The high cost of data breaches just got higher

Companies that experienced a data breach in 2008 paid an average of $6.6 million last year to rebuild their brand image and retain customers. A new study by the 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.

That's a huge cost when you add everything up, and the numbers are just going up, according to Larry Ponemon, the institute's founder. The cost of a breach in 2007 was $6.3 million, and roughly $4.7 million in 2006.

"Some of the best news out of this survey is that churn is really happening," Ponemon told the Washington Post. "People really do care when organizations screw up and lose their data."

The Ponemon cost estimates did not include the effect of a breach on a company's stock price, which in some cases can be substantial. The study also found a change in attitude about data breaches. Companies are more likely to spend money on prevention now than they were in the past.

For more on the cost of data breaches:
- check out this WashingtonPost.com article

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