Failing to handle personally identifiable information (PII) securely could lead to costly fines and a loss of customer trust in your business. According to IBM, the average cost of a data breach exposing personal information is $4.45 million.
The solution to avoiding such hefty costs begins by understanding what constitutes personally identifiable information and ensuring you adequately protect sensitive customer details.
Read on to learn more about what is considered PII, and discover the PII best practices that will help your business securely manage customer data, stay compliant with privacy regulations, and maintain customer trust in your brand.
What Is PII?
Personally identifiable information (PII) refers to any data that potentially enables the identification of a specific individual. This includes details like full names, government IDs, and email addresses. However, PII also involves some less obvious data points. Let’s take a closer look at some examples of PII:
- Birthdates: When combined with other elements, a person's date of birth allows potential identification.
- Physical addresses: Address records in the wrong hands could reveal where someone lives.
- Biometric records: Data points like fingerprints, facial scans, and retina images are highly sensitive.
- IP addresses: With specific tools, a device's IP address might help pinpoint its user.
- Vehicle registration/license plate numbers: In some cases, license details can provide clues to a person's identity.
- Financial information: Given their privacy implications, sensitive financial details like credit cards, bank accounts, and investment portfolios demand the highest security.
- Medical records: Health data is regulated due to confidentiality. Your systems must offer stringent safeguards for any medical details.
- Employment information: Job specifics, reviews, and pay data contribute to an individual's PII profile.
- Education records: Transcripts, degrees, and coursework similarly need to be safeguarded appropriately.
PII vs. Personal Data
As explained above, PII refers specifically to data that could be used to identify an individual directly. This includes direct identifiers like names and contact details and indirect data such as birth dates and job histories.
Personal data is a broader term than PII. It includes other factual or subjective information about an individual - even if it's not directly identifying. For example, personal data your business may collect could be:
- Internet browsing histories and online search queries.
- Personal preferences, interests, hobbies, and pastimes.
- Physical characteristics like height, weight, hair, and eye color.
- Employment records detailing job roles and performance metrics.
- Education data, transcripts, coursework details, and qualifications attained.
- Loan or credit payment histories showing repayment patterns over time.
Knowing this distinction ensures that only necessary information is requested from customers and high-sensitivity details are securely managed.
Sensitive vs. Non-Sensitive PII
Not all personally identifiable information carries the same level of risk. Some types of PII pose less of a risk of identity theft, if exposed.
Sensitive PII
This type of PII needs strict security controls to protect your customers and business. Examples include:
- Government ID numbers like Social Security, passport, or driver's license
- Financial account details such as credit card or bank account numbers
- Medical records
- Biometric data like fingerprints or facial recognition data
- Racial, ethnic, or sexual orientation information
Sensitive PII requires stricter security controls since exposure increases the risk of identity theft, financial fraud, and other serious threats for your customers. Due to the severity of potential harm, there are also typically higher penalties if this data is not adequately safeguarded.
Non-Sensitive PII
This category of PII encompasses personal details about customers that do not directly pose risks of identity theft or financial fraud if exposed. However, it is still essential to protect this information to maintain customer privacy and trust. Examples include:
- A customer's given name
- Phone number
- Email address
- Physical home or work address
- Employment details like position or company
- Education History
While exposing this data may not have direct financial consequences for customers, it could allow for targeted marketing or social engineering attacks against them. Keeping non-sensitive PII secure helps ensure your business retains customers' confidence that personal details are handled responsibly.
Examples of PII in Different Contexts
The types of PII collected can vary depending on your industry and the nature of your work. Understanding what customer data needs protection in your context is essential for compliance.
- Legal: Court documents and client files contain sensitive information such as names, contact information, and case details. Proper redaction is needed for public records.
- HR: Job applications include personal histories, while employee records contain compensation and benefits data.
- Healthcare: Medical professionals deal with highly sensitive health and insurance records and strict privacy protocols are a necessity.
- Financial services: Applications for services like loans and taxes involve financial account and income information.
- Government: Public records include citizen identification and participation in assistance programs.
Identifying the customer data involved in your work allows for informed security decisions that respect privacy obligations and builds trust with your customers.
Legal frameworks governing PII
Understanding the legal landscape surrounding personally identifiable information protection is essential for organizations handling sensitive data. Multiple regulatory frameworks impose strict requirements for PII handling, each with significant financial penalties for non-compliance. Here are the four key regulations that organizations must navigate:
GDPR (General Data Protection Regulation)
The General Data Protection Regulation (GDPR) is the toughest privacy and security law in the world. Though it was drafted and passed by the European Union (EU), it imposes obligations onto organizations anywhere, so long as they target or collect data related to people in the EU.
Key requirements: GDPR mandates that organizations obtain explicit consent for data processing, implement data protection by design and default, and provide individuals with rights including access, rectification, and erasure of their personal data.
