A report released by the California Office of the Attorney General on Tuesday shows that the number of residents affected by data breaches in 2013 increased considerably compared to the previous year.
The second annual data breach report shows that a total of 167 incidents involving more than 500 individuals were reported to the California Attorney General last year. The breaches affected a total of 18.5 million Californians, which represents a 600% increase compared to 2012, when the number of victims was 2.5 million.
This sharp increase is caused by the data breaches suffered by the retailer Target, in which the payment card data of over 40 million individuals was compromised, and the online marketplace LivingSocial. If these two incidents were excluded, the number of affected residents would drop to 3.5 million, which still represents a 35% increase compared to the previous year, the report shows.
More than a quarter of the breaches reported last year to the Office of the Attorney General affected the retail industry, which is accountable for 84% of the compromised personal information records (15.4 million records). The finance and insurance sector reported 33 incidents, while the healthcare sector reported 25 breaches.
A total of 53% of all breaches were a result of cyberattacks (hacking and malware), while the rest were caused by the physical loss or theft of devices containing unencrypted information (26%), unintentional errors (18%), and malicious insiders (4%).
“Data breaches pose a serious threat to the privacy, finances and personal security of California consumers,” said Attorney General Kamala D. Harris. “The fight against these kind of cybercrimes requires the use of innovative strategies by government and the private sector to protect our state’s consumers and businesses. I strongly encourage more use of encryption to significantly reduce the risk of data breaches.”
The report also provides recommendations for consumers, retailers and the healthcare industry on preventing data breaches and minimizing their impact. The Attorney General also advises lawmakers to consider legislation to provide funding for small retailers to upgrade their systems, and make some changes to the current breach notice law.
California was the first U.S. state to introduce a law requiring organizations to notify people whose personal information was compromised in a security breach. It’s also the first state to require businesses and state agencies to report breaches involving over 500 individuals to the Attorney General’s office.
The complete 2014 California Data Breach Report is available online.