Data Theft Costs, A Lot…

While most companies are aware of the need to protect their electronic records from theft, we are just now learning how costly data theft can be.

In the first enforcement action stemming from the HITECH Act breach notification rule, Blue Cross and Blue Shield of Tennessee has agreed to pay federal regulators $1.5 million and enter into a corrective action plan after 57 hard drives were stolen from the insurer.

The company said the settlement covers the 2009 theft of the hard drives from a data storage closet at a former Blue Cross call center located in Chattanooga. To date, there is no indication of any misuse of personal data from the stolen hard drives.

Since the theft was uncovered in late 2009, the company has spent nearly $17 million in investigation, notification and protection efforts.