IT Security & Network Security News & Reviews: Fixing Data Breaches: Tracking the Cost and Damage Toll

By Fahmida Y. Rashid  |  Posted 2011-03-14 Print this article Print
Total Cost: $7.2 Million

Total Cost: $7.2 Million

The total cost of a data breach has gone up 7 percent to $7.2 million. This includes cost of investigating and resolving the breach, notifying affected individuals, covering remedies such as credit protection services, and paying fines in a regulatory environment.
The average cost of a data breach keeps going up for the organizations that have to clean up the resulting mess. The costs rose to more than $7 million in 2010, compared with $6 million in 2009. There are other factors in place that can make the data breach more expensive, such as rate of response (apparently slow is better), number of compromised records (size matters), industry sector (communications, financial and pharmaceuticals), type of breach (criminals are expensive) and whether it was the first time. According to Ponemon Institute's sixth "Annual Study: U.S. Costs of a Data Breach," companies are moving faster to notify affected users, which in turn makes customers more nervous and often prompts them to leave. What's worse, responding quickly means organizations are likely to rush through the investigation and over-notify to be on the safe side, which will cause even more customers to panic and leave. Organizations should be prepared with a strategy and proper forensics tools to conduct a thorough investigation, know the exact compliance requirements, and resist the urge to err on the side of caution. Know the extent of the breach before taking action, the study recommends. The following are some numbers from the Ponemon Institute study about data breaches in 2010.

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