Study Finds Business Cybercrime and Cyber Losses Are Soaring: Is Your Customers’ Sensitive Information Secure?

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Do you know what could happen to your company if your customers’ sensitive information ended up in the hands of cybercriminals?

All it takes is one hacker or one virus to invade your network and cause a data breach that could lead to catastrophic losses. Unfortunately, many business owners are still operating under the mistaken assumption that their business insurance policy covers the costs associated with damages from a data breach. By the time they find that out that’s not true, it could be too late.

Cyber Attacks Against Businesses Are Happening Like Clockwork

The 2012 Cost of Cyber Crime Study conducted by the Ponemon Institute and commissioned by HP found that cyber attacks against businesses are occurring with a frequency that’s mind boggling.

It reported that there were an average of 1.8 successful cyber attacks per week against each of the 56 companies from all sectors that were in the study. And the cost of those attacks rose 40% between 2010 and 2012.

Ponemon found that the most costly cybercrimes continue to be those caused by malware, hijacked or stolen devices, denial of service and rogue employees – accounting for 58% of the organizations’ annual cybercrime costs. Even more alarming: The average annual cost of cybercrime for U.S. organizations was $8.9 million in 2012. And the average cost during the 24-day period to resolve the cyber attack was nearly $592,000 – a 42% increase from the previous year.

Recovering from Cybercrime Is More Costly for Small Businesses

Cyber liability exists when companies collect, store and share consumer information. So any company that has a website or an online presence, conducts business on the Internet, stores customer/employee information electronically or processes electronic payments is at risk. Small and medium-sized companies are just as attractive, if not more attractive targets to hackers than large companies, because their networks are often not as well protected.

The Ponemon study also found that smaller organizations incur a significantly higher per capita cost to recover from cyber attacks – $1,324 versus $305 for larger organizations.

Hotspots Are Weak Spots When It Comes to Exposing Business Data

The largest cyber losses occur when businesses unknowingly make it possible for hackers to access to their customers’ sensitive information that can be used to commit identity fraud. Not surprisingly, public Wifi hotspots are a major gateway for cybercriminals to do just that.

Many businesses allow their employees to put documents or files into a shared folder on a computer that anyone connected to the network can access. If those files are on a laptop or other mobile device that an employee uses away from the office, and no file sharing restrictions have been set, they will be shared with users of any network they connect to. If that network isn’t secure, which is the case with virtually all public Wifi hotspots, those files are fair game for hackers.

VPNs Are a Cost Effective Way to Protect Confidential Customer Data

Companies can use a corporate virtual private network to connect computers in different locations to the same network via the Web. VPNs ensure that the data they share with their offices in other locations is encrypted and secure.

Corporate VPNs also allow employees to connect to public Wifi networks and transmit data securely to their offices. Unfortunately, to save time when they’re out of the office, employees don’t always use their company VPNs to hop on the Internet at hotspots.

Many smaller companies don’t have the IT resources to have their own corporate network or maintain a corporate VPN. And many of them encourage their employees to use their own mobile devices for work as a way to improve productivity and control costs.

If employees access unencrypted confidential customer data at Wifi hotspots and it’s intercepted by hackers, they could end up exposing their company to huge cyber liability costs. That’s not an unlikely scenario.

The Ponemon Institute’s 2012 Global Study on Mobile Risks found that more than half of the 4,600 IT security practitioners surveyed in 12 countries reported data loss resulting from employees using unsecured mobile devices.

Remember, all security breaches result in damages. It’s just a question of how large those damages will be. Cyber security laws require companies to notify customers immediately when a data breach occurs. If they fail to do that, they face stiff penalties and fines. Both can end up costing your company a bundle.

Cyber insurance can help limit your losses when a data breach occurs. But you could still end up losing your customers.

That’s why the best insurance against cybercrime is prevention. At public Wifi hotspots, that means using a virtual private network solution like PRIVATE Wifi™ to encrypt the data travelling to and from your employees’ laptops. That makes it invisible to hackers. So your company’s business will be no one else’s business.

 

Get Private Wifi   Protect your personal information.
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Jan Legnitto

Jan Legnitto is an investigative journalist and documentary producer who writes about criminal justice and intelligence issues. Jan is also a frequent contributor to the Private I blogs.