The ripple effect continues to haunt Target: It’s expected that seven of its board of directors members may be replaced because they failed to provide effective oversight into the corporation’s data-protection risks. Boards simply need to be more proactive in safeguarding their companies against data breaches.

Institutional Shareholder Services (ISS) prepared a report on the Target data breach and aftermath. The report states that Target’s board members should have been kept in the loop pertaining to protection of sensitive information and what a breach could mean to brand reputation and customer loyalty.

"The company acknowledged the need for more stringent internal capabilities to identify potential risks with less reliance on external reports which suggested the systems were robust enough," the report says.

The report concludes that Target failed to prepare for keeping up with today’s cyber threat technology, and that this failure comes from the audit and the corporate responsibility committees.

ISS says that these committees are responsible for being in charge of risk assessment and management. This includes the risk of fraud. The inadequate oversight in these areas paved the way to the disastrous data breach.

The ISS report should be a wakeup call to board members of all businesses. Board members need to realize the importance of directing more time, energy and money toward improving security programs.

Though the dismissal of seven of Target’s total of 10 board members may seem radical, it also has a fair degree of rationale because it sends the message that boards and senior executives need to be held accountable for their company’s cyber security.

Boards need to be practically fused with their organization’s IT experts and executive team so that they have an intimate knowledge of the steps a company is taking to protect customer information—even if none of the board members are security experts. The ramifications from poor handling of a data security incident are now things that even board members must be aware of and work to prevent.

Don’t think in terms of “if” you’ll suffer a data breach, but rather, “when.” Once you establish this mindset, it’s time for you to develop a response plan. After all, a security system that’s impenetrable has yet to be invented.

What’s even more, an amazing number of businesses don’t even have the best security system available. So again, the data breach is a “when,” not an “if.”

For starters, a response plan should include as much information about the incident as possible, remaining transparent (consult your legal team about the types of information that should and should not be disclosed) and being aggressive at managing the circumstances.

Another area to consider when developing a response plan is how the data breach will impact customers and clients—namely, their trust in the company. The Ponemon Institute states that much of the damage from a data breach stems from the loss of customer trust in the company.

Though the average number of customers who vanish following a data breach came in at 4 percent, says the study, there are enterprises that see an average “customer churn” rate of 7 percent. While it may seem small, it will undoubtedly be noticeable when it comes to the bottom line,  and the healthcare and pharmaceutical industries are just the type to suffer this degree of loss.

So how can a company prepare to retain as many customers as possible following a data breach? Be prepared, and this preparation should include a way to stay level-headed.

One way to stay cool and collected is to avoid jumping the gun when the breach occurs, because if the business is too hasty at revealing the breach, the organization will have that much less time to respond in an efficient, optimal matter. Thus, take the time to consult with experts and gather all of the facts before reacting.

Cyber insurance is now booming, with about 50 carriers in the industry. An increasing number of companies have cyber insurance to protect against cyber crime. However, businesses claim it’s not easy to get adequate coverage.

Losses from data breaches are difficult to quantify. The tangible losses are more easily insured, says a New York Times online report. When it comes to a data breach, there are often related losses such as reputational damage and loss of customer loyalty that are harder to quantify.

Add to this the fact that underwriters don’t yet have sufficient data to estimate the likeliness or cost of an attack; most breaches get missed or aren’t reported publicly.

While an insurance company can tell you the precise odds of a major city office building burning down, nobody knows when the next giant retailer will be hacked. Statistics on hacking risks aren’t constant due to the continuous evolution of cyber crimes.

According to New York Times estimates, companies seeking coverage can only hope for, at best, a $300 million policy, peanuts compared to the billions devoted to property protection. Though this still sounds generous, the cost of a major breach can easily exceed it. Target’s situation is on course for just that, says the New York Times online article. The 2011 Sony breach has already exceeded $2 billion in fallout.

