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Attorney General says Congress should require quick notification to consumers on data breaches

WASHINGTON - Attorney General Eric Holder is urging Congress to require businesses to quickly alert consumers and law enforcement agencies in the wake of significant data breaches like the ones at discount retailer Target and at Neiman Marcus.

In a video posted Monday on the Justice Department's website, Holder called on Congress to create a national standard for notifying consumers whose information may have been compromised, so people can protect themselves from identity theft.

Holder said congressional action would let law enforcement agencies investigate such crimes thoroughly and would hold companies accountable when they fail to safeguard sensitive information. Holder said there should be exemptions for harmless breaches to avoid placing unnecessary burdens on businesses that act responsibly.

The comments followed a Feb. 4 Senate Judiciary Committee hearing at which executives from Target and Neiman Marcus were pressed about how quickly they notified customers of breaches.

The Justice Department told Target executives on Dec. 12 of suspicious activity involving payment cards and the company started an investigation, removed malware and publicly announced the data theft on Dec. 19, said John Mulligan, executive vice-president and chief financial officer at the No. 2 U.S. retailer.

A processing firm told luxury retailer Neiman Marcus of a problem on Dec. 13, the company's investigators made a report on Jan. 2 and customers were notified on Jan. 10, said Michael Kingston, senior vice-president and chief information officer at Neiman Marcus Group Inc.

Legislation in line with Holder's comments, advanced by Senate Judiciary Committee chairman Patrick Leahy, D-Vt., would establish a national standard for companies to follow in notifying consumers after a data breach. The White House has been calling for such a law for several years.

One White House proposal would require companies that collect information about more than 10,000 people over 12 months to notify any individual whose sensitive information is improperly accessed or stolen "unless there is no reasonable risk of harm or fraud." The proposal also would require notice to the government and the news media if the breach affects 5,000 or more people.

Earlier this month, the administration released a 39-page guide urging vital industries like transportation, financial, health care and energy to assess their risk to cyberattacks and take action to close gaps. The Homeland Security Department also launched a voluntary program for businesses to get help at no cost from its cybersecurity experts about ways to counter threats.

States, too, have been active on the cybersecurity front. Forty-six states and the District of Columbia have enacted legislation requiring private or government entities to notify individuals of security breaches of information, according to the National Conference of State Legislatures.

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