Blackbaud Facing Lawsuit After Ransomware Attack

Blackbaud Facing Lawsuit After Ransomware Attack

by | Sep 9, 2020 | Cyber Awareness, GDPR, ransomware

In July, we wrote about a ransomware attack suffered by the cloud computing provider Blackbaud that led to the potential exposure of  personal information entrusted to Blackbaud by hundreds of non-profits, health care organizations, and educational institutions. At the time the ransomware attack was announced, security experts questioned Blackbaud’s response to the breach. Now, the Blackbaud ransomware attack isn’t just raising eyebrows, with the company facing a class action lawsuit for their handling of the attack.

Blackbaud was initially attacked on February 7th of this year. However, according to the company, they did not discover the issue until mid-May. While the time it took the company to detect the intrusion was long, it is increasingly common for threats to go undetected for long periods of time. What really gave security experts pause is how Blackbaud responded to the incident after detecting it.

The company was able to block the hacker’s access to their networks, but attempts to regain control continued until June 3rd. The problem, however, was that the hackers had already stolen data sets from Blackbaud and demanded a bitcoin payment before destroying the information. Blackbaud remained in communication with the the attackers until at least June 18th, when the company payed the ransom. Of course, many experts questioned Blackbaud’s decision to pay given that there is no way to guarantee the attackers kept their word. And, to make matters worse, the company did not public announce the incident to the hundreds of non-profits that use their service until July 16th  — nearly two months after initially discovering the incident.

Each aspect of Blackbaud’s response to the ransomware attack is now a part of a class action lawsuit filed against the company by a U.S. resident on August 12th. The main argument of the lawsuit claims that Blackbaud did not have sufficient safeguards in place to protect the private information that the company “managed, maintained, and secured,” and that Blackbaud should cover the costs of credit and identity theft monitoring for those affected. The lawsuit also alleges that Blackbaud failed to provide “timely and adequate notice” of the incident. Finally, regarding Blackbaud’s payment of the ransomware demand, the lawsuit argues that the company “cannot reasonably rely on the word of data thieves or ‘certificate of destruction’ issued by those same thieves, that the copied subset of any Private Information was destroyed.”

Despite the agreement among privacy experts that Blackbaud’s response to the attack was anything but perfect, lawsuits pertaining to  data breaches have historically had a low success rate in the U.S.. According to an attorney involved in the case, showing harm requires proving a financial loss rather than relying on the more abstract harm caused by a breach of privacy: “The fact that we don’t assign a dollar value to privacy [means] we don’t value privacy.”

Whatever the result of the lawsuit, questions still persist on whether Blackbaud’s response violates the E.U.’s General Data Protection Regulation. The GDPR requires organizations to submit notification of a breach within 72 of discovery. Because many of Blackbaud’s clients are UK-based and the company took months to notify those affected, it is possible Blackbaud could recevie hefty fines for their response to the attack. A spokesperson for the UK’s Information Commissioner’s Office told the BBC that the office is making enquiries into the incident.

As for the non-profits, healthcare organizations, and educational institutes that were affected by the breach? They have had to scramble to submit notifications to their donors and stakeholders that their data may have been compromised. Non-profits in particular rely on their reputations to keep donations coming in. While these organizations were not directly responsible  for the breach, this incident highlights the need to carefully review third-party vendors’ security policy and to create a written security agreement with all vendors before using those services.

E.U. and U.S. Privacy Framework Struck Down

E.U. and U.S. Privacy Framework Struck Down

by | Jul 22, 2020 | Compliance, GDPR, Regulations

Last week the top court in the European Union found that Privacy Shield, the framework used to transfer data between the E.U. and the U.S., does not sufficiently protect the privacy of E.U. citizens. and is therefore invalid. The courts decision has left many businesses scrambling and throws the difference between E.U and U.S. privacy standards in stark relief.

Privacy Shield was a data sharing framework enacted by the E.U. courts in 2015. Since then, however, the E.U. established the General Data Protection Regulation (GDPR) three years later, which places stricter privacy requirements when processing the data of E.U. citizens.  According to the Washington Post, over 5,300 companies — including Facebook, Google, Twitter, and Amazon — that signed up to use the Privacy Shield framework now need to find a new way to handle the data of E.U. citizens in the United States.

