§ 2435. Notice of security breaches
(a) This section shall be known as the Security Breach Notice Act.
(b) Notice of breach.
(1) Except as otherwise provided in subsection (d) of this section, any data collector
that owns or licenses computerized personally identifiable information or login credentials
shall notify the consumer that there has been a security breach following discovery
or notification to the data collector of the breach. Notice of the security breach
shall be made in the most expedient time possible and without unreasonable delay,
but not later than 45 days after the discovery or notification, consistent with the
legitimate needs of the law enforcement agency, as provided in subdivisions (3) and
(4) of this subsection, or with any measures necessary to determine the scope of the
security breach and restore the reasonable integrity, security, and confidentiality
of the data system.
(2) Any data collector that maintains or possesses computerized data containing personally
identifiable information or login credentials that the data collector does not own
or license or any data collector that acts or conducts business in Vermont that maintains
or possesses records or data containing personally identifiable information or login
credentials that the data collector does not own or license shall notify the owner
or licensee of the information of any security breach immediately following discovery
of the breach, consistent with the legitimate needs of law enforcement as provided
in subdivisions (3) and (4) of this subsection.
(3) A data collector or other entity subject to this subchapter shall provide notice of
a breach to the Attorney General or to the Department of Financial Regulation, as
applicable, as follows:
(A) A data collector or other entity regulated by the Department of Financial Regulation
under Title 8 or this title shall provide notice of a breach to the Department. All
other data collectors or other entities subject to this subchapter shall provide notice
of a breach to the Attorney General.
(B)(i) The data collector shall notify the Attorney General or the Department, as applicable,
of the date of the security breach and the date of discovery of the breach and shall
provide a preliminary description of the breach within 14 business days, consistent
with the legitimate needs of the law enforcement agency as provided in this subdivision
(3) and subdivision (4) of this subsection (b), of the data collector’s discovery
of the security breach or when the data collector provides notice to consumers pursuant
to this section, whichever is sooner.
(ii) Notwithstanding subdivision (B)(i) of this subdivision (b)(3), a data collector who,
prior to the date of the breach, on a form and in a manner prescribed by the Attorney
General, had sworn in writing to the Attorney General that it maintains written policies
and procedures to maintain the security of personally identifiable information or
login credentials and respond to a breach in a manner consistent with Vermont law
shall notify the Attorney General of the date of the security breach and the date
of discovery of the breach and shall provide a description of the breach prior to
providing notice of the breach to consumers pursuant to subdivision (1) of this subsection
(b).
(iii) If the date of the breach is unknown at the time notice is sent to the Attorney General
or to the Department, the data collector shall send the Attorney General or the Department
the date of the breach as soon as it is known.
(iv) Unless otherwise ordered by a court of this State for good cause shown, a notice provided
under this subdivision (3)(B) shall not be disclosed to any person other than the
Department, the authorized agent or representative of the Attorney General, a State’s
Attorney, or another law enforcement officer engaged in legitimate law enforcement
activities without the consent of the data collector.
(C)(i) When the data collector provides notice of the breach pursuant to subdivision (1)
of this subsection (b), the data collector shall notify the Attorney General or the
Department, as applicable, of the number of Vermont consumers affected, if known to
the data collector, and shall provide a copy of the notice provided to consumers under
subdivision (1) of this subsection (b).
(ii) The data collector may send to the Attorney General or the Department, as applicable,
a second copy of the consumer notice, from which is redacted the type of personally
identifiable information or login credentials that was subject to the breach, and
which the Attorney General or the Department shall use for any public disclosure of
the breach.
(D) If a security breach is limited to an unauthorized acquisition of login credentials,
a data collector is only required to provide notice of the security breach to the
Attorney General or Department of Financial Regulation, as applicable, if the login
credentials were acquired directly from the data collector or its agent.
