As technology has led to new methods of large-scale information and identity theft, protecting consumer data has become a primary concern for businesses large and small. Privacy laws are continually being amended and updated to increase a company’s legal duty of care when it comes to handling, storing, and protecting sensitive customer information. This includes increasing cybersecurity measures and other protections as needed.
Companies that fail to properly protect consumer data can face numerous issues from civil penalties to public relations nightmares that can affect customer loyalty and overall profitability. Lost goodwill of a business can be costly and a company can work to overcome losses for years after a major data breach. It is extremely important for every business owner to discuss adequate data protection measures with a skilled business attorney to not only protect customers but the business itself.
Duty to Protect Confidential Information
Like individuals, companies also have the duty to act with reasonable care in the course of operations. This includes the care to keep confidential information regarding both customers and employees safe. If such sensitive data is exposed because a company did not take the necessary protection measures, the company can be found negligent and liable for any financial losses experienced by victims of the data breach.
For instance, the social security numbers of a company’s workforce are posted on a website that is accessible to the public instead of in confidential HR files. Some employees have their identities stolen, lose money, and have to spend time to change their personal information. The company can be held liable for compensating the employees for any expenses incurred.
Certain companies may have legal duties under specific laws to protect certain types of data. For example:
- The Children’s Online Privacy Protection Act enforces regulations that apply to websites that can collect information from children younger than thirteen.
- The Health Information Portability Accountability Act (HIPAA) requires certain protections for any medical data collected by companies.
- The Family Education Rights and Privacy Act (FERPA) protects educational documents and records.
- State laws can protect various types of information, including financial data, social security numbers, driver’s license numbers, and more.
Any company that collects any type of consumer or employee information should be aware of all of the laws that apply to them, as well as their general duty to protect sensitive information. A skilled business lawyer can advise you of any applicable laws to your business and advise you of any additional actions you should take.
Contact a Highly Experienced Business Law Firm
While the law requires companies to protect consumer data, it does little to specify the exact type of measures that businesses should take to prevent a data security breach. It is important to consult with a business attorney who can advise you whether your security measures are adequate and in full compliance with the law. At The Weisblatt Firm, we keep up to date on new technology and consumer data security for all types of businesses. We can help you protect against a breach or fight against liability for a breach, so please call our office today at 713-352-0847 to discuss the legal needs of your company.