Security is the cheaper option – stop avoiding it.

Another Data Protection Act fine (civil monetary penalty) was announced yesterday (25 Oct 12), and again it is largely the result of risk management mistakes meaning that a cheap preventative measure was ignored and, instead, a fairly hefty fine has been paid.

The fine came as a result of a solicitor acting on behalf of Stoke-on-Trent City Council sending out emails containing sensitive data over an insecure channel. From the ICO’s announcement:

If this data had been encrypted then the information would have stayed secure. Instead, the authority has received a significant penalty for failing to adopt what is a simple and widely used security measure.

This is a pretty damning statement.

In most organisations, the first approach would be to identify the person who had compromised the data and investigate them with a view to disciplinary action to pass-off the ICO fine. However in this instance that doesn’t seem to have been an option:

The ICO’s investigation found the solicitor was in breach of the council’s own guidance which confirmed that sensitive data should be sent over a secure network or encrypted. However, the council had failed to provide the legal department with encryption software and knew that the team had to send emails to unsecure networks. The council also provided no relevant training.

So the Council has gone to the effort of producing guidance on what should be done but failed to deliver the proper training and failed to provide suitable tools for the task.

If the Council had invested £10,000 in security training and a further £10,000 in implementing a good encryption package, they would have been able to save £120,000 in fines – a sixfold return of investment. The reality is that the upfront costs would have been significantly less than £20,000 as WinZip would have been a perfectly suitable choice of encryption tool here and 500 licences costs £2195..). Unfortunately for the Council, all they have done is delay the costs of providing the training and implementing the tools – they will have to pay that as well as the ICO fine now.

This breach, and £120,000 fine is very similar to one recently imposed on Greater Manchester Police, who were fined the same sum of money on 16 October following the burglary at the home of an officer which resulted in an unencrypted USB stick being stolen. Use of the free software TrueCrypt would have saved them from the fine…(even assuming they had to pay £10,000 to train staff in its use, they would have avoided £110,000 worth of penalty).

Outside the UK, the matter gets worse where there has to be greater consideration of the number of records breached. In an example based on Gartner’s findings, it has been reported that a data breach can cost 70 times the cost of implementing encryption.

Whatever the jurisdiction, with or without a regulatory obligation, the fact remains that this boils down to a risk management choice.

You can opt to implement the correct measures from the outset, accept that you will be paying something but it will be less than the costs that will come from a breach (fines, lost of customer confidence, brand damage etc) or you can opt to take the risk.

If you have made the decision to take the risk, you absolutely must make sure you put aside sufficient funds to cover the damage you are likely to face and the costs of remediating the issues you have chosen to avoid. There is no free lunch here.

Anything other than these two choices is not risk management, it is just closing your eyes and hoping nothing goes wrong. Barely a week goes by without there being evidence that this is a forlorn hope.

So, take this opportunity to learn from the lessons here, review your processes, training and tools and make sure you have adopted a proper risk managed approach to the risk of a data breach. At least that way, if you have a breach, you are properly positioned to deal with the consequences.

Taz Wake - Halkyn Security

Certified Information Systems Security Professional with over 19 years experience providing in-depth security risk management advice to government and private sector organisations. Experienced in assessing risks, and producing mitigation plans, worldwide in both peaceful areas and war zones. Additionally, direct experience carrying out investigations into security lapses, producing evidential standard reports and conducting detailed interviews to ascertain the details of the incident. Has a detailed understanding of the Security Policy Framework (SPF) and JSP440, as well as in depth expertise in producing cost-effective solutions in accordance with legislative and regulatory guidelines. Experienced in accrediting establishments and networks as well as project managing the development of secure, compliant, workable business processes.

This Post Has One Comment

  1. isentinel

    good services.

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