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February 21, 2006

Federal Court Dismisses Laptop Security Case

A case that has received little attention may have some fairly large implications for the banking industry.  Stacey Lawton Guin was a customer of Brazos Higher Education Service, a student loan provider.  An employee of Brazos, John Wright, worked from home analyzing loan portfolios.  Brazos supplied Wright with a laptop that contained personal information about Brazos customers.  At some point, Wright's home was burglarized and the laptop was stolen.  Despite attempts to track and recover the computer, it remains lost.  Brazos notified its customers about the breach in privacy based on the lost data.

Guin sued Brazos on the grounds that under the Gramm-Leach-Bliley Act, the company should have routinely encrypted the data as a privacy protection.  U.S. District Judge Richard Kyle for the District of Minnesota granted summary judgment in favor of Brazos.  Judge Kyle noted that the law does not require encryption, and that Wright's house was in a relatively low crime area.  He also said that the act does not prohibit anyone from working in a home office with sensitive data.

ZDNET and FindLaw have the details.

February 21, 2006 | Permalink

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