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Man-in-the-Middle Attacks

By Jonathan Bick
January 31, 2016

During the last week of December 2015, several law firms in New Jersey were the victims of non-trivial data breaches. While three involved real estate closings and the rest involved commercial transactions, all resulted in funds being wired to an Internet hacker. Each firm was a victim of “man-in-the-middle” attacks, whereby a hacker first acquires access to a firm's server, then, using said access, the hacker redirects all e-mails associated with the firm's server to a hacker's server and subsequently changes payment information and other information in those e-mails to defraud the firm and others working with the firm.

Keeping Data Safe

While the Fair Credit Reporting Act (FRCA), 15 U.S.C. '1681 et seq. (1970), and other federal laws encourage the implementation of policies, programs and procedures to keep data safe by requiring entities to maintain reasonable procedures designed to avoid the disclosure of information, not all entities are covered, and the obligations imposed on covered entities is not specific. Even covered entities may not be required to protect themselves from man-in-the-middle attacks, because typically regulations implementing these obligations primarily detail disposal obligations, such as implementing and monitoring compliance with policies and procedures that require the destruction or erasure of electronic media containing information so that the information cannot practicably be read or reconstructed. See, 16 C.F.R. '682.3(b)(2).

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