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Latest Survey Exposes Spiraling Cost of Data Breaches

Theft of private client information such as the one notified by the retail stores T.J. Maxx and Marshall in 2007 might be more common than imagined.

Around 85% of security experts of various North American firms admitted to have suffered more than one notifiable loss or disclosure of private data over the last one year, spanning from December 2006 to November 2007, states the latest report issued by the research organizations Deloitte & Touche LLP and Ponemon Institute in the end of December 2007.

The study also reveals that 63% of the total analyzed privacy and security experts had reported several incidences of infringement of confidentiality, somewhere around 6 and 20 violations - during the similar timeframe.

As per the study, one of the main matters impelling the steady increase of information breach rectification overheads is the approximate cost of lost business together with alleged client churn caused by the announcement of these events.

Ponemon revealed that the result of customer churn and the total sum required to get new business was around $128 for every lost or robbed data in 2007, or approximately a 30% rise over the amount of $98 for every record issued in the survey conducted earlier in the year 2006.

Ponemon study also confirmed rising incidences of financial data breaches by third-party associations like outsourcers, experts and contractors. All such breaches that were notified by 40% of the reviewed firms accounted for almost twice the total number of breaches occurred in 2005.

With reference to vertical bias, Ponemon alleged that financial services firms are experiencing the main crunch due to these violations, grounded primarily on client belief that such firms must do a better task of defending their information than any other kind of business, including retailers.

But according to Ponemon Institute's Chairman and Founder, Larry Ponemon, the loss or pilferage of any private information is a common trouble faced by all firms, including government organizations also, as reported by Seatellepi on December 25, 2007. Several firms have enhanced their capability to respond to these incidences and have decided to plan beforehand and tackle the situation.

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