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A new consumer notification law recently was enacted and signed into law in California that may present legal and logistical challenges for companies all across the country that use computers to store customer information. ( See California Civil Code � 1798.82) On July 3, 2003, companies that do business in California and that maintain computerized customer records — no matter where they are located — must notify customers of computer security breaches. Given the increasing and unpredictable frequency with which computer intrusions now occur, this law may require major new ways of doing and monitoring business use of computers. And since the term “breach” is not defined in the law, employee access to restricted information may trigger the notification requirement. The impact on interstate commerce of this new consumer protection law may be significant, and that might prompt a Constitutional challenge to the statute. The California law specifies that notice must be provided if there is a computer security breach and if the computerized records contain names, together with unencrypted data including Social Security numbers, driver’s license numbers, state identification card numbers, account numbers or credit card or debit account numbers with passwords. The law further requires that, in the event of a security breach, the disclosure of such breach must take place in the “most expedient time possible and without unreasonable delay.” However, the notice may be delayed if law enforcement officials deem it necessary. The required notice may be written or electronic (e-mail), and if the cost of such a notice would be more than $250,000, or if more than 500,000 people must be notified, a company may use media outlets as a substitute for a formal notice. Violations of the new law may result in an injunction and/or civil damages. A private right of action is given to injured customers. An injunction against doing business with California customers could have dire consequences for untold numbers of businesses. The law presents many unanswered questions:

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