Privacy compliance and data breach risk management is too often not taken seriously by Australian organisations. The complexity of organisational structures and IT business systems in many instances results in management not knowing what data is collected by whole of business and how the data is managed. Privacy policies often do not accurately reflect how the organisation manages personal information, that is:
- The kind of personal information that the organisation collects and holds;
- How the organisation collects and holds the personal information;
- The purpose for which the organisation collects, holds uses and discloses personal information;
- Whether the personal information is likely to be disclosed to an overseas recipient and where that recipient is located;
- How individuals can access information about them and seek correction or lodge a complaint about a breach.
Data breaches can have significant impact on the businesses and result in
- Business disruption
- Significant costs in responding to a data breach
- Reputational damage
- Loss of valuable intellectual property/confidential information
- Loss of business and revenue
- Reduction in capital/share value of the business
- Substantial costs in regaining consumer confidence that the organisation can be trusted with personal information/data
- Regulatory fines
- Compensation claims by individuals/class actions.
OAIC Data Breach Statistics
The Notifiable Data Breach (NDB) scheme under the Australian Privacy Act commenced on the 22 February 2018. The scheme requires mandatory notification by organisations of a privacy data breach that is likely to result in “serious harm” to the individual whose personal information held by that organisation has been the subject of an unauthorised access, disclosure of or loss of personal information held by the entity[i].
The Office of the Australian Information Commissioner (OAIC), which is responsible for compliance with the NDB scheme, has now published its Notifiable Data Breaches Scheme 12-month Insights Report[ii] for the NDB scheme’s first full year in operation – from 1 April, 2018 to 31 March 2019.
The OAIC Report provides statistics of notifiable data breaches together with valuable insights and learnings on the trends emerging under the NDB scheme. . These statistics also provide very useful information for the risk assessment and potential organisational exposure to data breaches.
During the first 12 months from 1 April, 2018 to 31 March 2019 the OAIC received 964 notifications of eligible data breaches under the NDB scheme. Overall, there has been a 712% increase in the number of data breach notifications, compared to the previous 12 month period under the voluntary scheme.
Whilst the majority of breaches during the period affected fewer than 1000 people (83%), there were 3 data breach notifications which affected over 1 million individuals.
Other key findings and trends to emerge during this 12 month period include:-
- During this period, the top two (2) data breach reporting sectors (under the NDB scheme) were Health service providers and Finance – followed by Legal/Accounting/Management services, Education, and Personal Service providers.
- Malicious or criminal attacks and human error were the cause of the majority of the reported breaches .
- Malicious or criminal attacks accounted for 60% of the data breaches while human error accounted for 35% of them.
- Most of the malicious or criminal attacks were cyber incidents such as compromised or stolen credentials (28%) and phishing ( (153 notifications)
The majority of data breaches consistently involved human error or cyber incidents involving human factors such as clicking on a phishing email (153 notifications) or disclosing a password, which could be avoided by staff awareness and training.
Human error was consistently the second largest source of data breaches during the first full 12 months of the NDB scheme (35%) This is also consistent with the international trend. The major sources of human error include:
- Personal information sent by email or mail to the wrong recipient.
- Unauthorised disclosure (unintended release or publication or failure to redact)
- Loss of paperwork/data store device
- Failure to BCC when sending emails
- Insecure disposal
In many cases unauthorised disclosure of confidential information or data occurs because employees do not have an adequate understanding of the type of data/information that is protected under the Privacy Act and other laws for the protection of confidential information/data and the organisation’s obligations under those laws in relation to data protection from unauthorised disclosure, use and loss.
Many of the human error data breaches can be avoided by appropriate ongoing staff training in data protection and privacy compliance and handling of information.
Minimising Risk of Data Breaches – Steps to Assist in Data Protection
There is no single solution for the protection of data and compliance with data protection laws. A whole of business approach is required. People are the most important part of the process and solution, followed by technology. Safeguards against unauthorised use, disclosure, theft, cyberattacks, industrial espionage and sabotage of IT system have to be agile and updated to deal with increasing sophistication of cyberattacks or cyber incidents.
Some steps that Organisations may consider taking to minimise risk and harm and to protect confidential information/data:
- Understand what type of data including confidential information and personal and sensitive information is collected and managed by the organisation and who is authorised to access this information. An audit of the organisational data collection and flow may be required. Legal advice may also be required
- Undertake ongoing reviews and assessments of the organisational and technological data flows and risks.
- Have all staff sign non-disclosure/confidentiality agreements and provide appropriate training.
- Implement and update appropriate security measures for the protection of confidential information/data including encryption, password protection, multi-facet authentication and monitoring data flows.
- Have a cybersecurity expert assess and monitor your computer system for potential vulnerabilities to cyberattacks and implement appropriate measures to deal with risks.
- Implement and update appropriate technological measures to deal with possible cyber threats including viruses, ransomware, malware, hacking and other cyberattacks.
- Develop and implement guidelines for ‘best practice’ post-breach communication to affected individuals for reduction of ‘harm’ to both the affected individuals and the entity;
- Keep up to date in relation to the latest scams and cyber threats including phishing emails and telephone calls requesting passwords and other personal information and keep management and employees updated. Useful resources for such updates include:
- Stay Smart Online – an online alert service which provides alerts on the latest threats and information on how to reduce the risk of cyber threats
- ACCC Scam watch
- Australian Cyber Security Centre (ACSC)
- Australian Cybercrime Online Reporting Network (Acorn)
- Education and training of management and employees – including on:-
- data handling practices;
- how to report suspected privacy breaches; and
- how to communicate a data breach to affected individuals – to minimise harm to the entity and the affected individuals
Authored by Katarina Klaric, Principal, Stephens Lawyers & Consultants. The contribution of Rochina Iannella is acknowledged in the research and update of this Information Sheet.
© Stephens Lawyers & Consultants. 3 October 2018 – Updated May 2019
This Information Sheet is not intended to be a substitute for obtaining legal advice.
For further information contact:
Stephens Lawyers & Consultants
Suite 205, 546 Collins Street
Melbourne VIC 3000
Phone: (03) 8636 9100
Fax: (03) 8636 9199
All Correspondence to:
PO Box 16010
Collins Street West
Melbourne VIC 8007
[i] Privacy Act 1988(Cth) s 26 WE(2)
[ii] Office of the Australian Information Commissioner Notifiable Data Breaches Scheme 12-month Insights Report