THE MAGAZINE

Quick Bytes: Lost Customers is Biggest Breach Cost

By John Wagley

The biggest data breach cost by far is loss of customer relationships, according to a Ponemon Institute study. Such losses account for 69 percent of breach costs, up from 65 percent in 2007 and 54 percent in 2006.

In 2008, the average abnormal customer churn rate resulting from a data breach was 3.6 percent, up from 2.67 percent in 2007 and 2.01 percent in 2006. Between 2005 and 2008, this particular cost grew by more than $64 on a per victim basis—a 38 percent increase, the study says. Healthcare and financial service companies have the highest average churn rate, with 6.5 percent and 5.5 percent, respectively.

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