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CYBERSECURITY VIOLATIONS MULTIPLY, SAYS FBI

Posted on April 11, 2002

      The vast majority of American businesses -- 90 percent -- have suffered computer security breaches in the past year, according to a joint study by the FBI's Computer Intrusion Squad and the Computer Security Institute (CSI) released earlier this week. Results also indicate that although a wide cross section of organizations--from financial institutions and hospitals to government agencies and universities--are victimized by hacking, only 34 percent report it to authorities.

      Industry experts expressed little surprise at the report's findings.

      "(These figures) follow a trend that we have observed for quite some time," says C.L. Staten, executive director of the Emergency Response & Research Institute in Chicago. "If anything, the situation is still probably vastly underreported." Staten explains that many companies are reluctant to admit that they have been victimized by cybercrime, because they fear potentially adverse effects of negative publicity on customer relationships and financial stability. "Corporations want confidentiality before they will share hacker data with law enforcement," he says.

      The financial toll of e-security violations is also mounting. The FBI/CSI annual appraisal revealed the overall cost of cybercrime rose 20 percent in the past year, from $377 million to $455 million. Of the 503 organizations polled, the average loss per respondent ranged between $243,000 and $283,000.

      Despite the fact that virtually all institutions surveyed utilize antivirus software, and more than half--60 percent--have an IDS in place, electronic breaches such as theft of proprietary information, financial fraud and viruses continue to proliferate. "Even the military has reported dramatic numbers of hack attacks in the past year," says Staten.

      CSI Director Patrice Rapalus says, "Hopefully a greater appreciation for security, post-9/11, will translate into increased staffing levels, more investment in training and enhanced organizational clout for those responsible for information security."

      The report shows one hopeful sign: there was a 9 percent drop in virus and worm incidents. Despite the decrease, the financial fallout from last year's malware rose by $4.6 million, to a total of $49 million.

      "This problem will continue until positive steps are taken by legislation to shield corporate cybercrime reporting from general public disclosure," says Staten.

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