Companies want you to cover the cybersecurity check

Consumers are paying the costs of company data breaches. (Image: EC Council-Cybersecurity Exchange)

Does anyone still write their passwords down in a secret notebook? Nope? Just me? Before you laugh at my grandma self, reader, I regret to inform you that my compulsive tendencies win the day. 

Sure, cloud technology seems to marry convenience and cybersecurity in ways that make the modern day-to-day much simpler. But as data breaches are costing tech companies buttloads of cash, you—the average consumer—are paying the price for this very convenience. Literally.

Before we dive into how companies are making you cover the cybersecurity check, we need to understand how it got so expensive in the first place.

Running up the data tab

A data breach is exactly what it sounds like. It’s an incident wherein information, often digital, is taken from a system without the authorization of the system’s owner. The types of data that can be stolen can include sensitive, proprietary, or confidential information. Anything from passwords, credit card numbers, trade secrets, or even matters of national security are usually uploaded to the cloud, meaning it’s accessible over the internet, plus the software and databases that run on those servers.

Today’s average data breach can cost a company an average of $4.35 million, which is a big leap from the $3.86 million price tag it had just two years ago. There’s a long list of things that makes the grand total of the cybersecurity receipt so big.

For one, customer records are the most expensive and most frequently compromised in data breaches. When personally identifiable information is leaked, hefty lawsuits are sure to follow. 

And while the media tends to focus on customer data loss, stolen intellectual property can also devastate company revenue. Trademarks, patents, copyrights, and trade secrets can make up 90% of a company’s value, hence the appeal of commissioning cybercrime groups to steal competitors’ IPs. 

Ransomware also significantly racks up the total. This malware intentionally blocks access to one’s computer, demanding a ransom payment in return for access. This cyberattack can cost a company an average of $150,000. And if that wasn’t enough of a financial headache, data-compromised companies have to deal with lost business and reputation damage, which can take on a whopping 40% of the fees.

Passing on the tab

While it has only been highly suggested thus far that companies make customers cover cybersecurity costs, some organizations have fessed up.

According to a study conducted by IBM, 60% of the surveyed companies that fall victim to data breaches pass on the tab to their customers. They do this by hiking up product and service prices conveniently after costly data breaches. Which makes you wonder how often this happens, given that eight in 10 organizations have faced a data breach at least once during their existence.

And while these reports are too afraid to name-drop the actual companies (as pointed out by numerous users), there’s room for speculation for companies that follow this MO.

For instance, Netflix was recently fined $180,000 by the South Korean government for privacy violations. Four months later, the media company alerted subscribers of impending price increases by as much as $2 per streaming plan.

Some tech companies find loopholes to capitalize on their customers’ private data while hiding behind the guise of added security. Back in 2019, Twitter was caught selling data provided by the two-factor authentication feature to marketers for ad targeting purposes. Meanwhile, companies like Uber try to sweep their security lapses under the rug by paying off the hackers $100,000 to delete the data.  

Most recently, the Securities and Exchange Commission charged investment management firms JPMorgan Securities, UBS Financial Services, and TradeStation Securities with deficiencies in their identity theft prevention systems (i.e., systems that are supposed to prevent fraudsters from opening bank accounts in their victims’ names). That’s another case of institutions risking their customers’ data protection just to skip out on financing cybersecurity infrastructures.

A world with no clouds

It seems to be the age-old question of whether technology or humankind is to blame. Cloud technology has massively changed modern-day dealings and operations. Even the most digitally defiant person has had a run-in with this tech feature, whether it’s backing up photos, sharing documents, or creating online accounts.

Eventually, all of our day-to-day files could be stored in the cloud. So shouldn’t companies protect the spaces we trust with our information? What’s another couple thousand dollars for beefing up security compared to the millions’ worth of damage control and reparations? 

At the end of the day, when companies cut corners on cybersecurity, it’s their customers who have to pay the ultimate price.