The best policies cover costs associated with alerting customers, plus forensics, call center setups, consumer identity monitoring, legal fees and a crisis management firm. But that may only dent the disaster. Policies don’t address loss in profits due to customers jumping ship. A policy can’t prevent a marred brand reputation. “Although a solid cyber policy will cover notification, crisis management expenses, defense costs, damages and the costs associated with regulatory action, it would not cover other, potentially much larger losses, such as reputational injury and loss of brand and market share,” says Roberta Anderson, an insurance coverage and cybersecurity attorney with the law firm of K&L Gates, LLP.  “Those losses are difficult to value and remain uninsurable in the market today.”

Expect the cyber insurance industry to continue swelling while cyber crime continues to remain several steps ahead of businesses and security systems.

Robert Siciliano is an Identity Theft Expert to AllClear ID. 

Cyber criminals go after brand names like vultures, infiltrating company websites, hijacking mobile applications and tainting online ads, among other tricks.

Some corporate websites aren’t as secure as business leaders think they are—and cyber thieves know this. They use the “watering hole” technique to infiltrate the system. Ever see an animal TV show in which the lions wait in the brush, camouflaged, for their unsuspecting prey to approach the lone body of water? You know the rest.

Think of the company’s website as the watering hole. The company typically uses “landing pages” to entice people to their main site, but leave the landing pages up after they’ve served their purpose. Here’s where trouble starts, fewer resources are devoted to monitoring or updating these pages, allowing hackers to pounce on the vulnerabilities and insert malicious code, luring visitors to malicious sites using the trusted reputation of the brand..

Ultimately, the brand name becomes associated with this. Some examples as reported by Forbes.com:

• The nbc.com home page was infected with the Citadel/Zeus installation malware.
• The U.S. Veterans of Foreign Wars’ website was infected with malware.
• Third-party app stores are a source of downloaded malware, since these are usually un-policed. Apps can be repackaged with mal-code, creating an association of bad with the brand name of that app. The mal-code could gather personal data on the purchaser, which is then sold to data brokers, violating user privacy, making the user think pretty negatively about the brand name.
• Malvertisements are malicious ads that crooks place on legit websites. These normal-appearing ads spread bad things around, and do NOT have to be clicked to trigger a viral attack.
• Banner ads can also be the target of injected mal-code.
• These clever crooks will even pose as an actual name-brand company and put up legitimate ads on a website, but then replace those with mal-ads over the weekend—which go undetected because IT departments are lax on the weekends. After oh, say, a few million computers and mobiles are infected, the thieves stick the original, legit ad back in, which makes their crime difficult to track.

Third-party networks place a lot of ads, making it very hard to hunt down malvertising fraud. This complexity can make it virtually impossible for companies to protect themselves against 100% of malicious attacks.

Consumers really get stiffed when there’s a data breach, having to change their passwords, replace credit cards, and other bothersome tasks, not to mention the grief over stolen personal information.

Healthcare organizations (a prime target of cyber criminals for several reasons) need to think beyond the approach of, “Here’s how we’re protecting your data,” and shift their way of thinking to, “We are dead serious about our customers’ security.”

This is how healthcare organizations can be truly proactive. While organizations can’t reveal too much information about their security plans (since this can make it easier for exploitation), they DO need to be generous with candid messages about how vital it is to protect consumer data.

Throwing around the same generic, recycled language about “Here’s what we’re doing to protect you” no longer cuts it and doesn’t build a lot of trust in the consumer. Instead, organizations should impress upon consumers their devotion to security in meaningful and understandable ways.

Consumer security should be free to the customer. This will delight consumers and help ease their anxieties over data safety, while setting the organization apart from its competitors. That’s how to put the brand’s reputation at the top and build customer loyalty.

Key Features of a solid customer security program

• Information must be protected at the time of sign-up/data collection, and protected should data be lost.
• Being accountable for a data recovery and restoration in the event of a breach; this will build customer loyalty.
• Financial loss must be recovered.
• Credit reports must be restored.

