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Deadline Approaching for Mass Data Security Law: No More Time to Procrastinate

Guest post by: Kenneth C. Halkin

Article Overview: The March 1, 2010 deadline for compliance with the Massachusetts Data security Laws is fast approaching and will not likely be further extended. This law effects any business or individual who stores data on any Massachusetts resident whose unauthorized access might compromise the privacy of that individual’s personal information. Failure to comply could be costly. Compliance for some may be very simple, while for others it could be both complicate and expensive.

Deadline Approaching for Mass Data Security Law: No More Time to Procrastinate

The March 1, 2010 deadline for compliance with the Massachusetts Data security Laws is fast approaching and will not likely be further extended. This law effects any business or individual who stores data on any Massachusetts resident whose unauthorized access might compromise the privacy of that individual’s personal information. Failure to comply could be costly. Compliance for some may be very simple, while for others it could be both complicate and expensive.

Personal information (PI) is defined as first name and last name or first initial and last name along with one or more of the following:

1. Social Security Number
2. Drivers License number or state-issued card I.D. number
3. Any financial account, debit or credit card number

If you have employees or independent contractors, then you are likely storing such personal information and must comply with the regulations under this law. If you take credit card information or bank account information from customers, and you store and/or transmit this information, then you must comply, as well. This data may be electronic or on paper. Both must be equally safeguarded.

Compliance involves the following:

1. Employing safeguards for the secure storage, transmission and destruction of PI.
2. Documenting those safeguards in the form of written policies and procedures.
3. Providing documented training to employees and/or subcontractors who handle PI.
4. Reporting known data security breaches to the individual, as well as to the required state authorities, including the Attorney General, Director of Consumer Affairs, Information Technology Division and Division of Public records.

The security of paper records involves limiting physical access to such files to those who have a business reason and are authorized to access and view the information. It further requires that such files be maintained in locked file cabinets or storage units when not being utilized. Even when in use, the information can not be visible to the public or to unauthorized personnel.

Electronic PI data must be password secured so that only authorized individuals can access it. If it transmitted through the internet or otherwise through phone lines or is stored on portable devices, such as flash drives or disks, the data must be encrypted so that it can not be read by unauthorized parties.

If you transmit data to subcontractors or vendors, such as Bookkeepers, Accountants or payroll services, you are responsible to assure that those entities are in full compliance with the law, as well.

The law also provides for the proper disposal of records, both physical and electronic, so that they can not be found and read by unauthorized parties. Te proper disposal of records must be documented. Those using third partied to destroy records must receive written documentation from the third party that the disposal was in compliance with the law.

Those found to be in non-compliance may be fined $5,000 for each violation plus assessed reasonable costs for investigation and litigation, including attorneys fees. It would not be surprising if after March 1, 2010, the AG’s Office goes looking for some test cases to try.

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Article Tags: Business Advice, Business News, Massachusetts data security, Massachusetts security law Deadline



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