Penalties: For especially severe violations, listed in Art. 83(5) GDPR, the fine framework can be up to 20 million euros, or in the case of an undertaking, up to 4% of their total global turnover of the preceding fiscal year, whichever is higher. Recent enforcement shows these penalties are actively imposed - by January 2025, the cumulative total of GDPR fines has reached approximately €5.88 billion.
HIPAA (Health Insurance Portability and Accountability Act)
HIPAA protects personal health information (PHI) in the United States healthcare system, covering healthcare providers, health plans, and business associates who handle protected health information.
Key requirements: Organizations must implement administrative, physical, and technical safeguards to protect PHI, conduct regular risk assessments, train employees on privacy protocols, and report data breaches within 60 days.
Penalties: The penalties for HIPAA violations include civil monetary penalties ranging from $141 to $2,134,831 per violation depending on the level of culpability. The healthcare industry faces the highest data breach costs, averaging $10.93 million. The sensitivity of personal health information (PHI), regulated under HIPAA and PHIPA, imposes strict data protection requirements.
CCPA (California Consumer Privacy Act)
The CCPA grants California residents comprehensive rights over their personal information and applies to businesses that meet specific revenue or data processing thresholds.
Key requirements: Organizations must provide clear privacy notices, honor consumer requests to know what personal information is collected, allow consumers to delete their data, and provide opt-out mechanisms for the sale of personal information.
Penalties: Beginning in 2025, monetary damages, administrative fines, and civil penalties are being increased for violations of the CCPA. The CCPA states that businesses can face a penalty of up to $2,500 for each unintentional violation and $7,500 for each intentional violation. Unlike GDPR, there's no cap on total penalties, meaning violations affecting large numbers of consumers can result in substantial cumulative fines.
PCI DSS (Payment Card Industry Data Security Standard)
PCI DSS governs the security of credit and debit card information for any organization that processes, stores, or transmits cardholder data.
Key requirements: Organizations must maintain secure networks, protect cardholder data with encryption, implement strong access controls, regularly monitor networks, and maintain information security policies.
Penalties: Non-compliance can result in fines ranging from $5,000 to $100,000 per month. You'll hear about PCI compliance fines, which can vary from $5,000 to $100,000 a month depending on the size of the company and the duration and scope of your non-compliance. Additional costs include potential liability for fraudulent transactions and card replacement expenses.
Multi-regulatory compliance challenges
The challenge isn't just following one regulation but managing many. Financial services companies, for example, juggle GLBA, PCI DSS, and GDPR—each with its own rules and penalties. Failure to comply with one can lead to regulatory action across the board. Organizations operating across multiple jurisdictions must implement comprehensive data protection strategies that satisfy the strictest requirements of all applicable frameworks.
These regulatory frameworks demonstrate that PII protection isn't optional—it's a legal requirement with severe financial consequences for non-compliance. The substantial penalties underscore the importance of implementing robust data protection measures, including proper redaction protocols when sharing documents containing sensitive information.
What Are the Risks of PII Exposure?
If the PII under your care is not adequately protected, serious risks may result for your organization. Here are some of the main consequences when data is exposed:
- Data breaches/identity theft: Exposure could enable fraudsters to commit identity theft or financial fraud, potentially causing significant personal and financial distress.
- Regulatory fines and penalties: Strict data protection laws, such as GDPR, CCPA, and HIPAA, enforce harsh penalties for failing to secure PII and report breaches appropriately. Non-compliance may damage your company financially.
- Loss of customer trust: When customers' data under your watch is mishandled or revealed, it severely damages confidence in your business's capability to care for their information responsibly. As a result, loyal customers and potential clients may turn to competitors.
- Civil lawsuits: Affected customers, employees, or other parties could file civil actions against your organization, seeking damages and costs from PII breaches under your watch.
- Damage to reputation: News of a data violation involving PII from your systems can inflict lasting reputational harm that is difficult to overcome, even after legal matters are resolved. A damaged reputation limits your ability to acquire and retain customers long-term.
Read also: What Is Personally Identifiable Information (PII)?
Consequences of PII breaches
When PII protection fails, organizations face devastating impacts that extend far beyond regulatory fines. Understanding these broader consequences helps illustrate why robust data protection measures are essential for business survival.
Financial devastation
The global average cost of a data breach in 2024: a 10% increase over last year and the highest total ever. The average total cost of a data breach is $4.88 million. These costs include forensic investigations, legal fees, credit monitoring services for affected customers, system remediation, and potential settlements.
Direct fines and fees ─ The Payment Card Industry Security Standards Council may impose fines and penalties because of a data breach. Additional fines may vary and come from both regulatory agencies and card network brands. Organizations also face substantial indirect costs, with lost business soared to $1.47 million in the 2024 IBM report.