According to AllClear ID, here is how healthcare organizations can make an impression on their customers:

• Implementation of the most current IT practices should be done because it is paramount to secure mobile devices, access points, databases, cloud services, etc., and to better keep tabs on systems for breaches.
• The security of employees’ personal mobiles and the organization’s devices needs to be stronger.
• Employee training must be improved, from the bottom up, to reduce mistakes.
• HIPAA compliance needs to be reinforced.
• An identity protection plan must be created so that potential customers will have confidence in enrolling and feel less anxious about the fallout of a security breach.

Just about everyone has private information that should be protected. Let’s begin with something you’ve surely heard of: antivirus protection.

But this isn’t enough to guard your personal data. A free antivirus service may not even update automatically, and this is very important to keep up with rapidly evolving technology. Your protection is worth the fee for Antivirus, a firewall, antiphishing software and antispyware.

When’s the last time you updated your browser? Hackers love old, outdated browsers. After you finish this article, update your browser and set your computer to automatically download any future update.

The same goes with your operating system. Update!

Don’t miss out on encryption, which scrambles data so that prying eyes can’t make sense of it. Your computer might already have the feature of encrypting folders, files or the whole disk. If not, you can get a third-party encryption program for free.

If your computer were to crash right this instant, how much data would you lose? You shouldn’t lose much if every day you back your data up on an external drive. Another option is a cloud-based storage system, which is encrypted. The fee for that may be $100 annually or less.

We all know that 123qwe is such an easy password to remember, especially if it’s for all gazillion of your accounts. You know whom else finds this very convenient? Hackers!

If it’s easy for you, it’s easy for them! Every account should have a unique password, and if this is too dizzying, then use a password manager. And choose long passwords that include various characters and exclude words that can be found in a dictionary or successive numbers/letters on a keyboard.

That wireless connection of yours is great—for your neighbor if he decides to get a free ride, or even hack into your data. A WPA2 encryption built into the router will protect you. With public WiFi, use a virtual private network like Hotspot Shield.

Your smartphone also needs protection with all the tools mentioned above, and that includes a VPN.

Robert Siciliano is an identity theft expert to BestIDTheftCompanys.com discussing  identity theft prevention. 

Consumers are on red alert about sharing personal data with businesses, thanks to the widespread publicity of major data breaches. As a result, many consumers feel trapped when they know they must reveal personal information just to get basic quotes for healthcare services.

To get a quote, the potential customer must fork over a Social Security number and birthdate—enough information for a thief to use to commit fraud and identity theft.

Consumers feel as if there’s no escape: Data can be stolen at any point: over the landline phone or smartphone, on “trusted” websites, in servers … thieves are just waiting to pounce. So even though a potential (or current) customer has faith in an organization, the customer may be afraid of the pathways they must use to  interact with the organization.

Stolen healthcare information is a goldmine for cyber criminals. It’s big business. This means that protecting it is big business.

A way for healthcare organizations to set themselves apart from their competition is to put a big premium on caring about the customer’s data security. You can’t be nonchalant. You must create a striking impression of sincere concern.

Consumers need a lot more than just hearing how well you’ll reduce employee negligence, enforce HIPAA compliance and create methods of foiling cyber attacks.

Of course, consumers need assurance you’re doing the aforementioned tasks, but consumers also want to know what the healthcare organization will do in the event of a breach.

AllClear ID outlines the key strategies that will make a big impression on current and potential enrollees in a healthcare plan:

1. The most state-of-the-art IT practices must be brought on board so that all facets are secured, such as cloud services, computers and smartphones.
2. All levels of personnel must receive training to minimize errors and be able to comfortably discuss data security with customers
3. A stronger security system must be set in place for the business’s computers and the employees’ personal devices.
4. Adherence to HIPAA policies must be improved.
5. Potential customers must be made aware that the company offers an identity protection plan—as this will ease apprehension in the potential consumer.

Robert Siciliano is an Identity Theft Expert to AllClear ID. He is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen