The Fraud Examiner

Important New Insights into The Cost of Cyber Crime
 

July 2012

By Peter Goldmann, CFE

As more and more fraud migrates from traditional techniques to those that exploit the Internet, institutions and individuals are increasingly at risk of victimization. The fast-growing population of cyber fraudsters has created a vibrant new industry of anti-malware software makers, information security service providers, cyber-technology researchers, trainers and others.This frenzy of anti-cyber crime activity has created confusion about the very definition of cyber crime and about the financial damage wrought by the evolving variety of online crimes to which the definition applies.


Now, however, a group of researchers from the Computer Laboratory at the University of Cambridge has come out with a report which provides much-needed clarity to the entire cyber crime issue. The team starts with a uniquely helpful three-part definition of cyber crime:

 

1) Traditional forms of crime such as fraud or forgery, though committed over electronic communication networks and information systems;

2) The publication of illegal content over electronic media (e.g., child sexual abuse material or incitement to ethnic hatred);

3) Crimes unique to electronic networks, e.g., attacks against information systems, denial of service and hacking.


 

How Much Does it Really Cost? 

Some cyber experts believe that many estimates of the cost of cyber crime are vastly overstated. This is not surprising in light of the fact that many of the studies produced each year are released by companies that also sell anti-virus software and other products designed to protect organizations and individuals against the bad guys in cyberspace.

 

This is not to suggest that cyber crime isn’t incredibly costly and that nearly every entity and individual is a potential victim. But it is helpful to executives to have reliable data when trying to make decisions about how best to protect against these crimes.The Cambridge researchers acknowledge this and have attempted to apply a more scientific methodology to their analysis.They started by studying the various individual cyber crimes plaguing organizations today and analyzed the financial damage resulting from each.



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