SCENARIO -Please use the following to answer the next question: Martin Briseño is the director of human resources at the Canyon City location of the U.S. hotel chain Pacific Suites. In 1998, Briseño decided to change the hotel’s on-the-job mentoring model to a standardized training program for employees who were progressing from line positions into supervisory positions. He developed a curriculum comprising a series of lessons, scenarios, and assessments, which was delivered in-person to small groups. Interest in the training increased, leading Briseño to work with corporate HR specialists and software engineers to offer the program in an online format. The online program saved the cost of a trainer and allowed participants to work through the material at their own pace. Upon hearing about the success of Briseño’s program, Pacific Suites corporate Vice President Maryanne Silva-Hayes expanded the training and offered it company-wide. Employees who completed the program received certification as a Pacific Suites Hospitality Supervisor. By 2001, the program had grown to provide industry-wide training. Personnel at hotels across the country could sign up and pay to take the course online. As the program became increasingly profitable, Pacific Suites developed an offshoot business, Pacific Hospitality Training (PHT). The sole focus of PHT was developing and marketing a variety of online courses and course progressions providing a number of professional certifications in the hospitality industry. By setting up a user account with PHT, course participants could access an information library, sign up for courses, and take end-of-course certification tests.
When a user opened a new account, all information was saved by default, including the user’s name, date of birth, contact information, credit card information, employer, and job title. The registration page offered an opt-out choice that users could click to not have their credit card numbers saved. Once a user name and password were established, users could return to check their course status, review and reprint their certifications, and sign up and pay for new courses. Between 2002 and 2008, PHT issued more than 700,000 professional certifications. PHT’s profits declined in 2009 and 2010, the victim of industry downsizing and increased competition from e-learning providers. By 2011, Pacific Suites was out of the online certification business and PHT was dissolved. The training program’s systems and records remained in Pacific Suites’ digital archives, un-accessed and unused. Briseño and Silva-Hayes moved on to work for other companies, and there was no plan for handling the archived data after the program ended. After PHT was dissolved, Pacific Suites executives turned their attention to crucial day-to-day operations. They planned to deal with the PHT materials once resources allowed. In 2012, the Pacific Suites computer network was hacked. Malware installed on the online reservation system exposed the credit card information of hundreds of hotel guests.
While targeting the financial data on the reservation site, hackers also discovered the archived training course data and registration accounts of Pacific Hospitality Training’s customers. The result of the hack was the exfiltration of the credit card numbers of recent hotel guests and the exfiltration of the PHT database with all its contents. A Pacific Suites systems analyst discovered the information security breach in a routine scan of activity reports. Pacific Suites quickly notified credit card companies and recent hotel guests of the breach, attempting to prevent serious harm. Technical security engineers faced a challenge in dealing with the PHT data. PHT course administrators and the IT engineers did not have a system for tracking, cataloguing, and storing information. Pacific Suites has procedures in place for data access and storage, but those procedures were not implemented when PHT was formed.
When the PHT database was acquired by Pacific Suites, it had no owner or oversight. By the time technical security engineers determined what private information was compromised, at least 8,000 credit card holders were potential victims of fraudulent activity. How was Pacific Suites responsible for protecting the sensitive information of its offshoot, PHT?
- As the parent company, it should have transferred personnel to oversee the secure handling of PHT’s data.
- As the parent company, it should have performed an assessment of PHT’s infrastructure and confirmed complete separation of the two networks.
- As the parent company, it should have ensured its existing data access and storage procedures were integrated into PHT’s system.
- As the parent company, it should have replaced PHT’s electronic files with hard-copy documents stored securely on site.
Answer(s): C
Explanation:
Why option C is the best answer
Pacific Suites, as the parent organization that created and owned the PHT business, was obligated to apply its own data-access, retention, and protection policies to the new off-shoot’s information assets.
When PHT was launched, its databases were left without any dedicated governance because the program was initially treated as an internal project rather than a stand-alone business unit. The logical and most effective corrective action therefore was to integrate Pacific Suites’ existing documented procedures for data handling into PHT’s environment —i.e., map the parent’s retention schedules, encryption requirements, access controls, and incident-response steps to the PHT database. This would have provided ownership, ensured that private data (including credit-card numbers) was classified, protected, and disposed of in accordance with corporate policy, and prevented the data from being left “ownerless” and vulnerable.
Loss of ownership is a control gap – Leaving a database without a responsible party violates fundamental principles of information security (confidentiality, integrity, availability) and typically breaches privacy regulations that require documented accountability (e.g., GDPR Art. 5(1)(a), NIST SP 800-53 PL-2). Procedural transfer is the standard industry response – Frameworks such as ISO/IEC 27001 and the PCI DSS require that any environment that processes, stores, or transmits payment-card data must inherit appropriate security controls from the owning organization. Merging PHT’s data stores into the parent’s control framework satisfies these requirements. The other options are impractical or counter-productive
A – Transfer personnel – Adding staff alone does not guarantee protection; it merely adds headcount without fixing the underlying control deficiency. B – Perform an assessment & confirm network separation – While useful, a pure assessment without implementation of controls does not remediate the lack of a documented handling process for the data. Separation also does not address classification, encryption, or retention policies for the existing data.
D – Replace electronic files with hard-copy – This would increase exposure (paper is harder to encrypt, more prone to physical loss) and does not solve the core issue of procedural control; it also conflicts with modern data-management best practices and legal retention schedules.
Therefore, C – ensuring that Pacific Suites’ existing data-access and storage procedures were applied to PHT’s system directly addresses the root cause: the absence of a governance framework for the archived training data and credit-card information.
References (working links)
1. NIST Special Publication 800-53 Rev. 5 – Security and Privacy Controls for Federal Information
Systems – Provides guidance on “System and Communications Protection” and the need to incorporate established security controls when new systems are introduced. https://csrc.nist.gov/publications/detail/sp/800-53/rev-5/final
2. PCI DSS v4.0 – Requirement 3.1 – “Scope Determination” and 3.2 – “Cardholder Data Storage
Requirements” – Emphasizes that any environment handling payment-card data must be covered by documented security controls and ownership. https://www.pcisecuritystandards.org/document_library?category=pci_dss
These sources underpin the principle that the parent entity must extend its documented data-handling procedures to any subsidiary or off-shoot that processes the same sensitive information.