The court made their decision after privacy expert Max Schrems filed a complaint against Facebook for violating his privacy rights under the GDPR once Facebook moved his information to the U.S. for processing. While the GDPR does allow the data of E.U. citizens to be transferred to other countries, that data must continue to comply with the GDPR standards after it is transfer. The problem with Privacy Shield, according to the E.U. decision, is that the U.S. government has wide-reaching access to personal data stored in the United States. And while the E.U. acknowledges that government authorities may access personal information when necessary for public security, the courts ultimately found that the U.S. does not meet the requirements of the GDPR “in so far as the surveillance programmes…. are not limited to what is strictly necessary.”

This decision starkly highlights the differences not only in E.U. and U.S. privacy regulations but also the privacy standards used in surveillance activities. In a statement to the Washington Post, Schrems said, “The court clarified…that there is a clash of E.U. privacy law and U.S. surveillance law. As the E.U. will not change its fundamental rights to please the [National Security Agency], the only way to overcome this clash is for the U.S. to introduce solid privacy rights for all people — including foreigners….Surveillance reform thereby becomes crucial for the business interests of Silicon Valley.”

Moving forward, U.S. companies processing E.U. citizen data will either need to keep that data on servers within the E.U. or use standard contractual clauses (SCCs). SCCS are legally agreements created by individual organizations that cover how data is used. Of course, any SCCs will need to be compliant with the GDPR.

Time will tell exactly how this ruling will affect U.S. businesses with data from E.U. citizens, but this is only one of many example that the E.U. is taking consumer privacy extremely seriously. All businesses that have users within the U.S., large or small, should therefore carefully assess their privacy practices and ensure it is in line with the GDPR. At the end of the day, it’s better that have a privacy policy that is stricter than it needs to be than to scramble at the last second when the E.U. makes a new ruling like they did last week.

GDPR Report Shows Success with Room for Improvement

GDPR Report Shows Success with Room for Improvement

by | Jul 1, 2020 | GDPR, Regulations

The EU’s General Data Protection Regulation (GDPR), one of the most comprehensive privacy laws in the world, celebrated its two-year anniversary last month. The regulation establishes a range of privacy and data protection rights to EU citizens, such as widened conditions for consent and the right to request companies delete user data, and requires organizations to implement technical safeguards. Along with the regulation comes some pretty hefty fines. Google, for example, received a 50 million euro fine for failing to properly state how they use consumer data. The law also requires that the GDPR commission release a report evaluating the regulation after the first two years, then every four years going forward. In compliance with the law, the commission released their report this month, broadly finding the regulation a success, but also highlighting certain areas for improvement.

Strengths

According to the GDPR report, one of the regulation’s main successes is the increased awareness of the privacy rights among EU citizens, and that they are empowered to exercise those rights. The report found that 69% of the EU population above 16 has heard of the GPDR and 71% know about their country’s nation data protection agency. One issue however, is that this awareness has not fully translated into the use of these rights. The right to data portability, for example, which allows users to obtain and transfer their data, shows potential to “put individuals at the centre of the data economy,” but, according to the report, is still underutilized.

One other area of success is the flexibility of the regulation in its ability to apply to principles of the law to emerging technologies. This has been especially important recently, with the rise of the COVID-19 pandemic and the numerous tracing apps created. The report found that the GDPR has been successful in providing a framework that allows for innovation while ensuring that these new technologies are created with privacy in mind.

Areas of Improvement

Perhaps the biggest area of concern that the report highlights, is the uneven enforcement of the GDPR among EU states. All EU members states except Slovenia have adopted the law. However, the report notes that the law has not been applied consistently across the board. For example, the GDPR allows individual member states to set the age of consent for data processing, but this has created uncertainty for children and parents and made it more difficult for companies that conduct business across borders. The commission has recommended a creating codes of conduct to apply across all member states in order to allow for more consistency between states.

The GDPR report also found that there is some inconsistency when it comes to enforcing the regulations. Overall, the report found that the various data protection agencies were properly using their strengthened enforcement capabilities, but worried that resources have not been evenly divided among the agencies. While some countries that are seen as tech hubs require additional resources, the commission found that the overall budget allocation was too inconsistent.

 

Taking a step back, the GDPR report largely shows that the new regulation has had a positive impact on the views towards privacy, and has empowered individuals to take control of their information. The law, however, is still relatively new, and will continue to require tweaks to better serve consumers. Privacy regulations continue to be a work in progress, but are at least headed in the right direction.