(4)(A) The notice to a consumer required by this subsection shall be delayed upon request
of a law enforcement agency. A law enforcement agency may request the delay if it
believes that notification may impede a law enforcement investigation, or a national
or Homeland Security investigation, or jeopardize public safety or national or Homeland
Security interests. In the event law enforcement makes the request for a delay in
a manner other than in writing, the data collector shall document such request contemporaneously
in writing, including the name of the law enforcement officer making the request and
the officer’s law enforcement agency engaged in the investigation. A law enforcement
agency shall promptly notify the data collector in writing when the law enforcement
agency no longer believes that notification may impede a law enforcement investigation,
or a national or Homeland Security investigation, or jeopardize public safety or national
or Homeland Security interests. The data collector shall provide notice required by
this section without unreasonable delay upon receipt of a written communication, which
includes facsimile or electronic communication, from the law enforcement agency withdrawing
its request for delay.
(B) A Vermont law enforcement agency with a reasonable belief that a security breach has
or may have occurred at a specific business shall notify the business in writing of
its belief. The agency shall also notify the business that additional information
on the security breach may need to be furnished to the Office of the Attorney General
or the Department of Financial Regulation and shall include the website and telephone
number for the Office and the Department in the notice required by this subdivision
(4)(B). Nothing in this subdivision (4)(B) shall alter the responsibilities of a data
collector under this section or provide a cause of action against a law enforcement
agency that fails, without bad faith, to provide the notice required by this subdivision
(4)(B).
(5) The notice to a consumer required in subdivision (1) of this subsection shall be clear
and conspicuous. A notice to a consumer of a security breach involving personally
identifiable information shall include a description of each of the following, if
known to the data collector:
(A) the incident in general terms;
(B) the type of personally identifiable information that was subject to the security breach;
(C) the general acts of the data collector to protect the personally identifiable information
from further security breach;
(D) a telephone number, toll-free if available, that the consumer may call for further
information and assistance;
(E) advice that directs the consumer to remain vigilant by reviewing account statements
and monitoring free credit reports; and
(F) the approximate date of the security breach.
(6) A data collector may provide notice of a security breach involving personally identifiable
information to a consumer by one or more of the following methods:
(A) Direct notice, which may be by one of the following methods:
(i) written notice mailed to the consumer’s residence;
(ii) electronic notice, for those consumers for whom the data collector has a valid e-mail
address, if:
(I) the data collector’s primary method of communication with the consumer is by electronic
means, the electronic notice does not request or contain a hypertext link to a request
that the consumer provide personal information, and the electronic notice conspicuously
warns consumers not to provide personal information in response to electronic communications
regarding security breaches; or
(II) the notice is consistent with the provisions regarding electronic records and signatures
for notices in 15 U.S.C. § 7001; or
(iii) telephonic notice, provided that telephonic contact is made directly with each affected
consumer and not through a prerecorded message.
(B)(i) Substitute notice, if:
(I) the data collector demonstrates that the lowest cost of providing notice to affected
consumers pursuant to subdivision (6)(A) of this subsection among written, e-mail,
or telephonic notice would exceed $10,000.00; or
(II) the data collector does not have sufficient contact information.
(ii) A data collector shall provide substitute notice by:
(I) conspicuously posting the notice on the data collector’s website if the data collector
maintains one; and
(II) notifying major statewide and regional media.
(c) In the event a data collector provides notice to more than 1,000 consumers at one
time pursuant to this section, the data collector shall notify, without unreasonable
delay, all consumer reporting agencies that compile and maintain files on consumers
on a nationwide basis, as defined in 15 U.S.C. § 1681a(p), of the timing, distribution, and content of the notice. This subsection shall not
apply to a person who is licensed or registered under Title 8 by the Department of
Financial Regulation.
(d)(1) Notice of a security breach pursuant to subsection (b) of this section is not required
if the data collector establishes that misuse of personally identifiable information
or login credentials is not reasonably possible and the data collector provides notice
of the determination that the misuse of the personally identifiable information or
login credentials is not reasonably possible pursuant to the requirements of this
subsection. If the data collector establishes that misuse of the personally identifiable
information or login credentials is not reasonably possible, the data collector shall
provide notice of its determination that misuse of the personally identifiable information
or login credentials is not reasonably possible and a detailed explanation for said
determination to the Vermont Attorney General or to the Department of Financial Regulation
in the event that the data collector is a person or entity licensed or registered
with the Department under Title 8 or this title. The data collector may designate
its notice and detailed explanation to the Vermont Attorney General or the Department
of Financial Regulation as “trade secret” if the notice and detailed explanation meet
the definition of trade secret contained in 1 V.S.A. § 317(c)(9).
