You’ve Been Hacked! What Do You Do?

by Cooley LLP
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The inevitable has happened.

There is an oft-repeated saying in the information security world:  “There are two types of companies:  those that know they’ve been hacked and those that have yet to find out they’ve been hacked.”  No matter how many times it happens, however, people rarely get used to it.  While no one enjoys being the victim of a data breach, there are certain things that can be done to deal with such situations.

All is (hopefully) not lost.

Here are a few steps you should consider when dealing with an actual or potential data breach:

  1. Take your hands off your keyboard, put down the phone, then take a deep breath.
  2. Then, take another deep breath.  Often, problems crop up in the context of a data breach response as a result of people overreacting and prematurely taking steps to respond before they understand the full picture.
  3. Calmly contact the “infosec tiger team” within the organization (i.e., the identified individuals responsible for information security responses).  This should include legal, IT, communications, and security.
  4. Invoke and follow the Incident Response plan of the company.  This should include regular update calls and/or meetings.
  5. Work with the IT team to take steps to contain the breach.  This may include isolating systems, disabling affected services, suspending questionable accounts, and increasing physical security (provided that none of the above alters or destroys evidence).
  6. Determine the source of the intrusion (internal or external).  If external, determine what data may have been compromised.  Obtain the assistance of forensically trained consultants if appropriate.
  7. To the extent possible, identify all missing items and data.   Missing items may include not only laptops and desktop computers, but also flash drives, PDAs, mobile phones, iPods, and other portable media on which sensitive data was stored, as well as any hard copy data that may be missing.
  8. As to data, begin process immediately of identifying any data that was altered, accessed, or downloaded by the intruder.  If any payment card data (including debit and credit card data) was compromised, notify the acquiring bank or the processing contact for each payment card brand (as required by the payment card industry rules).
  9. Carefully document steps taken to contain, investigate, and respond to the security breach.
  10. Convene a meeting of all stakeholders to determine whether to notify applicable law enforcement authorities.
  11. Begin determining what notifications may be necessary and what contracts might be affected.

Next steps will be needed.

Once you have worked through the above list, additional tasks may be needed.  For example, depending on the data affected, data breach notification may be necessary.  An analysis of applicable state data breach laws will determine those states in which notification may be required. Similarly, contracts that contain provisions related to a data breach may require further analysis or notification.  Note that contract review may need to include not only customer/client contracts (where the company may have liability) but also contracts with third party service providers (who may be liable to the company for causing or contributing to the breach).

Recovery may be slow, but it does get better.

Many examples exist where companies have survived a data breach (and in some cases, they have thrived).  Keep in mind there may be follow-on issues involving regulatory authorities, contractual partners, and/or consumers.  In all cases, you should be prepared with a common narrative and set of talking points.  Though issues may still arise, the most important points are to remediate, recover, and then move forward.  You can do this!

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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