by Attorney Eric D. PuryearUnder Illinois law, a business that collects personal information of Illinois residents has certain duties to inform affected people in the event of a breach, under 815 ILCS 530/10:
(a) Any data collector that owns or licenses personal information concerning an Illinois resident shall notify the resident at no charge that there has been a breach of the security of the system data following discovery or notification of the breach. The disclosure notification shall be made in the most expedient time possible and without unreasonable delay, consistent with any measures necessary to determine the scope of the breach and restore the reasonable integrity, security, and confidentiality of the data system. The disclosure notification to an Illinois resident shall include, but need not be limited to, (i) the toll-free numbers and addresses for consumer reporting agencies, (ii) the toll-free number, address, and website address for the Federal Trade Commission, and (iii) a statement that the individual can obtain information from these sources about fraud alerts and security freezes. The notification shall not, however, include information concerning the number of Illinois residents affected by the breach.
(b) Any data collector that maintains or stores, but does not own or license, computerized data that includes personal information that the data collector does not own or license shall notify the owner or licensee of the information of any breach of the security of the data immediately following discovery, if the personal information was, or is reasonably believed to have been, acquired by an unauthorized person. In addition to providing such notification to the owner or licensee, the data collector shall cooperate with the owner or licensee in matters relating to the breach. That cooperation shall include, but need not be limited to, (i) informing the owner or licensee of the breach, including giving notice of the date or approximate date of the breach and the nature of the breach, and (ii) informing the owner or licensee of any steps the data collector has taken or plans to take relating to the breach. The data collector’s cooperation shall not, however, be deemed to require either the disclosure of confidential business information or trade secrets or the notification of an Illinois resident who may have been affected by the breach.
(b-5) The notification to an Illinois resident required by subsection (a) of this Section may be delayed if an appropriate law enforcement agency determines that notification will interfere with a criminal investigation and provides the data collector with a written request for the delay. However, the data collector must notify the Illinois resident as soon as notification will no longer interfere with the investigation.
(c) For purposes of this Section, notice to consumers may be provided by one of the following methods:
(1) written notice;
(2) electronic notice, if the notice provided is consistent with the provisions regarding electronic records and signatures for notices legally required to be in writing as set forth in Section 7001 of Title 15 of the United States Code; or
(3) substitute notice, if the data collector demonstrates that the cost of providing notice would exceed $250,000 or that the affected class of subject persons to be notified exceeds 500,000, or the data collector does not have sufficient contact information. Substitute notice shall consist of all of the following: (i) email notice if the data collector has an email address for the subject persons; (ii) conspicuous posting of the notice on the data collector’s web site page if the data collector maintains one; and (iii) notification to major statewide media.
(d) Notwithstanding any other subsection in this Section, a data collector that maintains its own notification procedures as part of an information security policy for the treatment of personal information and is otherwise consistent with the timing requirements of this Act, shall be deemed in compliance with the notification requirements of this Section if the data collector notifies subject persons in accordance with its policies in the event of a breach of the security of the system data.
A failure to provide notification is defined by 815 ILCS 530/20 as “an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act” and can subject a company to significant penalties.
In addition to the cost of notification, a business that suffers a breach can see significant harm done to its reputation. As such, wise business owners will carefully consider the legal and technical aspects of their storage of personal information in Illinois, so as to limit potential harm and liability.