End of year wrap

The year started with a meltdown. Literally.

New Year’s Eve hangovers had barely cleared when security researchers announced they had discovered security flaws that would impact “virtually every user of a personal computer”. “Happy new year” to you too. Dubbed “Meltdown” and “Spectre”, the flaws in popular computer processors would allow hackers to access sensitive information from memory – certainly no small thing. Chipmakers urgently released updates. Users were urged to patch. Fortunately, the sky didn’t fall in.

If all this was meant to jolt us into taking notice of data security and privacy in 2018 … well, that seemed unnecessary. With formidable new data protection regulations coming into force, many organisations were already stepping into this year with a much sharper focus on digital risk.

The first of these new regulatory regimes took effect in February, when Australia finally introduced mandatory data breach reporting. Under the Notifiable Data Breaches (NDB) scheme, overseen by the Office of the Australian Information Commissioner, applicable organisations must now disclose any breaches of personal information likely to result in serious harm.

In May, the world also welcomed the EU’s General Data Protection Regulation (GDPR). Kind of hard to miss, with an onslaught of updated privacy policies flooding user inboxes from companies keen to show compliance.

The promise of GDPR is to increase consumers’ consent and control over their data and place a greater emphasis on transparency.  Its extra-territorial nature (GDPR applies to any organisation servicing customers based in Europe) meant companies all around the world worked fast to comply, updating privacy policies, implementing privacy by design and creating data breach response plans. A nice reward for these proactive companies was evidence that GDPR is emerging as a template for new privacy regulations around the world. GDPR-compliance gets you ahead of the game.

With these regimes in place, anticipation built around who would be first to test them out. For the local NDB scheme, the honour fell to PageUp. In May, the Australian HR service company detected an unknown attacker had gained access to job applicants’ personal details and usernames and passwords of PageUp employees.

It wasn’t the first breach reported under NDB but was arguably the first big one – not least because of who else it dragged into the fray. It was a veritable who’s who of big Aussie brands – Commonwealth Bank, Australia Post, Coles, Telstra and Jetstar, to name a few. For these PageUp clients, their own data had been caught up in a breach of a service provider, shining a bright light on what could be the security lesson of 2018: manage your supplier risks.

By July we were all bouncing off the walls. Commencement of the My Health Record (MHR) three month opt-out period heralded an almighty nationwide brouhaha. The scheme’s privacy provisions came under heavy fire, most particularly the fact the scheme was opt-out by default, loose provisions around law enforcement access to health records, and a lack of faith in how well-versed those accessing the records were in good privacy and security practices. Things unravelled so much that the Prime Minister had to step in, momentarily taking a break from more important national duties such as fighting those coming for his job.

Amendments to the MHR legislation were eventually passed (addressing some, but not all of these issues), but not before public trust in the project was severely tarnished. MHR stands as a stark lesson for any organisation delivering major projects and transformations – proactively managing the privacy and security risks is critical to success.

If not enough attention was given to data concerns in the design of MHR, security considerations thoroughly dominated the conversation about another national-level digital project – the build out of Australia’s 5G networks. After months of speculation, the Australian government in August banned Chinese telecommunications company Huawei from taking part in the 5G rollout, citing national security concerns. Despite multiple assurances from the company about its independence from the Chinese government and offers of greater oversight, Australia still said ‘no way’ to Huawei.

China responded frostily. Some now fear we’re in the early stages of a tech cold war in which retaliatory bans and invasive security provisions will be levelled at western businesses by China (where local cyber security laws should already be a concern for businesses with operations in China).

Putting aside the geopolitical ramifications, the sobering reminder for any business from the Huwaei ban is the heightened concern about supply chain risks. With supply chain attacks on the rise, managing vendor and third-party security risks requires the same energy as attending to risks in your own infrastructure.

Ask Facebook. A lax attitude towards its third-party partners brought the social media giant intense pain in 2018. The Cambridge Analytica scandal proved to be one of the most egregious misuses of data and abuses of user trust in recent memory, with the data of almost 90 million Facebook users harvested by a data mining company to influence elections. The global public reacted furiously. Many users would delete their Facebook accounts in anger. Schadenfreude enthusiasts had much to feast on when Facebook founder and CEO Mark Zuckerberg’s uncomfortably testified in front of the US Senate.

The social network would find itself under the pump on various privacy and security issues throughout 2018, including the millions of fake accounts on its platform, the high profile departure of security chief Alex Stamos and news of further data breaches.

But when it came to brands battling breaches, Facebook hardly went it alone in 2018. In the first full reporting quarter after the commencement of the NDB scheme, the OAIC received 242 data breach notifications, followed by 245 notifications for the subsequent quarter.

