03 Feb Data breaches are more costly than ever
Organizations that experienced a data breach in 2008 paid an average of $6.6 million last year to rebuild their brand image and retain customers, according to a new study.
Ponemon Institute, a Tucson based research firm, looked at 43 organizations that reported a data breach last year and found that roughly $202 was spent on each consumer record compromised.
The fourth annual study measured the direct costs of a data breach, such as hiring forensic experts; notifying consumers; setting up telephone hotlines to field queries from concerned or affected customers; offering free credit monitoring subscriptions; and discounts for future products and services.
Following a data breach disclosure, customers who leave one brand for another, known as customer churn, was highest among health care and financial services companies, according to the survey, which found rates of 6.5 percent and 5.5 percent, respectively.