Coronavirus and the Right to Privacy

Coronavirus and the Right to Privacy

by | Mar 25, 2020 | Coronavirus, GDPR, Privacy

 The coronavirus has unquestionably changed the way we live. It has also forced us into strange and, until just a few weeks ago, unthinkable ethical dilemmas. To visit loved ones is worth genuine ethical reflection. Modern nations, especially in the West, are built on an ethics of individual freedoms and the right to privacy. However, the current global health crisis is forcing us to rethink just how fundamental those ethics should be. While we already feel this with regards to the freedom of movement, we are just beginning to contemplate how the coronavirus can and should effect our right to privacy.

Contact Tracing and Enforced Quarantine

In order to limit the spread of the coronavirus, experts emphasize the importance of tracking every contact infected patients have had with others. Countries such as China, Singapore, South Korea, and Taiwan have all taken aggressive measure trace all potential contact infected people have had. These measures are widely considered to be a large reason why these countries have been successful in lowering the rate of transmission. However, the aggressive measures taken have come at the cost of individual privacies.

Taiwan and Singapore, for example, regularly post detailed information about everyone who test positive, including where they live and work, what train stations they have used, and what bars and restaurants they frequent. South Korea now has an app that allows users to track the exactly movement of those infected.

Countries are also using location data to enforce quarantine for those infected. Israel, for example, is now using data collection techniques previously used for counterterrorism efforts to identify anyone potentially exposed to the virus. The government uses this information to send text messages to those exposed ordering them to quarantine.

European and the U.S. Response

As the coronavirus spreads to Europe and the U.S., lawmakers are exploring the use of similar techniques. Italy now uses location data to monitor whether people are obeying quarantine orders. In the U.S., the White House is reportedly in conversations with tech companies to use anonymized location data to track the spread of the virus. HIPPA regulations are being waived to allow doctors and mental health providers to more freely use telecommunication to speak with patients. Companies in Italy, Austria, and Germany have also announced that they will provide location data to governments.

However, with privacy regulations such as the GDPR, it is unclear how aggressively European countries will be able to use personal information. The European Data Protection Board (EDPB) released a statement urging governments to continue to abide by privacy regulations in place. At the same time, however, the EDPB conceded that countries may suspend such regulations “when processing is necessary for reasons of substantial public interest in the area of public health.”

Consequences

Relaxing the right to privacy has garnered mixed responses by government officials and security experts. Many have pointed out that while the measures taken are extreme, personal information such as location data is highly effective in limiting the spread of the coronavirus. “We are stretched very thin in most states,” said the director of the Center for Global Health at Oregon State University, “so this kind of technology can help every state to prioritize, given their limited resources, which communities, which areas, need more aggressive tracking and testing.”

Others are concerned how this could endanger those whose information is made public. In South Korea, some have used information released by the government to identify infected individuals and attack them online. This has led officials to question how the government uses this information, worrying it will discourage others from getting tested for fear of being publicly exposed.

While nearly all countries have explained suspending the right to privacy is a temporary measure for the benefit of the public health, many worry it will have a permanent effect on how governments and countries view privacy concerns. After 9/11, for example, the U.S. used highly invasive surveillance measures that have since become common place among law enforcement agencies. According to the New York Times, privacy experts worry something similar could happen after the current crisis.

What restrictions we, as a society, can tolerate, and what effect this will have after the current crisis remains an open question. However, it may also involve a false choice.  There are technologies to both assist contract tracing and preserve anonymity.  Privacy by Design does not have to be put on pause as we develop these tools.  In fact, if we want to encourage wide adoption, it might be required.

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Writing a Privacy Policy You’ll Actually Want To Read

by | Jul 26, 2019 | CCPA, GDPR, Privacy

Creating a privacy policy is necessary for any business collecting or processing personal information and is essentially a legal agreement between you and people visiting your website. And more often than not privacy policies are thought of as just that: a legal buffer. But with more users mistrusting the services they use, these policies should instead be seen as an opportunity to build trust with customers, establish a level of transparency, and show that your respect their privacy.  

Here is a short primer on what should be included in a privacy policy, and how to write it in a way that is accessible to users.  

The What

What information you collect 

It’s important to be upfront about all type of information you may collect about your users. This not only includes personal information (name, email, phone number, etc.), but also things like usage and analytics data, as well as the first- and third-party cookies.  

How you collect information 

Listing the methods used to collect data is another important aspect of a privacy policy. Is it information that they are freely providing? Is it automatically collected through your browser? Is it collecting through a script or plug-ins on your website? Providing this information will help users make informed decisions on how to navigate your site in a way that fits their privacy needs.  