(2) If a data collector established that misuse of personally identifiable information
or login credentials was not reasonably possible under subdivision (1) of this subsection,
and subsequently obtains facts indicating that misuse of the personally identifiable
information or login credentials has occurred or is occurring, the data collector
shall provide notice of the security breach pursuant to subsection (b) of this section.
(3) If a security breach is limited to an unauthorized acquisition of login credentials
for an online account other than an e-mail account the data collector shall provide
notice of the security breach to the consumer electronically or through one or more
of the methods specified in subdivision (b)(6) of this section and shall advise the
consumer to take steps necessary to protect the online account, including to change
his or her login credentials for the account and for any other account for which the
consumer uses the same login credentials.
(4) If a security breach is limited to an unauthorized acquisition of login credentials
for an email account:
(A) the data collector shall not provide notice of the security breach through the email
account; and
(B) the data collector shall provide notice of the security breach through one or more
of the methods specified in subdivision (b)(6) of this section or by clear and conspicuous
notice delivered to the consumer online when the consumer is connected to the online
account from an Internet protocol address or online location from which the data collector
knows the consumer customarily accesses the account.
(e) A data collector that is subject to the privacy, security, and breach notification
rules adopted in 45 C.F.R. Part 164 pursuant to the federal Health Insurance Portability and Accountability Act, P.L.
104-191 (1996) is deemed to be in compliance with this subchapter if:
(1) the data collector experiences a security breach that is limited to personally identifiable
information specified in 2430(10)(A)(vii); and
(2) the data collector provides notice to affected consumers pursuant to the requirements
of the breach notification rule in 45 C.F.R. Part 164, Subpart D.
(f) Any waiver of the provisions of this subchapter is contrary to public policy and is
void and unenforceable.
(g) Except as provided in subdivision (3) of this subsection, a financial institution
that is subject to the following guidances, and any revisions, additions, or substitutions
relating to an interagency guidance, shall be exempt from this section:
(1) The Federal Interagency Guidance Response Programs for Unauthorized Access to Consumer
Information and Customer Notice, issued on March 7, 2005, by the Board of Governors
of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office
of the Comptroller of the Currency, and the Office of Thrift Supervision.
(2) Final Guidance on Response Programs for Unauthorized Access to Member Information
and Member Notice, issued on April 14, 2005, by the National Credit Union Administration.
(3) A financial institution regulated by the Department of Financial Regulation that is
subject to subdivision (1) or (2) of this subsection shall notify the Department as
soon as possible after it becomes aware of an incident involving unauthorized access
to or use of personally identifiable information.
(h) Enforcement.
(1) With respect to all data collectors and other entities subject to this subchapter,
other than a person or entity licensed or registered with the Department of Financial
Regulation under Title 8 or this title, the Attorney General and State’s Attorney
shall have sole and full authority to investigate potential violations of this subchapter
and to enforce, prosecute, obtain, and impose remedies for a violation of this subchapter
or any rules or regulations made pursuant to this chapter as the Attorney General
and State’s Attorney have under chapter 63 of this title. The Attorney General may
refer the matter to the State’s Attorney in an appropriate case. The Superior Courts
shall have jurisdiction over any enforcement matter brought by the Attorney General
or a State’s Attorney under this subsection.
(2) With respect to a data collector that is a person or entity licensed or registered
with the Department of Financial Regulation under Title 8 or this title, the Department
of Financial Regulation shall have the full authority to investigate potential violations
of this subchapter and to prosecute, obtain, and impose remedies for a violation of
this subchapter or any rules or regulations adopted pursuant to this subchapter, as
the Department has under Title 8 or this title or any other applicable law or regulation.
(i) [Repealed.] (Added 2005, No. 162 (Adj. Sess.), § 1, eff. Jan. 1, 2007; amended 2011, No. 109 (Adj. Sess.), § 4, eff. May 8, 2012; 2013, No. 29, §§ 10, 11, eff. May 13, 2013; 2013, No. 199 (Adj. Sess.), § 67; 2015, No. 55, § 8; 2019, No. 89 (Adj. Sess.), § 3.)