Fergie's Tech Blog

Security Breaches Cost Businesses Customers

Jeremy Kirk writes on PC Advisor:

Companies that have lost sensitive data are being shunned by consumers, according to a new study.

The Ponemon Institute, which studies privacy procedures in companies and government organisations, studied 43 US companies that lost sensitive data last year. The research revealed that on average, it cost the companies $202 (£141) for every data record lost in 2008. That's compared with $197 (£138) in 2007, $182 (£127) in 2006 and $138 (£96) in 2005, the first year the study was conducted.

Factored into those figures are how much companies spend on detecting data losses, costs incurred notifying victims and hiring forensic experts and paying for free credit checks for affected consumers, among others.

The most costly factor, however, was loss of business. Of the $202 (£141), $139 (£97) represented the cost of lost business, up 69 percent over 2007.

"The growth in lost business costs demonstrates consumers do not take a breach of their trust and privacy lightly and have not become desensitised to the issue," the study said.

posted by Fergie @ 7/29/2009 05:29:00 PM