The Identity Theft Resource Center has released its 2008 numbers, and they're not pretty. They tracked a total of 656 data breaches in 2008, which is a 47% increase over 2007. What does a data breach mean for consumers? It means that a company holding your private information (typically credit card numbers and/or social security numbers) had its computer systems hacked. Your private information then sits in the hands of criminals.

What's even scarier is that 89% of breaches were against unprotected data. This means that the companies that were hacked, for the most part, didn't have any protections in place. Of course, this is the very reason they were hacked in the first place, but these statistics just demonstrate how effective things like encryption and password protection can be to secure customer data.

What can we do to change things?


The organization advises companies to create more explicit policies regarding safe data handling procedures, limit the access employees have to data, and use encryption for data that is to be stored or sent out. Sadly, all of these recommendations have been going out for years, yet there are obviously some companies that don't pay attention.

You might think 656 data breaches is a small number in comparison to the number of businesses in the United States. That's true, but even one data breach becomes significant when it's your information that's been compromised. Keep an eye on the news for stories of data breaches, and try not to do business with the companies that are leaving their customers vulnerable.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.