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Source: Burlington Free Press

Posted on August 1, 2006

      The actions of Ernst & Young, Fidelity Investments and other high-profile victims underscore the balancing act for executives, who must weigh the costs of additional security and customer privacy with the financial benefits of a mobile work force.

      "There is a trade-off between the cost of security and how much security you actually get," says Robert Seliger, CEO of Sentillion, a data-security company.

      About 88 million Americans have been exposed to potential ID theft since February 2005 as a result of reported data breaches, says Privacy Rights Clearinghouse. In at least 43 instances - one-fourth of all reported breaches - stolen or missing laptops were involved. Few of the laptops have been recovered.

      Ernst & Young started encrypting - or scrambling - data on laptops for its 30,000-person workforce in the United States and Canada after a laptop with personal information of about 38,000 customers was stolen from an employee's car in February.

      Fidelity accelerated encryption on thousands of employee laptops. The mutual fund giant was the victim of a laptop breach in March that affected data of 196,000 current and former Hewlett-Packard workers. It also is increasing training on laptop security and protection of customer data.

      Aetna undertook several preventive measures after a laptop containing names, addresses and Social Security numbers for 59,000 members was swiped from an employee's car in April. The insurer had employees re-encrypt and re-certify files. Every company PC was audited to ensure files were properly encrypted. Aetna also tightened restrictions for storage devices such as thumb drives.

      Encryption can be costly. Gartner estimates a company with 100,000 customer accounts can spend $30 to $40 per laptop on data-encryption. Yet, the cost of a data breach is even higher. Companies with 100,000 customer accounts will spend at least $90 per account if data is compromised or exposed - not including fines and lawsuits, Gartner says.

      Walking off with a laptop is easy. Few have alarms, and only a few have encrypted data. People also tend to leave them in unlocked cars or unattended at airports, says Keith Burt, project director of San Diego's Computer and Technology Crime High-Tech Team.

      As more people store data in a mobile environment, laptops have become more attractive to ID thieves, says Bob Egner, a marketing executive at security software maker Pointsec Mobile Technologies. Personal data sells on the Internet for about $1 per stolen record, Egner says.

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