If you’re a small business in Texas, chances are you have an almost non-existent IT infrastructure in place. But what happens when your company has been the victim of a data breach?
Cyber-criminals are rampantly upping their attacks on small businesses because of their greater chances for security vulnerabilities. Such as:
- Lack of awareness
- No dedicated IT support members
- Lack of employees being properly trained to safeguard information
- Lack of security software due to budget concerns
- Outsourcing security to unqualified administrators
If you are a small business that handles sensitive customer data and are a victim of a cyber-attack (contact info, credit card data, health data, intellectual properties, passwords) then you must be aware that Texas requires notice to be given “as quickly as possible” and a civil penalty is possible for any delay. Tex. Bus. & Com. Code §§ 521.002, 521.053, and 521.151. While the civil penalty that a business could end up paying to the State is capped at $250,000, there are very few small businesses that could afford such a penalty, let alone the damages that you could face should customers file their own lawsuits, or join together in a class-action against your business.
How are small businesses attacked?
Usually in the form of an e-mail with an innocent looking .zip file or .pdf file attachment. The e-mail is usually spoofed as to appear genuine from a credible source or even from an e-mail account that’s been taken over. Once the attachment has been open then the trap is sprung and business owners, or employees, may not even be aware that they have been attacked. The attacker now has access to the infected machine and will go after as much information as they can obtain. Then, the attacker contacts the business owner and holds the information as ransom in exchange for a sum of money that can range anywhere from hundreds to thousands of dollars. It usually depends on how valuable the information is to the business and attackers are well versed on understanding what information is most critical to obtain.
The result can have dire consequences for any business along with the reputation loss that can occur. Without proper legal and security protocols in place, “any business who fails to take reasonable action to comply with Section 521.053(b) is liable to this state for a civil penalty of not more than $100 for each individual to whom notification is due under that subsection for each consecutive day that the person fails to take reasonable action to comply with that subsection.” Furthermore, if a third-party also has their information compromised then your business can be subjected to a lawsuit as well.
What can small businesses do to protect their information?
The FCC has created a list of ten key cybersecurity tips to protect your small business. This is the best place to start to help you better understand what vulnerabilities you may be facing. In addition, the FCC has a Cyberplanner, an online resource to help small businesses create customized cybersecurity plans. Use this tool to create and save a custom cyber security plan for your company, choosing from a menu of expert advice to address your specific business needs and concerns.
- Train employees in security principles. Establish basic security practices and policies for employees, such as requiring strong passwords and establish appropriate Internet use guidelines, that detail penalties for violating company cybersecurity policies. Establish rules of behavior describing how to handle and protect customer information and other vital data.
- Protect information, computers, and networks from cyber attacks. Keep clean machines: having the latest security software, web browser, and operating system are the best defenses against viruses, malware, and other online threats. Set antivirus software to run a scan after each update. Install other key software updates as soon as they are available.
- Provide firewall security for your Internet connection. A firewall is a set of related programs that prevent outsiders from accessing data on a private network. Make sure the operating system’s firewall is enabled or install free firewall software available online. If employees work from home, ensure that their home system(s) are protected by a firewall.
- Create a mobile device action plan. Mobile devices can create significant security and management challenges, especially if they hold confidential information or can access the corporate network. Require users to password protect their devices, encrypt their data, and install security apps to prevent criminals from stealing information while the phone is on public networks. Be sure to set reporting procedures for lost or stolen equipment.
- Make backup copies of important business data and information. Regularly backup the data on all computers. Critical data includes word processing documents, electronic spreadsheets, databases, financial files, human resources files, and accounts receivable/payable files. Backup data automatically if possible, or at least weekly and store the copies either offsite or in the cloud.
- Control physical access to your computers and create user accounts for each employee. Prevent access or use of business computers by unauthorized individuals. Laptops can be particularly easy targets for theft or can be lost, so lock them up when unattended. Make sure a separate user account is created for each employee and require strong passwords. Administrative privileges should only be given to trusted IT staff and key personnel.
- Secure your Wi-Fi networks. If you have a Wi-Fi network for your workplace, make sure it is secure, encrypted, and hidden. To hide your Wi-Fi network, set up your wireless access point or router so it does not broadcast the network name, known as the Service Set Identifier (SSID). Password protect access to the router.
- Employ best practices on payment cards. Work with banks or processors to ensure the most trusted and validated tools and anti-fraud services are being used. You may also have additional security obligations pursuant to agreements with your bank or processor. Isolate payment systems from other, less secure programs and don’t use the same computer to process payments and surf the Internet.
- Limit employee access to data and information, and limit authority to install software. Do not provide any one employee with access to all data systems. Employees should only be given access to the specific data systems that they need for their jobs, and should not be able to install any software without permission.
- Passwords and authentication. Require employees to use unique passwords and change passwords every three months. Consider implementing multifactor authentication that requires additional information beyond a password to gain entry. Check with your vendors that handle sensitive data, especially financial institutions, to see if they offer multifactor authentication for your account.
If you have any questions regarding the legal aspect of a security breach then please contact me today.