This article was published in Info4Security
By: Brian Sims
Shredding confidential data is the best way for businesses to stay safe from identity fraud, according to experts from data destruction concerns Shred Easy and Shred-it.
A recent survey by the Association of Chief Police Officers revealed that £20 billion is lost every year through weaknesses exploited in information security. At the same time, companies House states that between 50 and 100 cases of corporate identity fraud occur every month.
Shred Easy, one of the UK's biggest confidential data destruction companies, is urging businesses to step up their security during the recession. Jim Watson, the company's managing director, has this to say on the matter.
"Businesses are risking millions by having no confidential data policy in place. Fraud against businesses is rising and will continue to do so during the recession. Companies which protect themselves now will weather the storm of this increase in fraud."
Watson continued: "Creating or updating a confidential data policy must be a priority for businesses as we move deeper into recession. It's not just confidential paper documents that need to be securely destroyed, but also computer hardware such as disk drives and data sticks."
In conclusion, Watson told SMT Online: "With little knowledge or effort, a fraudster can change the registered office of the business, trading address and even names of directors. Companies with a good trading record are then vulnerable if orders for expensive goods are placed and not paid for."
Shred Easy has produced its Top Ten Tips that will help companies to fight business fraud:
In the current economic climate, companies are increasingly being pushed to do more with fewer resources. However, Shred-it - another of the UK's leading document destruction concerns - feels that, as budgets are cut, many UK businesses may be making themselves more vulnerable to security risks that go hand-in-hand with economic instability.
During the credit crunch, fraudsters are taking advantage of economic confusion and anxiety to target both consumers and businesses. The public sector's data handling practices have come under intense scrutiny in recent times following a number of highly publicised security breaches.
Robert Guice, senior vice-president of Shred-it in the UK, warns that many UK companies are not learning from these high profile losses. "With all businesses increasingly under pressure to reduce costs during these economically testing times, it seems that many are overlooking the importance of protecting their confidential information and that of their customers, unaware of the hidden costs that can ensue from data breaches," said Guice.
"If your business is unfortunate enough to suffer a security breach, the real costs associated with the loss will far outweigh any savings made by cutting back on secure data management. The biggest cost comes in the form of irreparable damage to the business' reputation."
Recent research from the Department for Business, Enterprise and Regulatory Reform reveals that the average total cost of a UK company's worst security breach can total between £10,000 and £20,000, with associated costs increasing according to the size of the company. For large businesses (ie those with more than 250 staff), the figure lies between £90,000 and £170,000, and for very large businesses (more than 500 staff), security breaches can cost between £1 million and £2 million.
When incidents become known about externally, the survey revealed damage to reputation could cost large businesses between £30,000 and £250,000.
Outsourced document destruction services
Guice added: "During the downturn, when productivity is paramount, many businesses are reluctant to free up staff time to shred documents, so that they can focus on fee generation, not administration. However, by employing outsourced document destruction services, companies can boost the security of their business' and customers' information so they can effectively maintain the trust of their customers, facilitate regulatory compliance and keep their reputation intact."
In conclusion, Guice stressed: "Even for companies that already handle their data management in-house, cost savings can be achieved through outsourcing their document destruction. We have found that organisations both large and small can achieve a 17% productivity saving when using a professionally-managed document destruction service as compared to shredding in-house."