More than half of small U.S. businesses surveyed by the Ponemon Institute were found to have experienced at least one data breach in the entire span of their operations, but only a third notified customers of the situation.
“Smaller companies are targeted by data thieves, but they often don't know how to respond when sensitive information they keep on customers and employees is lost or stolen,” says Eric Cernak, vice president for Hartford Steam Boiler, in a statement. “Failing to act in a timely and effective way can harm the reputation of businesses and even risk legal penalties in many states.”
The top three reasons why small businesses aren't reporting breaches “are because many do not know that state laws regulating their disclosure exist, some companies erroneously think that the laws only apply past a threshold of amount of data stolen, and they may believe that if they don't report the incident, no one will find out,” Cernak tells PC360-NU.
He continued, “If you provide notification services to the people affected and maintain a good reputation with those folks, more often than not, the state attorney general is not going to come knocking on your door unless you're a repeat offender.”
The Ponemon Institute, an independent organization that researches information security, studied data breaches of companies with revenues below $10 million on behalf of The Hartford Steam Boiler Inspection and Insurance Company (HSB), part of Munich Re.
Of the organizations surveyed, 55 percent of which experienced one breach incident involving electronic records and 53 percent of which experienced multiple breaches, only 33 percent overall complied with the 46 state laws requiring that individuals be contacted when their data is exposed.
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