The scale of global data breaches has been eye-watering. Breaches involving Marriott International, Exactis, Aadhar and Quora all eclipsed 100 million affected customers.

With breaches on the rise, it becomes ever more important that businesses be well prepared to respond. The maxim that organisations will increasingly be judged not on the fact they had a breach, but on how they respond, grew strong legs this year.

But we needn’t succumb to defeatism. Passionate security and privacy communities continue to try to reduce the likelihood or impact of breaches and other cyber incidents. Technologies and solutions useful in mitigating common threats gained traction. For instance, multi-factor authentication had more moments in the sun this year, not least because we became more attuned to the flimsiness of relying on passwords alone (thanks Ye!). Security solutions supporting other key digital trends also continue to gain favour – tools like Cloud Access Security Brokers enjoyed strong momentum this year as businesses look to manage the risks of moving towards cloud.

Even finger-pointing was deployed in the fight against hackers. This year, the Australian government and its allies began to publicly attribute a number of major cyber campaigns to state-sponsored actors. A gentle step towards deterrence, the attributions signalled a more overt and more public pro-security posture from the Government. Regrettably, some of this good work may have been undone late in the year with the passage of an “encryption bill”, seen by many as weakening the security of the overall digital ecosystem and damaging to local technology companies.

In many ways, in 2018 we were given the chance to step into a more mature conversation about digital risk and the challenges of data protection, privacy and cyber security. Sensationalist FUD in earlier years about cyber-attacks or crippling GDPR compliance largely gave way to a more pragmatic acceptance of the likelihood of breaches, high public expectations and the need to be well prepared to respond and protect customers.

At a strategic level, a more mature and business-aligned approach is also evident. Both the Australian government and US governments introduced initiatives that emphasise the value of a risk-based approach to cyber security, which is also taking hold in the private sector. The discipline of cyber risk management is helping security executives better understand their security posture and have more engaging conversations with their boards.

All this progress, and we still have the grand promise that AI and blockchain will one day solve all our problems.  Maybe in 2019 ….

Till then, we wish you a happy festive season and a great new year.

From the team at elevenM.

Introducing our free data breach notification tool

When we previously looked at the trends emerging from the mandatory notifiable data breaches scheme, we observed that organisations seem to be playing it safe and reporting when in doubt, possibly leading to overreporting.

We’re big supporters of mandatory notification, and we agree that when there’s doubt, it’s safer to report. But we also think it’s important that we all get better at understanding and managing data breaches, so that individuals and organisations don’t become overwhelmed by notifications.

That’s why we’ve prepared a free, fast and simple tool to help you consider all of the relevant matters when deciding whether a data breach needs to be notified.

Download here

Keep in mind that this is just a summary of relevant considerations – it’s not legal advice, and it only addresses Australian requirements. If your organisation handles personal information or personal data outside of Australia, you might need to consider the notification obligations in other jurisdictions.

Also remember that notification is just one aspect of a comprehensive data breach response plan. If your organisation handles personal information, you should consider adopting a holistic plan for identifying, mitigating and managing data breaches and other incidents.

Please let us know if you find this tool useful or if you any feedback or suggestions.


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Don’t call me, I’ll call you

You’ve just pulled dinner out of the oven, the kids have been wrangled to the table, and you’re just about to sit down.

Suddenly, your miracle of domestic logistics is shattered by the klaxon  of your phone ringing. Juggling a hot plate of roast chicken and a small, wriggling child, you grab for the handset… only to be greeted by the forced enthusiasm of a long-suffering call centre worker who desperately wants you to tell you about simply fantastic savings on energy prices.

The Do Not Call Register has been in place since 2006. The DNCR Register allows Australians to place their phone number on a register indicating that they don’t wish to receive marketing calls or faxes, with fines applying for non-compliance.

The ACMA enables to organisations that want to conduct telemarketing campaigns subscribe to the Register and  ‘wash’ their calls lists against it. This helps organisation make sure they aren’t calling people who don’t want to hear from them.

Of course, that doesn’t help if you don’t bother to check the Register in the first place, like Lead My Way. Lead My Way received a record civil penalty of $285,600 today for making marketing calls to numbers on the DNCR Register. Lead My Way had actually subscribed to the DNCR Register, but for some reason hadn’t washed their call list against it. This led to numerous complaints to the ACMA, which commenced an investigation.

Lead My Way was calling people to test their interest in its clients’ products or services, then on selling that information as ‘leads’ – that is, as prospective customers. This kind of business model can also raise significant Privacy Act compliance issues. Do the people being called understand that their personal information is collected and will be sold? How are they notified of the collection (APP 5)? Have they consented to that use? Is that consent informed and valid? Is the sale of their personal information permissible (APP 6)? Are they able to opt out of receiving further marketing calls, and are those opt outs being respected (APP 7)?

