10 ways that breaches burn business

February 15, 2011 by bkrenek

With a little bad luck, security breaches can become the match that sets your revenues aflame.  Breaches are big business for fraud “arsonists” who smoke out ways to profit from your pain.  How big?  Here’s what the Identity Theft Resource Center has uncovered about security breaches and the workplace:

1.     According to one study, identity theft cost U.S. businesses and consumers $56.6 billion in a given year.

2.     One expert calculated that the loss or theft of just one laptop can cost a company as much as $90,000 or more in fines, credit monitoring for victims, public relations damage control, and class action litigation.

3.     According to the U.S. Bureau of Justice Statistics, identity theft is now surpassing drug trafficking as the number one crime in the nation.  Further, a preliminary study done by ITRC shows that the majority of identity theft criminals are repeat offenders.

4.     One survey showed that 21 of the top 100 U.S. retail financial institutions reported that 39% of respondents indicated an increase in online banking and bill-payment losses over the past year.

5.     A Zogby study reports that 91% of Americans are now concerned about identity theft and expressed concern that legitimate retailers would sell their information without consent. 83% are specifically worried that information will wind up in the hands of a third party.

6.     In that same study, 34% of respondents did not believe retailers are doing a good job of protecting their personal data, compared to 28% who felt companies protect data adequately.

7.     A Unisys survey reported by Internet Retailer said that 16% of respondents have stopped shopping online because the process requires a bank card, citing fear of card fraud and theft.

8.     The same study reported that 69% of those survey said they would stop using a site that lost their personal information.

9.     According to a Forrester Research study entitled “Calculating the Cost of a Security Breach,” the costs of a data breach vary widely, ranging $90 to $305 per customer record, depending on whether the breach is “low-profile” or “high-profile” and the company is in a non-regulated or highly regulated area, such as banking.

10.  The same study did the math and estimated the cost of a breach at $50 per customer record for the discovery, notification and response that brings in unexpected expenses associated with legal counsel, call centers and mail notification.  It also noted that lost employee productivity would range from $20 to $30 per customer record.

Don’t let your bottom line go up in flames: understand how security breaches impact your business and take aggressive action to avert disaster.