Data Breach - Your Organization Needs A Plan

The Privacy Rights Clearinghouse's Chronology of Data Breaches lists 3,671 incidents affecting 607,295,463 records since 2005,1 including these three:

A worker steals customer records containing credit card, bank account and other personal information. In its U.S. Securities and Exchange Commission filing, the company estimates that 8.5 million records are affected. A password-protected laptop containing former employee names, Social Security numbers, birthdates, and benefits information is stolen from a consultant's trunk with an estimated 5,800 records affected. Cyber-pickpockets tamper with PIN pads in retail stores and steal banking information from checkout keypads. Ninety-four thousand records are affected. Taking steps to protect personal information can go a long way to preventing a security breach. No technology is failsafe, however.

Today most companies come in contact with or store personal information. This is not only the domain of large organizations, relatively small ones face potential liability should personal information be compromised in a security breach of the organization's computer systems. The potential for disclosure of personal information exposes all organizations to potential liability for damages and the cost of breach notification and remediation.

The most recent Ponemon Institute Cost of Data Breach Study reports that whether the result of lost laptops, misplaced thumb drives, malicious software, or system glitches, data breaches carry very serious financial consequences — costing on average a breathtaking $5.5 million per data breach — or $194 in direct and indirect costs per record compromised.2 Forensic experts, outsourcing hotline support, free credit monitoring subscriptions and discounts for future products and services account for one-third of the $194 per record cost of a data breach. Loss of reputation, damage to brand, and the cost of in-house investigation and communication account for the other two-thirds. Senior level managers estimate that it can take a year to restore an organization's reputation after a data breach involving 100,000 customer records that is reported widely in the media.3

To manage reputation, contain costs and business disruption, and stay within the law, your organization needs a plan. Four factors drive up the cost of a data breach: inexperience, involvement of third party providers, data breaches involving mobile devices, and quick notification of breach victims.4

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