Over at Emergent Chaos, Adam raises the question of whether we are seeing more data breaches, or just more data breach reporting. His post is inspired by a release from the Identity Theft Resource Center stating that they’ve already matched the 2007 breach numbers this year.

Personally, I think it’s a bit of both, and we’re many years away from any accurate statistics for a few reasons:

  1. Breaches are underreported. As shown in the TJX case, not every company performs a breach notification (TJX reported, other organizations did not). I know of a case where a payment processor was compromised, records lost for some financial services firms that ran through them, and only 1 of 3-4 of the companies involved performed their breach notification. Let’s be clear, they absolutely knew they had a legal requirement to report and that their customer information was breached, and they didn’t.
  2. Breaches are underdetected. I picked on some of the other companies fleeced along with TJX that later failed to report, but it’s reasonable that at least some of them never knew they were breached. I’d say less than 10% of companies with PII even have the means to detect a breach.
  3. Breaches do not correlate with fraud. Something else we’ve discussed here before. In short, there isn’t necessary any correlation between a “breach” notification and any actual fraud. Thus the value of breach notification statistics is limited. A lost backup tape may contain 10 million records, yet we don’t have a singe case that I can find where a lost tape correlated with fraud. My gut is that hacking attacks result in more fraud, but even that is essentially impossible to prove with today’s accounting.
  4. There’s no national standard for a breach, never mind an international standard. Every jurisdiction has their own definition. While many follow the California standard, many others do not.

Crime statistics are some of the most difficult to gather and normalize on the planet. Cybercrime statistics are even worse.

With all that said I need to go call Bank of America since we just got a breach notification letter from them, but it doesn’t reveal which third party lost our information. This is our third letter in the past few years, and we haven’t suffered any losses yet.