Cutting corners on how you manage and use personal information may save you time and money in the short term. But, as Lead My Way discovered, in the long run it can create massive compliance risk, annoy your end users, and incur the wrath of the regulators. Were the (likely minuscule) savings of ignoring the DNCR Register worth a regulator investigation and the comprehensive trashing of Lead My Way’s brand?

Perhaps we should call them and ask.


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Musings on the OAIC’s second Notifiable Data Breaches report

On 31 July, the Office of the Australian Information Commissioner (OAIC) released its second Notifiable Data Breaches Quarterly Statistics Report.

This report covers the first full quarter since the Notifiable Data Breaches scheme (NDB scheme) began on 22 February 2018, and the OAIC has clearly put some work into building out the report with detailed stats and breakdowns. Let’s take a look.

Going up, up, up!

This quarter there were 242 notifications overall, noting that multiple notifications relating to the same incident (including the infamous PageUp breach) were counted as a single breach.

The OAIC’s month by month breakdown shows a steady increase in notifications by month, going from 55 notifications in March to 90 notifications in June. Overall, accounting for the partial quarter in the first report, we’ve seen a doubling in the rate of notifications.

However, there are a lot of factors that may be affecting the notification rate. Since February, many companies and agencies have implemented new processes to make sure they comply with the NDB scheme, and this may be driving more notifications. On the other hand, in our experience a lot of companies and agencies are still unsure about their notification obligations and when to notify, so they might be over reporting – notifying breaches that may not meet the ‘likely risk of serious harm’ threshold just to be sure that they are limiting their compliance risk.

At this early stage of the scheme, we think it’s premature to draw any conclusions on rising notification rates. The rate may change significantly as companies and agencies come to grips with their obligations and what does and doesn’t need to be reported.

Teach your children staff well

59% of breaches this quarter were identified as being caused by malicious or criminal attacks. The vast majority (68%) of attacks were cyber incidents and, of those, over three quarters related to lost or stolen credentials. This includes attacks based on phishing, malware, and social engineering. Brute force attacks also featured significantly.

We think that the obvious conclusion here is that there’s an opportunity to significantly reduce the attack surface by training your staff to better protect their credentials. For example, teach them how to recognise phishing attempts, run drills, and enforce regular password changes.

There are also some system issues that could be addressed, such as multi-factor authentication, enforcing complex password requirements, and implementing rate limiting on credential submissions to prevent brute force attacks.

To err is human

Human error accounted for 36% of breaches this quarter. It was the leading cause in the first quarterly report, but again, there are a number of factors that could have caused this shift.

Notably, over half of the breaches caused by human error were scenarios in which personal information was sent to the wrong person – by email, mail, post, messenger pigeon or what have you, but especially email (29 notifications). Again, this suggests a prime opportunity to reduce your risk by training your staff. For example, it appears that at least 7 people this quarter didn’t know (or forgot) how to use the BCC/Blind Carbon Copy function in their email.

People make mistakes. And we know this, so it’s a known risk. We should be designing processes and systems to limit that risk, such as systems to prevent mistakes in addressing.

Doctors and bankers and super, oh my!

Much ink has been spilt over information governance in the health and finance sectors recently, and those sectors accounted for more notifications than any other this quarter (49 and 36 notifications respectively). These are pretty massive industry sectors – healthcare alone accounts for 13.5% of jobs in Australia – so scale is likely affecting the high number of notifications. Anyway, the OAIC has helpfully provided industry level breakdowns for each of them.

In the finance sector (including superannuation providers), human error accounted for 50% of all breaches, and malicious attacks for 47%. Interestingly, in the finance sector almost all the malicious attacks were based on lost or stolen credentials, so we’re back to staff training as a key step to reduce risk.

Bucking the trend, human error accounted for almost two thirds of breaches in the health sector – clearly there’s some work to be done in that sector in terms of processes and staff training. Of the breaches caused by the malicious attacks, 45% were theft of physical documents or devices. This isn’t particularly surprising, as it can be challenging for small medical practices that make up a large part of the sector to provide high levels of physical security. It’s important to note that these notifications only came from private health care providers – public providers are covered under state-based privacy legislation. Also, these statistics don’t cover notifications relating to the My Health Records system – the OAIC reports on those numbers separately in its annual report. So these stats don’t offer a full picture of the Australian health industry as a whole.

All in all, this quarter’s NDB scheme report contains some interesting insights, but as agencies and organisations become more familiar with the scheme (and continue to build their privacy maturity), we may see things shift a bit. Only time will tell.


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