Reputational damage and customer loss
Research has shown that up to a third of customers in retail, finance and healthcare will stop doing business with organisations that have been breached. Additionally, 85% will tell others about their experience, and 33.5% will take to social media to vent their anger.
60% of survey respondents reported being less likely to do business with a retailer or brand that has suffered a data breach, and 21% said they would change companies outright after a data breach. This customer exodus can persist for years, making recovery extremely challenging.
Operational disruption
According to IBM's Cost of Data Breach Report 2023, the average time to identify and contain a breach is 277 days. During this period, downtime and loss of productivity can grind operations to a halt, leading to missed opportunities and decreased revenue.
Operations may need to be completely shut down until investigators get all the answers they need. This process can take days, even weeks to identify vulnerabilities, depending on the severity of the breach.
Long-term business impact
The consequences extend well beyond immediate costs. Although the short-term impacts of a cyberattack on a business are quite severe, the long-term impacts can be even more important, such as the loss of competitive advantage, reduction in credit rating, and increase in cyber insurance premiums.
Some companies never recover from major breaches. In March 2025, DNA testing firm 23andMe filed for Chapter 11 bankruptcy protection following a tumultuous period marked by declining sales, executive departures, and a high-profile data breach in 2023 that compromised sensitive information of nearly 7 million users. The breach exposed names, birth years, ancestry information, and other personal details, triggering multiple class action lawsuits and a wave of customer mistrust that severely damaged the company’s consumer business. As part of its bankruptcy proceedings, 23andMe agreed to a court-supervised sale of its core assets to Regeneron Pharmaceuticals for $256 million, with the transaction expected to close in the third quarter of 2025 pending court approval. This sequence of events illustrates how a major PII breach can threaten the very existence of an organization, leading to bankruptcy and the forced sale of its assets.
Legal and compliance complications
Beyond regulatory fines, organizations face potential class-action lawsuits from affected customers and employees. When customers' personal information is compromised, it can erode trust in the industry, leading to a loss of credibility. Even after implementing security measures and resolving the breach, the negative perception may linger in the minds of customers and potential clients for years to come.
These consequences underscore why prevention through proper PII handling—including effective redaction protocols—is far more cost-effective than dealing with breach aftermath. The financial, operational, and reputational costs of PII exposure make comprehensive data protection not just a compliance requirement, but a business survival imperative.
How to Protect PII
Strong security means careful handling of PII from the beginning. Implementing robust safeguards at every stage helps ensure sensitive customer information remains safely in your care. Here are the PII best practices you should implement to protect the information:
Data Collection Limitation (Minimization)
Only collect the PII that is strictly necessary for your business functions. Limit extraneous data that increases security risks and compliance burdens if exposed. Regularly review data collections and remove unneeded customer information.
Data Encryption
Encrypt all PII to ensure data is coded when stored in your systems or backup files. Encryption should also be used when transmitting PII via email or other methods.
Access Controls
Implement strict access controls, so only employees directly assigned to a task can view particular PII elements. Regularly review access permissions and remove any no longer warranted by job functions.
Redaction of PII from Documents
Redaction means removing or obscuring PII from documentation before internal or external sharing. This helps ensure that sensitive customer data is not at risk of exposure, even if a security incident occurs. Your business can use automated redaction software to black out protected information while allowing authorized file sharing.
Secure Disposal
PII records no longer necessary for your business functions should be permanently destroyed. Your company should implement procedures for physically shredding paper documents containing PII or using secure digital erasure tools to make electronic files unrecoverable.
Employee Training
Providing ongoing security awareness training to your workforce helps ensure everyone understands the correct protocols for handling the PII entrusted to your business. Regular refresher courses help employees stay vigilant and can help identify and mitigate security issues that pose risks to customer information.
Tools and technologies for PII protection
Organizations have access to a comprehensive suite of tools and technologies designed to protect personally identifiable information throughout its lifecycle. These solutions work together to create a robust defense against data breaches and ensure regulatory compliance.
Data discovery and classification tools
Modern discovery tools leverage artificial intelligence to automatically scan files, databases, emails, and cloud storage systems. These tools can identify sensitive data patterns including Social Security numbers, credit card information, and medical records across structured and unstructured data sources, helping organizations understand where their PII resides.
Data loss prevention (DLP)
Data loss prevention solutions provide comprehensive protection by monitoring data in three critical states: data in use (actively accessed by applications), data in motion (moving across networks), and data at rest (stored in databases and file systems). DLP tools help organizations identify, classify, and secure sensitive information, ensuring it is not inadvertently shared or accessed by unauthorized users.
Encryption technologies
Encryption serves as a fundamental protection mechanism for PII both in transit and at rest. Organizations should use robust encryption protocols, such as SSL/TLS for data in transit and AES-256 for data at rest. Advanced encryption methods can even enable computational operations on encrypted data while keeping the underlying information secure.
