Data breaches are unfortunately becoming an inevitable part of life. In addition to the IT headaches, reputational risk and customer churn associated with a breach, the monetary costs are also a huge concern. A recent article by CNBC states that a huge data breach last year in Utah will cause more than 120,000 cases of fraud which in turn results in more than $3,300 in losses for the victim. These breaches are even more costly to banks and businesses as they are obligated to compensate the victims affected by the breach.
Here are a few examples of recent data breaches that have proven to be extremely costly:
Incident: A group of sophisticated hackers gained access to first and last names, social security numbers, and dates of birth of over 125,000 students who attended Kirkwood Community College from February 2005 through April 2013.
Cost: Kirkwood Community College hired Kroll Security at a cost of $350,000 to help notify students of the breach and offered one year of credit monitoring. This cost could rise as more students seek assistance to deal with the breach.
March 2013: Salem State University in Salem, Massachusetts
Incident: Computer servers at Salem State University were infected with a virus that potentially compromised 25,000 personal records of current and former employees.
Cost: Salem State University has offered to compensate each person affected with one year of ID protection through Experian Credit Report Service at a cost of $750,000.
Incident: Hackers attacked two servers at the UNC Cancer Center in North Carolina, which compromised the personal data of 3,500 people. The information accessed includes social security numbers and passport numbers for employees, contractors and visiting lecturers at the center.
Cost: UNC notified victims and offered free credit monitoring. They have not released a cost for this particular incident, but a similar incident occurred in 2009, resulting in a cost of $250,000.
It’s devastating to be notified that your information has been exposed at the fault of a university, health center or business. What is even more alarming is that there is not much you can do prevent it as it is up to the organization to protect their data. Fortunately, the incidents described above show that organizations are willing to help compensate victims and help prevent further fraud with free credit monitoring. However, the obligation to compensate victims can severely dent a business’ budget and may result in closure.
Have you had information stolen as a result of a breach? What were the costs to you or your business? What additional preventative measures should companies take to reduce the risk of breaches and the resulting cost?
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