Recession linked to rise in data theft

Study shows corporate data theft is now twice as prevalent than it was in 2006

19 May 2009 09:17

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Businesses have been warned to protect their confidential information after a study found that instances of corporate data theft have doubled since 2006.

The research, conducted by law firm Mishcon De Reya and business advisory firm KPMG, found that there were twice as many cases of data theft in 2008 than there were in 2006.

The study pointed to the economic downturn as a key driver to the increase in the internal threat posed by former employees.

Dan Morrison, a partner in Mishcon De Reya's fraud & insolvency group, said that with redundancies on the rise and increasing job insecurity, disenchanted and anxious employees were more likely to use confidential information from their previous employer for self-preservation, to give them an edge in the job market.

“History tells us that in difficult economic times, incidents of dishonesty rise,” Morrison said.

“The theft of sensitive and confidential information from businesses is happening right now all over the UK and on an ever increasing scale. The Financial Services industry is likely to bear the brunt of this, with widespread redundancies and rising jobs insecurity.”

Of the cases examined in the study, 70% were committed by employees who went to work for a rival business, and in almost every instance the perpetrator had already left the company before the breach was discovered. Just 22% of thefts were carried out by women.

The data being stolen was usually pertaining to client relationships, such as trading levels, pricing information and profit margins, or customer lists. However, in 14% of cases the information stolen was financial.

Email was cited as the most common medium for data theft, while USB sticks were used in just 9% of cases. However, businesses were warned that smart phones, iPods and social networks all posed threats to their organisations.

Morrison advised businesses that suspect a data breach to act quickly.

“The stolen data has often limited shelf life and employees realise that they have to use the information quickly or they will lose their competitive advantage,” he said.