How you use information 

It’s essential that you inform users not only of what you’re collecting, but how you’re using that information. In many cases, it can help explain why it’s important that you collecting this information in the first place. Examples include customer service, payment processing, and improving site experience. On top of these, you’ll also need to state if you’re using data for marketing and joint marketing purposes. 

What information you share and why 

You’ll also want to state any information that you share with others. This might be for something like third-party advertising but can also include other companies related by common ownership, non-affiliates that market to you, or even non-profits using the data for research studies. Today, users are concerned about understanding who has access to their data, so this information is especially important.   

How that information is secured  

This is something you’ll definitely want your users to know about. Listing what security systems and practices you have in place will go a long way to show users that you care about their privacy and are taking the necessary steps to ensure it’s secure. 

What privacy options do users have 

It’s become more common for websites to give users some choice with regards to their privacy. This includes whether they can access the data that has been collected, the ability to change what information they want to share, whether they can delete data previous collected, as well as the ability to decide how long you hold on to their information. If you allow users these options, you want to explicitly state that they have those abilities.  

Who users can contact about privacy concerns 

Another component to your privacy policy should be a contact person that users can contact when they have questions or concerns regarding the policy or any other privacy-related issues. It’s important that users have someone they can reach out to when they have concerns.  

Regulation Compliance 

Lastly, depending on where you operate and even where your servers are located, you may be subject to certain privacy regulations that require you to both include certain components in your policy as well as explicitly state your compliance with these regulations. Two big regulations that could effect your privacy policy is the California Consumer Privacy Act (CCPA) (effective in 2020) and the EU’s General Data Protection Regulation (GDPR). Another important regulation is the Children’s Online Privacy Protection Act (COPPA) which requires certain privacy controls and parental consent before collecting data on children under 13. 

The How

Above all, when it comes to writing your privacy policy, it should be readable. 

Your users shouldn’t need a law degree to understand what’s in the policy. Write in plain English. Keep it as short as possible. While there is a lot of information to include, you should stay as concise as possible. If need be, you can layer the policy, meaning have basic language that provides a general overview and link else for details about different sections. Lastly, you want to ensure that the policy itself is easily accessible to users. It shouldn’t be tucked away in tiny font. Place it somewhere prominent that users to find whenever they’d like to refer back to it. 

This is especially important if you need to comply with the GDPR. Not only does the regulation require you to include certain information in your privacy policy, but also includes requirements to ensure your policy is sufficiently clear. The GDPR’s website provides some guidance on privacy policy best practices that you can find here.  

Even if you’re not subject to the GDPR, it’s probably a good idea to try and follow their guidelines as well. Again, your privacy policy isn’t just a legal safeguard. It should be understood as a way to communicate to your users about their privacy and ensure them you’re being transparent about your data collection.  

Privacy Sells

by | Jul 14, 2019 | CCPA, GDPR, Privacy

There is no doubt that technology and digital tools have helped business grow. From more effective lead generation to highly-targeted marketing campaigns, there is a lot that organization can gain from using such tools.  And, there is a lot that consumers gain in terms of ease, cost and convenience.

Follow the adage that “there is no free lunch”, consumers do pay a number of costs related to the access to their data — the costs related to their ability to learn, costs related to their ability to expand beyond their narrow world past decisions, choices and interactions, costs related to their ability to feel and act independent and costs related to their privacy or their ability to choose how and with whom they share information about themselves.

Regulations such as the European GDPR and the California CCPA are upping the ante for businesses to install more privacy mechanisms in place.  And typically, when business hears regulation it hears disruption (in the bad way, not the sexy positive way disruption is used most times today).

But it doesn’t have to be that way.  Set aside the regulation and focus on your brand.  Focus on your relationship with your customer. Then ask yourself the following questions:

  1. Am I willing to be transparent of what I do with my customer’s data?
  2. Am I willing to tell my customers to whom their data may be shared (and hold those parties to the standards I am committing ourselves to with regards to the customer’s data)?
  3. Am I willing to ask my customers if it is ok to use their data for specific purposes?
  4. Am I willing to assist my customers if they wish to change or delete their data from our systems?
  5. Am I focused on only asking for or tracking data that I absolutely need in order to delight them and enhance our combined experience?
  6. Am I prepared to put in necessary safeguards to protect their data while it is on our systems?

If you can say ‘yes’ to each of these questions, not only will you have an opportunity to comply with privacy regulations, but you put yourself in the position of respecting your customer and enhancing your brand.

Perhaps privacy does sell.