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£47: The average cost of one record lost

A report published by Ponemon Institute, a Privacy and information management research firm and sponsored by encryption specialist PGP Corporation and security outfit Symantec shows that a single data breach for UK companies costs on average £1.4 million.

The study, the 2007 Annual Study: UK Cost of a Data Breach also shows that most of the 'cost' related to a breach is linked to reduced consumer trust and the associated financial impact.

Researchers talked to 21 UK companies and compiled data about how much breaches actually cost them and they found out that on average, the cost of a single record breached is £47, out of which 36 percent is lost immediately after the disaster.

The cost of the breaches and the number of records lost varied greatly; one of the companies surveyed though had lost 125,000 records at a cost of £3.8m.

Ponemon studied customer turnover rates and found out that high customer turnover was a direct consequence of lost records, which results in a decrease in revenues combined with a push for increasing marketing expenditure as breached firms scramble to attract more customers.

ZDnet reports (opens in new tab) that loss of laptops and other devices come on top of the data breach causes followed by loss of paper records, both accounting for 60 percent of cases.

Although encryption would help in the case of loss data, it would have little impact on the cost of recovering the actual missing data.

The report also found out crime-motivated breaches accounted for only 12 percent of breaches with the overwhelming majority caused by human errors.

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.