Data breach costs soar

Punters desert compromised firms

By John Leyden • Get more from this author

Posted in ID, 29th November 2007 17:20 GMT

Free whitepaper – Certify your software integrity with Thawte code signing certificates

There's more bad news for chancellor Alistair Darling in the wake of the HMRC data loss fiasco. A study by the US-based Ponemon Institute reckons information security breaches cost $197 per compromised record, compared to $182 per record last year.

Ponemon's third annual Cost of a Data Breach study focuses on the results of data breaches in 35 US organisation during the study period. A report focusing on UK organisations is due out in January.

The study attempts to estimate the cost of legal fees, call centre costs, lost employee productivity, regulatory fines, loss of investor confidence, fees from security consultants and customer losses associated with customer data information security breaches. Ponemon estimates the average cost per incident in the 35 US cases it studied was $6.3m in 2007, compared to $4.8m in 2006. It reckons lost business makes up two-thirds of these estimated losses, or $4.1m per incident in 2007, up 30 per cent on 2006.

Third parties - such as outsourcers, contractors and business partners - were blamed for 40 per cent of the security incidents analysed by Ponemon this year, up from 29 per cent last year. ®

Free whitepaper – Avoiding 7 common mistakes of IT security compliance