Corporate data breaches increasingly correlated with consumer fraud reports

Corporate data breaches increasingly correlated with consumer fraud reports

Data breaches are not just a hassle for businesses, but for consumers too, with over 50% of US fraud victims in 2012 arising from a corporate cyber break-in, according to a study by Javelin Strategy & Research.

Fraudsters are improving at mining large data sets at the same time as businesses and institutions of all types are facing an onslaught of data breaches, says Javelin. The Open Security Foundation reports an all-time high of 1611 breaches in 2012, a 48% increase over 2011.

Javelin analysed several data breach case studies, including the South Carolina Department of Revenue (SCDOR) to project the fraud losses to consumers and institutions. As a result of the breach, the Social Security numbers of 3.6 million South Carolinians and 16,000 payment card numbers were exposed.

Javelin estimates the total resulting fraud losses at $5.2 billion for this breach alone, and $776 in out of pocket expenses for each affected consumer that suffers identity fraud.

Al Pascual, senior industry analyst - security, risk & fraud at Javelin comments: "Organisations can promote consumer confidence and loyalty by instituting better protections against the event of a data breach and by mitigating criminals' ability to use stolen data to defraud consumers."

Consumers should also wise up to the risks, says Javelin, with only 20% of people affected by data breaches enrolling in the free identity-protection services offered after the compromise was discovered.

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