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Inside this Article:
The Growing Importance of Privacy in the Digital Age
The significance of privacy cannot be overstated. The past year has witnessed a surge in privacy regulations, emphasizing the need for businesses to proactively adapt and ensure cyber security compliance to maintain the trust of their customers.
At Emagined Security, we understand the critical nature of privacy and stand ready to assist organizations in navigating these changes. Our team diligently monitors the latest privacy regulations, offering tailored solutions for industry-specific and operational needs.
The Rising Tide of State Legislation on Consumer Privacy
Consumer privacy issues have grown in importance in state legislatures recently. Keeping abreast of these regulations is crucial, considering the exponential growth in fines that organizations may face for noncompliance. Before 2023, at least five states enacted comprehensive consumer privacy laws:
California Consumer Privacy Act of 2018 and the California Consumer Privacy Rights Act
Colorado Privacy Act, 2021 SB 190
Connecticut Personal Data Privacy and Online Monitoring
Utah Consumer Privacy Act, 2022 SB 227
Virginia Consumer Data Protection Act
When they become in force:
Existing Legislation: California is the gold standard for state privacy laws, having enacted the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA). Connecticut, Colorado, Utah, and Virginia have also enacted comprehensive privacy laws currently in effect.
Existing legislation not in force yet: Montana, Oregon, and Texas privacy laws have passed and will be enforced in 2024, Delaware, Iowa, and Tennessee will be effective in 2025, and Indiana's privacy law will be effective in 2026
Pending Legislation: There are currently 22 states with consumer privacy legislation pending. Many states, including Alaska, Hawaii, Massachusetts, New York, Pennsylvania, Washington, Wisconsin, and New Jersey, have pending privacy bills.
The laws:
California Consumer Privacy Act (CCPA): Businesses must provide a privacy notice to consumers, respond to consumer requests within 45 days, and have a "Do Not Sell My Personal Information" link on their website.
Virginia Consumer Data Protection Act (VCDPA): Businesses must provide a privacy notice to consumers, respond to consumer requests within 45 days, and conduct data protection assessments.
Colorado Privacy Act (C.P.A.): Businesses must provide a privacy notice to consumers, respond to consumer requests, conduct data protection assessments, and obtain consent before processing specific sensitive personal data.
Connecticut Data Privacy Act (CTDPA): Businesses must provide a privacy notice to consumers, respond to consumer requests, and notify affected consumers and the Office of the Attorney General in case of a data breach.
Delaware Personal Data Privacy Act (DPDPA): Businesses must provide a privacy notice to consumers, respond to consumer requests, and conduct risk assessments.
Indiana Consumer Data Protection Act (INCDPA): Businesses must provide a privacy notice to consumers, respond to consumer requests within 45 days, and conduct risk assessments.
Iowa Consumer Data Protection Act (ICDPA): Businesses must provide a privacy notice to consumers, respond to consumer requests, and conduct risk assessments.
Montana Consumer Data Privacy Act (MCDPA): Businesses must provide a privacy notice to consumers, respond to consumer requests, and conduct risk assessments.
Oregon Consumer Privacy Act (OCPA): Businesses must provide a privacy notice to consumers, respond to consumer requests, and conduct risk assessments.
Tennessee Information Protection Act (TIPA): Businesses must provide a privacy notice to consumers, respond to consumer requests within 45 days, conduct risk assessments, and notify affected consumers and the Office of the Attorney General in case of a data breach.
Texas Data Privacy and Security Act (TDPSA): Businesses must provide a privacy notice to consumers, respond to consumer requests, and notify affected consumers and the Office of the Attorney General in case of a data breach.
Utah Consumer Privacy Act (UCPA): Businesses must provide a privacy notice to consumers, respond to consumer requests, and conduct risk assessments.
2023: A Landmark Year for Consumer Privacy Laws
In 2023, eight states have enacted comprehensive consumer privacy laws: Delaware, Florida, Indiana, Iowa, Montana, Oregon, Tennessee and Texas. Additionally, in 2023 the landscape of consumer privacy legislation has expanded, with over 40 states considering at least 350 bills.
The list on this webpage details the latest regulations that are in place or being considered including State, Bill Number, Bill Title, Bill Status, Bill Summary, and Category.
As you can see, the list goes on and on. How can organizations keep up to date and comply with all these regulations? California, for instance, has 19 enacted or pending privacy regulations spanning various sectors. These privacy regulations span Children’s Online Privacy, Medical Privacy, Financial Privacy, Student Privacy, In-Vehicle Cameras, Insurance Privacy, and more. It’s getting out of control and the fines that organizations are facing are growing exponentially.
Understanding the Financial Implications of Privacy & Cyber Security Compliance Violations
Don’t let your organization get caught off guard by state and international regulations when an issue arises and get multiple fines for noncompliance (sample regulations):
CPRA: If you do not comply with the CPRA, your organization could be subject to fines of $2,000 per violation, $2,500 for negligent violations, and $7,500 for willful violations.
