Updated: Mar 6
The New York Legislature recently passed the Stop Hacks and Improve Electronic Data Security (SHIELD) Act in response to New York consumers’ growing concern regarding the protection of their personal consumer data by requiring companies to have “reasonable data security protections, while being careful to avoid excessive costs to small business and without imposing duplicate obligations under federal or state data security regulations,” according to the bill.
In simpler terms, SHIELD protects consumers by broadening what constitutes as a breach, requiring companies to implement stronger security measures, imposing stricter penalties on companies that suffer cyberattacks, and giving consumers greater transparency into how their personal data is protected.
First proposed shortly after the Equifax data breach in 2017, which affected 150 million consumers, SHIELD has undergone many revisions.
SHIELD Key Points
Qualifies biometric data, email addresses, passwords and security questions within the legal definition of data
Adds unauthorized viewing and copying of data to the definition of a data breach
Makes it mandatory for companies to include expanded consumer data protection as part of their security solution
Requires that any person or enterprise affected by the breach must be notified
Entities that fall under certain data security requirements, including the Gramm-Leach-Bliley Act (GLBA) or Health Insurance Portability and Accountability Act (HIPAA) are not regulated under SHIELD.
Companies that fail to adopt and maintain reasonable safeguards on behalf of New York residents, via the SHIELD Act, can face civil action from the New York Attorney General’s Office, including monetary penalties. Individual residents’ private right of action to sue companies is not covered under SHIELD.
Are You Protected? How Do You Know?
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Comparison data for your organization versus industry peers
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