IBM spokesperson Fred McNeese was nice enough to call me up and ask for a clarification. He has my apology.
Here's what I said earlier...
To recap, a contractor with IBM is flying down the highways of Westchester County, N.Y, when at the intersection of Interstates 287 and 684, he realizes that he's missing some data tapes that were being delivered to a long-term storage facility.
These are not your run of the mill 8-track tapes or cassette tapes. These are mainframe and tape storage wheels with names, addresses, birth dates, Social Security numbers, and beginning and end dates of employment for some current and former IBM-ers. It's bad enough that the tapes are lost. It's worse that the event happened back in late February and IBM and local officials have turned up nada. What really got me, however, was the reward to anyone whose data was on those tapes:
"IBM is offering those affected by the loss a free year's worth of credit monitoring."
Wow... you have got to be kidding me. That's it? No cash equivalent value? Just a year of free credit monitoring? Come on, I can get a free credit report now from Experian, Equifax and TransUnion thanks to sites like AnnualCreditReport.com.
If I was an average Joe walking around Brewster and came across a box of data tapes, would I trade it into IBM for a year of credit monitoring? I certainly think not. Would you?
Let's do the math.
According to Forester Research, the average security breach can cost a company between $90 and $305 per lost record. Let's say that contractor for IBM had a dozen tapes in his vehicle and each tape contained only 100 employee records. The street value those lost data tapes would be $1,200 per tape or somewhere between $108,000 and $366,000 for the whole box. That's considering the tapes would be returned to the rightful owner (IBM) and not sold online through some sort of eBay auction or Craigslist posting.
I would consider your average Joe in Brewster a very honest and moral person, someone who would never consider selling someone else's property for his own gain. But let's be honest here, even if Joe does the right thing, he'd have to expect IBM -- a company that posted $22 billion in revenue in the first quarter of 2007 -- to pony up something more than a free year's worth of credit monitoring.
Even more absurd is that this is the same compensation that the U.S. Department of Agriculture (USDA) offered to farmers in April when it admitted that it exposed 26-years worth of their Social Security numbers and Tax ID numbers thanks to a publicly available database.
A year of free credit monitoring? It boggles the mind.
If corporations and governments expect the public to be virtuous when it comes to helping clear up egregious mistakes and security losses, perhaps they should expect to make it worth our while.
I may be wrong here, but I'm pretty sure it's all about the Benjamins.
Again, my apologies to anyone who misunderstood the original post (like me).