The National Public Data Breach: Business, Employee and Service Provider Responsibilities

A recent breach involving National Public Data, a Florida company specializing in background checks and fraud prevention analysis, has businesses nationwide on high alert regarding the ripple effects of such devastating breaches. National Public Data gathers extensive data from sources, including public record databases, court records, and state and national repositories. It offers criminal records checks, vital record searches, and Social Security number traces. While most of this information is public, the hack raises serious concerns about what data providers should and shouldn't be sharing—and how risky it is to concentrate all this data in one place.

The Nature of the Breach: What Was Hacked?

National Public Data's business model involves acquiring data from various public sources to offer comprehensive background checks and fraud prevention services. Although much of this data is publicly accessible, the centralization of such data heightens the risk. When all this information is stored in one place, it becomes an attractive target for malicious hackers. While some details, like Social Security numbers, are public, they become significantly more valuable for identity theft when aggregated with other information.

Implications for Businesses and Workers

A breach of information handled by National Public Data could lead to significant legal, operational, and reputational challenges for businesses using its services. When data is aggregated into one centralized repository, a breach can result in the exfiltration of vast amounts of information all at once. The consequences can be severe:

• Operational Disruption: Organizations that rely on National Public Data for background checks and fraud protection may face service delays or inefficiencies as they work to fill operational gaps:
  
  
• Legal Challenges: Depending on the sensitivity of the compromised data, businesses may become involved in regulatory inquiries and face legal action initiated by state Attorneys General.
  
  
• Reputational Damage: Trust in a business's ability to secure vital data could be severely undermined, potentially leading to the loss of clients or partners.
  
  

Impact on Employees

For employees, the breach exposes sensitive personal information that can lead to identity theft, financial fraud, and other forms of personal harm. Social Security numbers and other personal details, when compromised, make individuals more vulnerable to fraudsters and identity thieves.

The Role of National Public Data

Given that much of the data handled by National Public Data is already publicly accessible, the key issues raised by this breach concern the company's responsibility in securing this data. The centralization of data imposes additional duties on National Public Data to ensure robust security measures are in place to prevent unauthorized access and data breaches. If it is proven that the company did not have adequate security measures or that negligence led to the breach, National Public Data may be held liable.
 
Transparency is crucial. National Public Data must be open about the risks inherent in their services and take full responsibility for the data they collect and store. They should communicate clearly with the businesses or individuals whose data was breached and outline the steps they are taking to remedy the situation.

Recourse for Businesses

In the aftermath of a data breach, businesses must navigate complex legal and operational landscapes:

• Legal Action: If a security breach occurred due to inadequate controls, businesses might pursue legal action against National Public Data or its officers. Relief could be sought for damages, including the costs associated with remediating the breach, legal fees, and any regulatory fines.
  
  
• Insurance Claims: Companies with cybersecurity insurance may file claims to offset the costs related to the breach, such as notifying affected employees and providing credit monitoring services.
  
  

The Path Ahead: Guarding Businesses and Individuals

The National Public Data breach underscores the need for businesses and individuals to take proactive measures to protect their data:

• Update and Fortify Contracts: Ensure contracts with third-party providers like National Public Data include strong data protection clauses, clear liability terms, and indemnification provisions.
  
  
• Improve Security Measures: Review and strengthen data protection procedures with third-party services and within your own organization. Implement strict access controls, encryption, and continuous monitoring to prevent future violations.
  
  
• Prepare for Breach Response: Develop a strategic security plan that outlines how to inform impacted parties, offer support (such as credit monitoring), and manage legal actions in the event of a breach.
  
  
• Transparent Communication: In the event of a breach, it is critical to communicate transparently with both employees and customers. Clearly explain what happened, how their data might have been compromised, and what steps are being taken to secure their information in the future.
  
  

The National Public Data breach serves as a stark reminder of the responsibilities that come with aggregating and storing public data. While much of this information is already public, its centralization makes it a more attractive target for cybercriminals. By understanding these responsibilities and implementing preventive measures, businesses can better protect themselves and the individuals whose data they handle.

Is your business in need of a cyber security strategy or needs assistance with compliance? Book time to meet with one of our experts to see how iCorps can help!