Data breaches can have unexpected, expensive consequences

Mar 06th, 2013 / Category: Managed File Transfer


No company wants to experience a data breach - this much is obvious. As is well-known by now, data breaches can have a major impact on businesses. Perhaps most notably, a firm which experiences a data breach will likely see its reputation suffer, and will quite possibly receive serious fines from the federal government or other regulatory bodies. Depending on the nature of the data exposed and the consequences of the event, a business may also eventually face lawsuits from affected individuals.

As serious as these consequences are, they do not represent the total effects that an organization may experience in the wake of a data breach. In many cases, such an incident can have far-ranging, costly, difficult-to-predict effects, which is all the more reason why firms of all kinds should invest in secure file sharing technology.


Manning the phones
One example of these additional effects can be seen in the recent experience of the Canadian federal government. In November 2012, an employee with Human Resources and Skill Development Canada (HRSDC) lost a hard drive containing personal information for nearly 600,000 loan recipients. This data included names, addresses and social insurance numbers.

The breach was announced on January 11. In response to the incident, the Canadian government created a toll-free phone number which people could call if they were concerned about how the data breach may affect them. The phone number was maintained by a private call center firm, according to Postmedia News.

According to the news source, in the period between January 14 and January 23, approximately 100,000 individuals called this phone number. HRSDC spent more than $570,000 for the call center's services in this time.

Additionally, the news source noted that the total number of calls had doubled by the beginning of March. The HRSDC has not released updated cost totals.

Protecting data, saving money
As this incident has demonstrated, there are often significant indirect costs to data breaches, especially as organizations take steps to recover from the breach itself and prevent additional incidents. And while this particular incident concerned a lost hard drive, similar outcomes can result from inappropriately shared emails, hacked servers and more.

It is therefore imperative for firms of all types to take all possible steps to protect their information. For example, government agencies should consider investing in secure, enhanced managed file transfer (MFT) solutions. With such a resource in place, files can be sent to external and internal sources easily and without risk that the information contained will be exposed at any stage.

The quality and nature of these types of solutions varies greatly, which means that organizations must be careful when making a selection. Firms should make sure that the option they settle on is both comprehensive and, critically, easy to use. Without this last trait, employees may not commit to the technology, choosing instead to use simpler, less secure methods.