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.