Personal details of customers enter the public domain, with credit card numbers exposed. Not only have you lost your most valuable commercial asset but your company could face legal action, both under privacy legislation and from claims of negligence and failure in your duty of care. Hackers breached the security into the company's online database and 450,000 credit card numbers were posted publicly on a government website. The US Government is now considering action. While most businesses have a host of data protection measures, data crime is developing more rapidly than the security measures designed to repel it.
Breaches can and do occur.
The scenario gets even murkier here. What the act does legislate on is the obligation of those possessing private data to keep it secure. This means that companies, even though they are the victims of a security crime, are technically liable for loss of data. Dixon says, theoretically, this could give rise to liability proceedings and even class action. And the Privacy Act may only be one of the legal avenues available.