US Businesses Still Lack Adequate Security to Protect Client Information

U.S. businesses still lack adequate security to protect confidential customer information from a potential security breach. According to a study by the Ponemon Institute, 85 percent of midsize to large businesses spanning all industries have experienced a data security breach in the last 24 months. Nearly half of the incidents were attributed to lost or stolen equipment, such as laptops, PDAs and memory cards. The second largest threat resulted from negligent employees, temporary employees and/or contractors.

But even after a breach, 46 percent of businesses failed to implement encryption solutions on portable devices, according to the survey, which examined the responses of more than 700 U.S.-based C-level executives, managers and IT security officers. Further, more than 80 percent did not seek legal counsel before responding to the incident despite having no prior response plan in place.

"Data breaches are a pervasive problem for most organizations in the United States today," said Larry Ponemon, founder and chairman of the Ponemon Institute, in a release. "We also show that despite negative repercussions in terms of cost outlays and reputation diminishment, many companies that experience a breach do not take appropriate steps to prevent future incidents."

Meanwhile, Robert Scott, managing partner at Scott & Scott, a law firm specializing in IT legal issues and which commissioned the report, said he was particularly alarmed by the fact that most businesses fail to get legal counsel before responding to incidents. "The legal landscape governing data privacy is complex with 35 separate state regulations and numerous federal regulations that may be applicable to a particular incident," he noted in the release.

Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio