The average cost to businesses of data security breaches
has increased by nearly a third in just a year, new figures have
shown.
Data breaches involving information personally identifying
individuals cost firms an average of $182 for each compromised
record in 2006 – up 31% on the cost in 2005, a study of 31
incidents by the Ponemon Institute think tank found.
Ponemon Institute chair Larry Ponemon warned, “Tough laws and
intense public scrutiny mean the consequences of poor security are
steep and growing steeper for companies entrusted with managing
stores of consumer data.”
The total costs of the data breaches ranged from under $1m to
more than $22m, according to the research, co-sponsored by security
software firm PGP and data loss prevention company Vontu.
The study calculated costs based on a range of factors including
legal, investigative and administrative expenses, stock market
performance, loss of customers, opportunity loss, damage to
reputation and costs associated with customer support, such as
information hotlines and credit monitoring services.
