Annual Cost of ID Theft and Data Breaches in U.S. Reaches $25 Billion

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After a string of high-profile data breaches and cyber thefts this past year ranging from the tens of millions of compromised credit cards swiped at Target to the 145 million user accounts at EBay more and more companies are beginning to take cybercrime more seriously. Large firms are investing more into their IT security protections and even colluding with each other to help facilitate the sharing of relevant and useful information and awareness.

The Internal Revenue Service (IRS) is also making identity theft a priority, investigating and rejecting hundreds, if not thousands, of fraudulent tax returns filed each year, while releasing several reports to the public about the safest practices for keeping your personal information away from prying eyes during tax season. The Federal Trade Commission (FTC) has also been very open about the threat posed by theft of identity to the average American.

What was once regarded as a mere nuisance is now ranked as the fastest-growing crime in the United States, and in the last year topped the FTC’s list of most frequently cited consumer complaints. But despite the new steps being undertaken by both private companies and federal agencies to curtail the wave of ID theft cases, hackers and other cybercriminals adept at compromising online accounts and stealing personal data continue to stay one step ahead. Even worse, these perpetrators are shifting their focus to bigger targets, with costlier consequences.

According to ABC News, the grand total cost of U.S. data breaches in 2012 was an annual sum of $25 billion. This figure is rooted in not just stolen and subsequently sold assets, but also related cyber and identity protection services, as well as hampered consumer confidence impacting revenue. As the retail chain Target learned all too well this past December, after falling victim to one of the largest data breaches in U.S. history, news of stolen credit and debit cards deters both existing and prospective customers, which in turn deflates profit margins.

The news outlet also found that five of the top 10 hacks ever committed have occurred within just the last three years. This is definitely a disconcerting trend that seems to highlight that, just as potential victims are ramping up efforts to protect themselves, the criminals themselves are also setting their sights on bigger prizes-with very successful results.

A new study conducted by the New York State Attorney’s Office found that the frequency of data breaches in New York alone skyrocketed between 2006 and 2014, from just 34 cases at the beginning of the eight-year period to over 400 cyber thefts in 2011, representing a 100 percent jump. And across the country, over 7 million people had their personal records compromised by ID thieves in 2013.

“I think there is no question that the problem is getting bigger, it is expanding,” Cushman and Wakefield risk management president Ray Kelly told ABC News. “It is a major problem that will only increase in complexity and expense.”

Luckily, there are measures that customers can take to reduce their chances of having their personal and financial data taken by opportunistic cyber thieves. Investing in a password management system like SafeConnex can help protect the passwords to your many online accounts from hackers, sheltering them in a convenient and easy-to-reference password vault.

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