Security breaches soar in US

Some 90 per cent of US companies reported some form of security breach last year, costing them $265m, according to FBI figures.

Loss of customer goods accounts for 29 per cent of these costs, while loss of staff time accounts for 22 per cent, money loss 23 per cent and loss of revenue 18 per cent.

The figures are revealed in the ePrivacy & Security Report, published this month by researcher eMarketer, which includes data from various sources showing how privacy and security issues impact companies and their customers.

Hacking is growing at an alarming rate, with the number of reported hacking incidents increasing from 4942 in 1998 to 17,672 in 2000, according to the Computer Emergency Response Team, a federally funded centre for the study of internet security vulnerabilities.

FBI data for 2000 shows that viruses ar top the range of reported breaches experienced by some 85 per cent of companies, followed by 79 per cent reporting employee abuse of the internet. Unauthorised access by outsiders was reported by 71 per cent of companies, and denial of service by 27 per cent.

Chris McNab, network security analyst at MIS Corporate Defence Solutions, said the UK will "reflect a similar pattern to the US", but added that "our figures could be worse because we are behind the US in terms of information security".

McNab said those crimes such as website vandalism and denial of service attacks impact so heavily on costs because they are bad for corporate image.

"For companies with a heavy internet presence, branding is very important, and if it is damaged they lose customers. It's a downward spiral - stocks drop and people take business elsewhere."