We have become so accustomed to the ease of electronic records, banking, and information storage, that it’s hard to imagine our lives without it even when there are severe risks like data theft. And while there is a lot of talk about the risk of data theft, few people really believe it will happen to them, and even fewer consider the true cost of such theft. Here we take a look at the hidden cost of data theft:
Data Theft: By The Numbers
Every time data is stolen, it costs the economy $22,346. But in fact, it’s the cost of trying to correct the financial fraud that becomes more expensive than the crime itself. It can take up to 5,000 hours between the consumer, accountants, lawyers, and IRS officials working to try to right this wrong. This is approximately equivalent to two years of full-time work on a per-case basis. Even more disturbing, is that 60% of those who fell victim to medical fraud admitted they didn’t monitor their medical statements to check for discrepancies. Admittedly, this can be a daunting task, only contributing further to the epidemic. It’s just not as simple as coming home and finding your TV is missing. But how do you check and protect yourself against Data theft in its primarily digital realm? Physical locks certainly won’t help you.
In addition, many times, inconsistencies come to light when trying to qualify for a new line of credit. In fact, 47% of victims found problems when trying to qualify for a new loan and 70% of them had difficulty correcting the negative information. But this doesn’t just cost the individual consumer. It is estimated that the IRS will lose as much as $21 billion in revenue over the next five years because of data theft. And across the globe, businesses are expected to lose approximately $221 billion a year. The United States, the United Kingdom, Canada, and Australia have the highest reported rates of fraudulent activity.
The environment also takes a beating with the way our current system works. Since the Social Security Administration was established, more than 435 million cards have been issued. This is equal to 2,175 tons of paper or about 52,200 trees; and with 5 million new cards issued each year, this number will only increase.
As for the idea that digital storage saves on paper costs, worldwide, warehouses storing private information and other digital data, use about 30 billion watts of electricity. This is the equivalent of 30 nuclear power plants. Additionally, U.S. data centers use about a third of this and waste 90% off the electricity they demand from the grid.
Data Theft: The Prevention
So while you may think that identity theft is random and can’t be prevented. Make sure you do all you can to limit your potential losses. Checking your credit reports regularly, choosing strong passwords, and storing important documents in a secure place in your home can all help with this.
However, if you do fall victim, don’t assume that your bank, credit card company, or insurance company will right the wrong without a great deal of legwork on your part. For more information about the true cost of data theft, check out the video: