Shared Drives Pose Data Privacy and Legal Risks

p2ppppFind Your Next Job ppAre you storing sensitive data on a shared network drive If so your organization could be at serious risk of a data breach or privacy lawsuit Shared drives like the common S drive are often used to store documents spreadsheets customer information financial records and even scanned IDs But heres the problem these network shares are rarely encrypted lack clear data governance policies and are accessible to dozensor even hundredsof employees across different departments Without proper oversight unsecured network drives become a data security nightmareppDont let poor information governance put your business at risk take the time to learn why securing sensitive data on shared drives is critical for avoiding data breaches maintaining compliance with privacy laws and safeguarding your companys reputationppIn todays environment of rapidly expanding state consumer privacy laws and data breach notification statutes companies that fail to control where sensitive data lives are sitting on serious legal and reputational risk Heres what you need to knowand why unsecured network shares are no longer just an IT headache Its a legal liabilityppMost people know about Californias Consumer Privacy ActConsumer Privacy Rights Act but its far from alone As of 2025 over a dozen states have passed their own consumer privacy lawsincluding Colorado Connecticut Utah Virginia Texas Florida Oregon and others Heres what these state privacy laws typically grant consumersppReasonably protected sounds vague but its increasingly being interpreted to mean basic security practiceslike encryption access controls and data governance Storing Social Security numbers or financial info in an unprotected shared drive with no audit trail Thats not going to flyppEvery US state has its own data breach notification law and many have recently updated them These laws require businesses to notify affected consumersand sometimes regulatorswhen certain types of personal information are accessed or acquired without authorizationppThe trigger Often its exposure of unencrypted data such asppIf that data lives on an unsecured network share accessible by anyone on the networkor worse breached by an outsideryou may have a legal duty to notify and fastppShared network drives are a leftover from a simpler time They oftenppIn short theyre a soft target for internal mishandling or external breachesppEven if no breach has occurred yet regulators may still view careless storage as a failure to implement reasonable security measures something required by many state laws and by the FTC under its enforcement of Section 5 for unfair practicesppLets connect the dotsppIn each case youre potentially looking atppThe good news Much of this risk is preventable Here are some practical stepsppState privacy laws are becoming more aggressive and regulators are increasingly focused on where and how companies store consumer data not just how they use it An old network share with no encryption no oversight and no purpose may seem like lowhanging fruit from a compliance perspective but its exactly the kind of vulnerability that can turn into a legal firestormppIf your organization hasnt taken a hard look at its shared storage practices lately now is the time Because in the age of modern data privacy laws we didnt know it was there is no longer a defenseppMore Upcoming Eventspp ppSign Up for any or all of our 25 Newsletterspp ppYou are responsible for reading understanding and agreeing to the National Law Reviews NLRs and the National Law Forum LLCs  Terms of Use and Privacy Policy before using the National Law Review website The National Law Review is a freetouse nologin database of legal and business articles The content and links on wwwNatLawReviewcom are intended for general information purposes only Any legal analysis legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice No attorneyclient or 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