Identity and access management (IAM)
IAM practices ensure that only authorized individuals have access to PII, reducing the likelihood of data breaches. Core components include role-based access control (RBAC), which limits data access based on job roles, ensuring employees only access information necessary for their tasks. Multi-factor authentication adds additional verification layers beyond passwords.
Privacy-enhancing technologies (PETs)
Privacy-enhancing technologies protect privacy by eliminating or reducing personally identifiable information while preserving data utility. These include differential privacy, which adds statistical noise to datasets to protect individual privacy while enabling analysis, and synthetic data generation that creates new datasets with similar properties without revealing original individual information.
Automated redaction software
Purpose-built redaction tools provide specialized capabilities for permanently removing PII from documents before sharing. These solutions offer automated detection of sensitive information and permanent removal rather than simple visual masking, ensuring data cannot be recovered later.
Integration and automation benefits
Manual PII management is no longer feasible in today's high-paced technological landscape. Organizations increasingly rely on AI and automated sensitive data discovery tools to ensure their practices follow relevant regulations. Modern PII protection requires an integrated approach combining multiple technologies to create comprehensive protection that scales with organizational growth while maintaining operational efficiency and regulatory compliance.
PII redaction software
Specialized PII redaction software provides organizations with powerful tools to automatically identify and permanently remove personally identifiable information from documents, ensuring secure data sharing and regulatory compliance.
What is PII redaction software
PII redaction software is designed to automatically identify and remove or obscure sensitive personal data from various types of documents and data sets. Its primary purpose is to help organizations comply with data privacy regulations and protect the confidentiality of individual's personal information by permanently removing sensitive data rather than simply masking it visually.
Key features of PII redaction software
Modern PII software incorporates several essential capabilities to redact pii effectively:
Automated detection: Advanced PII redaction tools accurately identify and detect various types of personally identifiable information, such as names, addresses, phone numbers, email addresses, Social Security numbers, and credit card details across multiple document formats.
Multiple redaction methods: Various redaction types, including blurring, pixelating, permanent removal, and masking, can obscure sensitive information based on organizational needs.
Bulk processing capabilities: Support for multiple file types and formats across audio, video, image, and document types, enabling organizations to process large volumes of files simultaneously.
Pattern recognition: AI-powered pattern recognition detects specific types of information, such as Social Security Numbers, credit card details, or custom patterns unique to particular organizations.
Benefits for organizations
Enhanced security: PII redaction software protects sensitive data from unauthorized access and breaches. By automatically detecting and redacting PII, the software reduces the risk of exposure, ensuring confidential information remains secure throughout its lifecycle.
Regulatory compliance: With stringent data protection laws in place, organizations must ensure PII is adequately protected. PII redaction software helps businesses comply with regulations by systematically removing sensitive data from documents and communications.
Operational efficiency: Manual redaction is time-consuming and prone to errors. Automated PII redaction software streamlines this process, ensuring accuracy and freeing up staff to focus on more value-added tasks.
Cost savings: Considering that data breaches involving PII can cost organizations millions in fines and remediation, investing in proper redaction technology provides significant cost protection.
Redactable's AI-powered solution
Redactable offers a comprehensive AI-powered redaction platform that addresses the critical need for PII protection. The platform provides automated detection and permanent redaction of sensitive information, with key capabilities including:
- 98% time savings compared to manual redaction methods
- Permanent redaction that completely removes sensitive data, including metadata
- AI-powered automated detection of over 30 categories of sensitive information
- Browser-based accessibility requiring no software installation
- Team collaboration features with audit trails and compliance reporting
- Integration capabilities with cloud services and existing workflows
Redactable's solution ensures that once PII is redacted, it cannot be recovered or revealed later, providing true data protection rather than simple visual masking. This makes it particularly valuable for organizations in legal, healthcare, government, and financial sectors where permanent data removal is essential for compliance and security.
Using Redaction Software for PII Protection
All personally identifiable information requires safeguarding from unauthorized access. Protecting your customers' private details helps prevent repercussions such as fines or legal action.
Redactable’s automated AI-powered redaction solution can allow your business to meet compliance standards and elevate PII security. The software permanently obscures all instances of protected information within documents and files before sharing internally or externally.
Redactable offers the following advantages:
- Perfect accuracy in identifying all instances of personal data such as names, addresses, and financial information within text.
- Significant time and cost savings versus manual redaction by employees. The AI system can review large volumes of records quickly.
- Audit trails and compliance reports to demonstrate due diligence in protecting customer privacy.
- Permanent redactions ensure accidental exposure is impossible if files are unintentionally shared or accessed without authorization.
Learn more about how Redactable can streamline your business's PII protection protocols by signing up for a free trial today.
