AG Fox Urges Congress to Preserve Authority to Enforce State Data Breach and Data Security Laws

Joining a bipartisan effort to ensure that any future federal data breach notification or data security law is effective and provides consumers with the best protection, Attorney General Tim Fox today joined a multistate letter to the U.S. Congress emphasizing the importance of maintaining states’ authority to enforce data breach and data security laws, and their ability to enact laws to address future data security risks.

Citing recent efforts in Congress to pass a national law on data breach notification and data security, AG Fox, joined by 46 other attorneys general, cautions against federal preemption of state data breach and security law and argues that any federal law must not diminish the important role states already play protecting consumers from data breaches and identity theft, especially in states like Massachusetts whose laws provide greater protections than federal counterparts.

Attorney General Fox said, “One of our top priorities in the recent legislative session was the passage of HB 74 (Rep. Ryan Lynch – Butte), which requires that notice be given to my office when a consumer data breach has occurred. This new law gives us a better sense of the scope of identity theft in Montana, and might also identify businesses which have lax security practices. This is important, because while notification at the federal level might make sense for nationwide breaches, it wouldn’t work for breaches that only impact one state or region.” Attorney General Fox added, “Our Office of Consumer Protection needs to have the ability to enforce these laws, now and in the future.”

The letter points out a number of concerns with federal preemption of state data breach and security laws, including:

• Data breaches and identity theft continue to cause significant harm to consumers. Since 2005, nearly 5,000 data breaches have compromised more than 815 million records containing sensitive information about consumers – primarily financial account information, Social Security numbers or medical information. Full-blown identity theft involving the use of a Social Security number can cost a consumer $5,100 on average.

• Data security vulnerabilities are too common. States frequently encounter circumstances where data breach incidents result from the failure by data collectors to reasonably protect the sensitive data entrusted to them by consumers, putting consumers’ personal information at unnecessary risk. Many of these breaches could have been prevented if the data collector had taken reasonable steps to secure consumers’ data.

• States play an important role responding to data breaches and identity theft. The States have been at the frontlines in helping consumers deal with the repercussions of a data breach, providing important assistance to consumers who have been impacted by data breaches or who suffer identity theft or fraud as a result, and investigating the causes of data breaches to determine whether the data collector experiencing the breach had reasonable data security in place. Forty-seven states now have laws requiring data collectors to notify consumers when their personal information has been compromised by a data breach, and a number of states have also passed laws requiring companies to adopt reasonable data security practices.

The letter urges Congress to preserve existing protections under state law, ensure that states can continue to enforce breach notification requirements under their own state laws and enact new laws to respond to new data security threats, and to not hinder states that are helping their residents by preempting state data breach and security laws.

In 2005, 44 state attorneys general wrote a similar letter to Congress calling for a national law on breach notification that did not preempt state enforcement or state law.

Today’s letter, co-sponsored by Arkansas, Connecticut, Illinois, Indiana, Maryland, Massachusetts and Nebraska, was also joined by the following states and territories: Alabama, Alaska, Arizona, California, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, and West Virginia. The letter is available here: https://dojmt.gov/wp-content/uploads/Final-NAAG-Data-Breach-Notification-Letter-07-07-15.pdf

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