CCPA: Intentional violations of the California Consumer Privacy Act can bring civil penalties of up to $7500 for each violation in a lawsuit brought by the California Attorney General on behalf of the people of the State of California. The maximum fine for other violations is $2500 per violation.
GDPR: For especially severe violations, listed in Art. 83(5) GDPR, the fine framework can be up to 20 million euros, or in the case of an undertaking, up to 4 % of their total global turnover of the preceding fiscal year, whichever is higher. But even the catalog of less severe violations in Art. 83(4) GDPR sets forth fines of up to 10 million euros, or, in the case of an undertaking, up to 2% of its entire global turnover of the preceding fiscal year, whichever is higher.
HIPAA: Unknowing Penalty range: $100 - $50,000 per violation, with an annual maximum of $25,000 for repeat violations. HIPAA violation: Reasonable Cause Penalty range: $1,000 - $50,000 per violation, with an annual maximum of $100,000 for repeat violations. HIPAA violation: Willful neglect but violation is corrected within the required period Penalty range: $10,000 - $50,000 per violation, with an annual maximum of $250,000 for repeat violations. HIPAA violation: Willful neglect and is not corrected within the required period Penalty range: $50,000 per violation, with an annual maximum of $1.5 million.
Brazil: Lei General de Dados Pessoais (LGDP) - Monetary fines can consist of a single fine of up to 2% of the company's revenue, limited in total to R$ 50,000,000.00 Brazilian Real (or nearly $1 million US Dollars) per infraction; or a daily fine with a total limit of R$ 50,000,000.00 Brazilian Real (or nearly $1 million US Dollars).
New York SHIELD Act: Violations of the SHIELD Act are enforced exclusively by the New York Attorney General. For violations of the breach notification mandate, the New York Attorney General may bring actions for civil penalties of up to actual damages and consequential financial losses (if notice of a data breach is not provided) incurred by residents for negligent violations, or the greater of $5,000 per violation or $20 per failed notification for violations that are knowing or reckless (with a $250,000 limit). Violations of the security measure requirements can incur a penalty of $5,000 per violation. Compliance with the SHIELD Act requires creating and maintaining a security program that includes administrative, physical, and technical safeguards for data privacy management.
Case Study: The High Cost of Ignorance in Privacy Regulation
As you can see, fines can quickly grow big enough to bankrupt an organization if they realize a loss. Picking on a single regulation like CPRA, it states your organization could be subject to fines of $2,000 per violation, $2,500 for negligent violations and $7,500 for willful violations.
If you have done the appropriate things and you experience a breach you may be subject to $2,000 per violation. That means that if you lose 1000 records, you may be subject to a $2,000,000 fine.
If you haven’t done due diligence (identify PII & PSI for some states, document where the data resides, have a privacy assessment for the enterprise and third parties) and you experience a breach you may be subject to $2,500 per violation. That means that if you lose 1000 records, you may be subject to a $2,500,000 fine.
Now, if you don’t understand the privacy regulations and thus you willfully neglect the regulation and share 1000 records, the fine is $7,500,000.
Think about that… what’s the chance that someone in your organization or your third party sending out 1000 records because they don’t have the appropriate knowledge or understanding of the regulations? That’s a $7,500,000 mishap. Extrapolate that to 100,000 records and the fine could be $750,000,000. Got your attention? Now that single mishap may trigger fines from multiple regulations and the number gets even bigger.
Proactive Measures to Ensure Compliance
Organizations can no longer afford to ignore privacy regulations and hope for the best. Organizations need to prepare and educate their employees, contractors, and third parties. Privacy compliance is not as complicated as you may think. It just takes proactive planning and preparation.
Comprehensive Services Offered by Emagined Security
Emagined Security offers assistance in various key areas to help you comply with privacy regulations:
Regulatory Privacy Compliance Assessments: Conducting thorough audits to assess your current privacy practices and identify areas that require attention to meet the latest regulatory requirements.
Policy Development and Implementation: Crafting and implementing comprehensive privacy policies that align with the latest regulations and reflect your organization's commitment to protecting sensitive information.
Employee Training: Providing customized training programs to ensure that your team is well-informed about the latest privacy regulations and understands their role in safeguarding customer data.
Data Mapping and Inventory: Assisting in creating a detailed map of your data flow and maintaining an inventory of the personal information you collect, process, and store.
Incident Response Planning: Developing and testing incident response plans to ensure a swift and effective response to any potential privacy breaches. This may include having notification templates ready for each state / regulation.
Securing Your Future: The Path to Compliance
Organizations can no longer afford to ignore privacy regulations. Emagined Security is here to help you navigate this complex landscape, ensuring a secure and compliant future. Contact us to strengthen your privacy practices – we're ready to assist!