How to Notify Customers About a Data Breach

In today’s digital age, businesses collect, store, and manage a vast amount of sensitive information. Whether it’s personal details, financial data, or transaction histories, ensuring the security of this information is critical. However, despite best efforts, data breaches can happen, and when they do, it’s essential to respond swiftly and appropriately. One of the most important steps you can take is notifying affected customers about the breach in a clear and transparent manner.

The Importance of Timely Notification

When a data breach occurs, it is crucial to act quickly. Depending on the severity of the breach and local regulations, businesses may have a limited timeframe to inform customers—often within 30 days. Prompt notification allows customers to take necessary steps to protect themselves from potential harm, such as fraud or identity theft.

Why is this important?

1. Compliance with Legal Requirements: Many jurisdictions have laws that require businesses to notify customers within a certain period after a breach. Failing to comply with these laws can result in fines or legal consequences.
2. Maintaining Customer Trust: Transparency during a breach is vital. Customers appreciate being informed about what happened, how it affects them, and what the company is doing to prevent future incidents.
3. Minimizing Risk: Notifying customers enables them to monitor their accounts and take precautionary steps, reducing the risk of further damage, such as unauthorized transactions or identity theft.

Key Components of a Data Breach Notification Letter

A well-crafted notification letter is a crucial part of managing the fallout from a data breach. Below are the key elements that should be included in the letter:

1. Clear and Concise Subject Line

Start with a subject line that clearly indicates the nature of the communication. For example, “Important Notice: Data Breach Affecting Your Account.”

2. Opening Statement

The first sentence should directly address the issue. For example: “Dear [Customer Name], we are writing to inform you of a data breach that may have compromised your personal information.”

3. Description of the Breach

Clearly explain the nature of the breach, including:

• What happened: Describe the breach in simple terms. Did hackers gain access to your systems? Was sensitive data exposed?
• When it occurred: Include the date or approximate timeline of when the breach took place.
• What information was affected: Identify what data may have been compromised (e.g., names, addresses, payment details, Social Security numbers).

4. Steps Taken to Address the Issue

Explain the actions your business is taking to mitigate the damage and prevent future breaches. For example:

• Immediate steps taken to secure the system.
• Investigations conducted by cybersecurity experts.
• Enhanced security measures implemented moving forward.

5. Impact on Customers

Acknowledge how the breach may affect your customers and the potential risks involved, such as:

• Unauthorized use of personal information.
• Increased likelihood of phishing attacks or scams targeting the affected individuals.
• Fraudulent charges on accounts.

6. What Customers Should Do

Provide clear, actionable steps customers can take to protect themselves. These might include:

• Monitoring their accounts for suspicious activity.
• Changing passwords and enabling two-factor authentication.
• Reviewing credit reports and freezing credit if necessary.
• Reporting any suspicious activity to your company or relevant authorities.

7. Offer Support

Let customers know that they can reach out for assistance or further information. Provide a dedicated phone number or email address for inquiries. If you are offering credit monitoring services, identity theft protection, or other forms of compensation, mention them here.

8. Apology and Assurance

End with a sincere apology and a reassurance that you are taking the situation seriously. For example: “We sincerely apologize for this incident and the concerns it may cause. We are fully committed to safeguarding your personal information and ensuring that this type of breach does not occur in the future.”

9. Closing Statement

Conclude the letter with a professional and courteous sign-off. Example: “Thank you for your understanding and continued trust in our company. Should you have any questions or concerns, please do not hesitate to contact us.”

Sample Data Breach Notification Letter

Dear [NAME]:

We are writing to tell you about an incident involving our vendor, [COMPANY NAME] that may have impacted the information of [NAME OF INDIVIDUAL IMPACTED].  We are sending you this correspondence to tell you what happened, what information was involved, what we have done, and what you can do to address this situation.

WHAT HAPPENED. On [DATE], [COMPANY] learned of an issue impacting [COMPANY] and began an investigation and took steps to secure the product and ensure the overall security of its environment. Their investigation revealed [HIGH LEVEL BRIEF DESCRIPTION OF WHAT OCCURRED]

WHAT INFORMATION WAS INVOLVED. You are receiving this notice because the information of [CLIENT NAME] was involved in the breach and therefore, the unknown third party may have been able to access the affected individual’s information. We have determined that the personal information involved in this incident may have included [WHAT INFORMATION WAS INCLUDED IN THE BREACH].

WHAT WE ARE DOING. [COMPANY NAME] engaged external cybersecurity specialists to determine the full nature and scope of the incident, identify any impacted information, and help them enhance their security controls to mitigate the risk of future security incidents. They also notified federal law enforcement of the incident. We have been simultaneously investigating this matter and working to ensure all our data maintained by them remains secure and that appropriate safeguards are put in place to ensure confidentiality and privacy of our patients’ data.

WHAT YOU CAN DO. Consistent with certain laws, we are providing you with the following information about steps that a consumer can take to protect against potential misuse of personal information.

You should always remain vigilant for incidents of fraud and identity theft, including by regularly reviewing your account statements and monitoring credit reports. If you discover any suspicious or unusual activity on your accounts or suspect identity theft or fraud, be sure to report it immediately to your financial institutions.

In addition, you may contact the Federal Trade Commission (“FTC”) or law enforcement, including your state Attorney General, to report incidents of identity theft or to learn about steps you can take to protect yourself from identity theft. To learn more, you can go to the FTC’s website at www.ftc.gov/idtheft, or call the FTC at (877) IDTHEFT (438-4338) or write to Federal Trade Commission, Consumer Response Center, 600 Pennsylvania Avenue, NW, Washington, DC 20580.

You may also periodically obtain credit reports from the nationwide credit reporting agencies. If you discover information on your credit report arising from a fraudulent transaction, you should request that the credit reporting agency delete that information from your credit report file. In addition, under federal law, you are entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting agencies. You may obtain a free copy of your credit report by going to www.AnnualCreditReport.com or by calling (877) 322-8228. You may contact the nationwide credit reporting agencies at:

Equifax

(800) 685-1111

P.O. Box 740241

Atlanta, GA 30374-0241 www.Equifax.com

Experian

(888) 397-3742

P.O. Box 9701

Allen, TX 75013 www.Experian.com

TransUnion (800) 680-7289

Fraud Victim Assistance Department

P.O. Box 2000

Chester, PA 19022-2000 www.TransUnion.com

You also have other rights under the Fair Credit Reporting Act (“FCRA”). For information about your rights under the FCRA, please visit: https://files.consumerfinance.gov/f/201504_cfpb_summary_your-rights-under-fcra.pdf.

In addition, you may obtain additional information from the FTC and the credit reporting agencies about fraud alerts and security freezes. You can add a fraud alert to your credit report file to help protect your credit information. A fraud alert can make it more difficult for someone to get credit in your name because it tells creditors to follow certain procedures to verify your identity. You may place a fraud alert in your file by calling any of the nationwide credit reporting agencies listed above. As soon as that agency processes your fraud alert, it will notify the other two agencies, which then must also place fraud alerts in your file.