, in which Mintz Levin successfully represented the defendant.  An employee of Congress Auto Insurance Agency allegedly accessed an accident victim’s personal contact information from a company database and passed it on to her boyfriend, who allegedly used the information to harm a third party.  The third party later sued our client.  Judge Peter B. Krupp ruled that the insurance agency could not be held liable for the employee’s actions.  This ruling is noteworthy as relatively little case law exists on the issue of negligence liability when data is used in impermissible ways.   Read more here.