Privacy & Information Security Law Blog

On April 11, 2018, Arizona amended its data breach notification law (the “amended law”). The amended law will require persons, companies and government agencies doing business in the state to notify affected individuals within 45 days of determining that a breach has resulted in or is reasonably likely to result in substantial economic loss to affected individuals. The old law only required notification “in the most expedient manner possible and without unreasonable delay.” The amended law also broadens the definition of personal information and requires regulatory notice and notice to the consumer reporting agencies (“CRAs”) under certain circumstances.

Key provisions of the amended law include:

• Definition of Personal Information. Under the amended law, the definition of “personal information” now includes an individual’s first name or initial and last name in combination with one or more of the following “specified data elements:” (1) Social Security number; (2) driver’s license or non-operating license number; (3) a private key that is unique to an individual and that is used to authenticate or sign an electronic record; (4) financial account number or credit or debit card number in combination with any required security code, access code or password that would allow access to the individual’s financial account; (5) health insurance identification number; (6) medical or mental health treatment information or diagnoses by a health care professional; (7) passport number; (8) taxpayer identification or identity protection personal identification number issued by the Internal Revenue Service; and (9) unique biometric data generated from a measurement or analysis of human body characteristics to authenticate an individual when the individual accesses an online account. The amended law also defines “personal information” to include “an individual’s user name or e-mail address, in combination with a password or security question and answer, which allows access to an online account.”
• Harm Threshold. Pursuant to the amended law, notification to affected individuals, the Attorney General and the CRAs is not required if breach has not resulted in or is not reasonably likely to result in substantial economic loss to affected individuals.
• Notice to the Attorney General and Consumer Reporting Agencies. If the breach requires notification to more than 1,000 individuals, notification must also be made to the Attorney General and the three largest nationwide CRAs.
• Timing. Notifications to affected individuals, the Attorney General and the CRAs must be issued within 45 days of determining that a breach has occurred.
• Substitute Notice. Where the cost of making notifications would exceed $50,000, the affected group is bigger than 100,000 individuals, or there is insufficient contact information for notice, the amended law now requires that substitute notice be made by (1) sending a written letter to the Attorney General demonstrating the facts necessary for substitute notice and (2) conspicuously posting the notice on the breached entity’s website for at least 45 days. Under the amended law, substitute notice no longer requires email notice to affected individuals and notification to major statewide media.
• Penalty Cap. The Attorney General may impose up to $500,000 in civil penalties for knowing and willful violations of the law in relation to a breach or series of related breaches. The Attorney General also Is entitled to recover restitution for affected individuals.