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Average Cost of a Data Breach Increases 2.5%

The total average cost of a data breach last year reached $202 per record, a 2.5% increase since 2007, a study published Monday revealed.

The study was conducted by the
Ponemon Institute LLC , a privacy and data-protection research group, and PGP, a data-encryption vendor. It was based on the costs incurred by 43 organizations following actual data breaches.

According to the report, the total average cost per company surveyed was more than $6.6 million per breach, up from $6.3 million in 2007 and $4.7 million in 2006. The highest reported total cost among the 43 respondent organizations was $32 million.

Of the average $202 per record cost, $139 was attributable to lost businesses as a result of the breach. As a percentage of the total cost per record, that represents 69%, which is up from 67% in 2007 and 54% in 2006. Customers, it seems, lose faith in organizations that can't keep data safe and take their business elsewhere.

"This finding reinforces the message delivered by leading enterprise IT managers and industry analysts that organizations must focus on proactively protecting their data instead of relying exclusively on written policies, procedures, and training," the report says.

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