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1/4/2011
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Hackers, Insiders Behind Most Identity Theft

Malicious activity topped human error as a cause of the 662 data breaches recorded in 2010 by the Identity Theft Resource Center.

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Data breaches continue to plague businesses. According to the Identity Theft Resource Center (ITRC), in 2010, there were at least 662 data breaches, exposing more than 16 million records. Nearly two-thirds of breaches exposed people's social security numbers, and 26% of breaches involved credit or debit card data.

According to the ITRC's analysis, more attacks result from malicious intent than human error. The leading malicious causes of data breaches were hacking attacks (17.1%) and insider theft (15.4%). "Data on the move -- taking information from the workplace unprotected -- was 16.6% and accidental exposure on Web/Internet was 11%," said Linda Foley, founder and chairman of the ITRC. "Both are totally preventable and should be 0%."

While the above statistics provide insights into the scale and extent of data breaches, the ITRC also cautioned that it's only a partial picture. That's because 49% of organizations that suffered a breach didn't detail the number of potentially exposed records. In addition, many organizations simply don't disclose data breaches.

What counts as a data breach? The ITRC said it defines a breach as any event that puts a person's name, as well as some piece of unencrypted, sensitive information -- a person's social security number, driver's license number, financial details, or medical records -- at risk.

Not all data breaches are digital. In fact, according to the ITRC, "paper breaches account for nearly 20% of known breaches and typically go unnoticed until a consumer reports the problem to local media." In general, it said, companies have no legal requirement to disclose when their paper records have been breached.

In 2010, organizations that revealed they'd suffered a data breach included Educational Credit Management (3.3 million records), AvMed Health Plans (1.2 million), Lincoln National Financial Securities (1.2 million), South Shore Hospital in Massachusetts (800,000), and Ohio State University (760,000).

Other organizations, such as Experian and Home Depot, also experienced data breaches, but didn't disclose the number of people or records affected. As that suggests, legally speaking, data breach notification often remains a gray territory.

Some states, but not all, have data breach notification laws, which require any organization that suffers a breach to notify that state's affected residents. Interestingly, the ITRC found that information about 29% of the 662 reported breaches for 2010 could be credited to authorities in those states. "This is a clear argument for mandatory reporting to achieve transparency for the public," said the ITRC.

The organization also renewed its call for a single, nationwide clearinghouse of data breach information. "It should be comprehensive enough to allow readers to find out what happened, what information was compromised, and why the breach happened," said the ITRC. "This would also allow law enforcement to better address this type of crime."

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