Monday, April 4, 2011

Over the weekend hackers gained access to email address information that a Dallas Based company called Epsilon had access to. They provide an email service for such companies as: Chase, Citi, Best Buy, Walgreens, Kroger and many others.

The email addresses will most likely be used to try and solicit personal information from the receiver. Information like login passwords so that the sender can gain access to the real account.

The economic ramifications from this could be tremendous. First the cost of internal investigations within each company, the investigations that will be done by law enforcement, then if people really give out their information and people gain access to bank accounts and social security numbers, the identity theft percentage will skyrocket.

According to the U.S. Government Accountability Office, the estimated losses for domestic companies affected by cyber crime is $67.2 billion annually. The targeted firms also suffer in the stock market days after an attack with shareholder losses of 1 percent to 5 percent. Percentages like these might seem small, but for the average company on the New York Stock Exchange, it can translate to $50 to $200 million in shareholder losses. This is where company losses begin to affect the consumer, causing a bleed-through effect to all levels of the economy.


Smith said...

Good analysis. Since cybercrime is the cause of huge impact on the economy should the government come out with more strict regulations? If so, what would you suggest?

Payne said...

I was not aware that cybercime was such a large issue. Although you said that companies lose about $62 billion a year, cybercrime keeps law firms in business. But I'm sure the negatives heavily outweigh the positives.

sarah said...

Cybercrime also keeps internet detectives in business. Police departments hire computer tech guys to track these hackers and catch them so things like this don't happen. I agree with Payne, the negatives do heavily outweigh the positives. I don't see many good things coming from this, especially since it costs companies millions and/or billions of dollars every year.