State Net: States Consider Dramatic Action Against Retailers In Data Security Breaches

States have taken a hard line on forcing companies to inform consumers when they suffer a data security breach. But at least four states are now considering holding retailers financially responsible for those breaches.

Sacramento, CA (PRWEB) June 4, 2007 -- According to State Net, lawmakers in 39 states are seeking to strengthen notification requirements when security breaches involve personal financial information. Four states are taking a more severe approach that would also force retailers to bear the brunt of costs resulting from such breaches from issuing new credit cards to losses related to identity theft.

The reason these bills are coming now is simple, according to Adam Martignetti, chief of staff for Massachusetts Rep. Michael Costello (D), who authored one such measure. "Right now there is absolutely no incentive for retailers to keep consumer information safe," he says. "We're trying to give everyone the incentive to keep this information safe and to use the best technology and security protocols at all times."

Right now there is absolutely no incentive for retailers to keep consumer information safe

We're trying to give everyone the incentive to keep this information safe and to use the best technology and security protocols at all times.

We already have contracts that require retailers to pay for the costs of a breach as well as these interchange fees

If you add legislation that independently adds more charges to the retailer, it would literally mean that person is paying three times for a breach.

The underlying logic of these bills is sound. But given the current political climate, I think they are going to be a very tough sale.

"We already have contracts that require retailers to pay for the costs of a breach as well as these interchange fees," he says. "If you add legislation that independently adds more charges to the retailer, it would literally mean that person is paying three times for a breach."

According to California Sen. Joe Simitian (D) who authored the first notification bill in 2002, "The underlying logic of these bills is sound. But given the current political climate, I think they are going to be a very tough sale."

To date this session, 218 data security-related bills have been introduced across the nation. Currently, 24 states and Congress are in regular legislative session.

About State Net
State Net (www.statenet.com) has helped organizations track legislative and regulatory developments for more than 30 years. Headquartered in Sacramento, CA, State Net monitors every bill in the 50 states, District of Columbia and Congress along with all state agency regulations. The company delivers online services, issue-based consultation and analysis that enables the nation's leading organizations to effectively respond to opportunities and risks in the states.

State Net Capitol Journal delivers coverage of issues, decisions, scandals and politics from all 50 states. Featuring analysis of emerging trends, state budgets, governors, legislatures and elections, Capitol Journal readers gain an intelligent overview of the states and issues each week.

References:
Ehisen, R. (2007, May 21). Should retailers pay for security breaches? State Net Capitol Journal. http://www.statenet.com/capitol_journal/05-21-2007/html

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