Guidelines for businesses to comply with the Maryland Personal Information Protection Act

What is the Personal Information Protection Act?:

As the crime of identity theft has grown, lawmakers have worked to protect consumers’ personal information from identity thieves. The Personal Information Protection Act (PIPA), Md. Code Ann. Comm. Law 14-3504 was enacted to make sure that Maryland consumers’ personal identifying information is reasonably protected, and if it is compromised, they are notified so that they can take steps to protect themselves. PIPA contains provisions for notification of consumers in the event of a data security breach and for reasonable security measures to protect consumers’ personal identifying information.

Components of the statute:

PIPA defines “Personal information” as an individual’s first and last name in combination with a: Social Security Number, Driver’s License Number, Financial Account Number or Individual Taxpayer Identification Number unless the information is encrypted, redacted or otherwise rendered unusable. A “security breach” is defined as the unauthorized acquisition of computerized data that compromises the security, confidentiality or integrity of personal information. If a business experiences a security breach where personal information that, combined, may pose a threat to a consumer if misused, that business must notify any affected consumers residing in Maryland. Once a security breach is detected, a business must conduct in good-faith a reasonable and prompt investigation to determine whether the information that has been compromised has been or is likely to be misused, i.e. for identity theft. If the investigation shows that there is a reasonable chance that the data will be misused, that business must notify the affected consumers.

In the event of a security breach, notice must be given to consumers as soon as reasonably practicable following the investigation. A business may delay notification if requested by a law enforcement agency or to determine the scope of the breach, identify all the affected individuals or restore the integrity of the system. Notice to affected consumer must be given in writing and sent to the most recent address of the individual, or by telephone to the most recent phone number. Notice may be sent via e-mail if an individual has already consented to receive electronic notice or the business primarily conducts its business via the Internet. The law also contains a provision for substitute notice, allowing a business to provide notice of a security breach by e-mail, posting on its website and notice to statewide media if the cost of notice would exceed $100,000 or the number of consumers to be notified exceeds 175,000 individuals.

The notice sent to consumer must include the following:

• Description of the information compromised.
• Contact information for the business, including a toll-free number if the business has one.
• Toll-free numbers and addresses for each of the three credit reporting agencies: Equifax, Experian and TransUnion.
• Toll-free numbers, addresses and Websites for the Federal Trade Commission (FTC) and the Office of the Attorney General (OAG).
• A statement that the individual can obtain information from these sources about steps to avoid identity theft.

Prior to sending notification to consumers, PIPA states that a business must notify the OAG. Include a brief description of the nature of the security breach, the number of Maryland residents being notified, what information has been compromised, and any steps the business is taking to restore the integrity of the system. Also attach a sample copy of the notice being sent to consumers and send to the OAG:

• By U.S. Mail:
  Office of the Attorney General
  Attn: Security Breach Notification
  200 St. Paul Place
  Baltimore, MD 21202
• By Fax:
  Attn: Security Breach Notification
  (410) 576-6566
• By E-mail:
  Idtheft@oag.state.md.us

Please direct any questions to Jeff Karberg, Administrator of the Identity Theft Program at (410) 576-6574.

When a business is destroying records that contain personal information, it must take reasonable steps to protect against unauthorized access to or use of the personal information. A business that owns or licenses personal information must implement and maintain reasonable security procedures and practices appropriate to nature of the personal information and nature and size of business. If a business uses a non-affiliated third party to perform services and discloses personal information to the third party, the contract must require the third party to implement and maintain reasonable security procedures (eff. 1/1/09)

If a business’ primary or functional regulator has rules, regulations or policies regarding protection of personal information and notice, and is in compliance with those rules, that business will be deemed to be in compliance with PIPA. Similarly, compliance with the Gramm-Leach-Bliley Act or other specified federal laws is deemed to be in compliance with Maryland law.

A violation of the Maryland Personal Protection Act is an unfair or deceptive trade practice as defined by the Maryland Consumer Protection Act.