Data Security: The Time Is Now

As we pass the midpoint of 2005, identity theft and information security issues are reaching critical mass in politics, law enforcement and the media. When corporate officers and attorneys return from their summer vacations, they will find a high-risk environment for any company that has failed to make data security a top priority. Among the recent developments:

• At least 13 states have passed new laws that require businesses to notify customers when personal information is compromised, and at least 22 other states are considering such laws. Several bills are pending in Congress that would impose similar duties on a nationwide basis.

• New Federal Trade Commission ("FTC") rules on proper disposal of customer information took effect on June 1, 2005. The FTC wants to prove that it is serious about enforcing those rules. One or more unfortunate companies will help the FTC prove its point.