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The Relation of Cyber Risk to Public Relations Spending

[caption id="attachment_103" align="alignleft" width="300"]cyber risk cyber risk[/caption] Many companies, particularly online retailers, understand the reality of cyber risk. In the modern world, online activity covers everything from making purchases to getting the latest traffic report. In 2004, the reported victims of identity theft peaked at over 10 million victims. The numbers have fallen in subsequent years, yet in 2007, fraud accounted for $49.3 billion in losses, an average cost of around $5,000 per victim.   The Mindset of an Online Shopper   Early adopters of online purchasing systems often armed themselves with watchdog services and limited-funds credit cards and took the plunge into the new era of shopping. Others joined those who took advantage of internet shopping, often because the timesavings and convenience were too much to forego. However, many of these shoppers realized that they were swimming in dangerous waters, and often switched to online purchasing on a limited basis. Smart retailers understood that many of their customers were like deer, ready to bolt at the first sign danger. In order to protect customer confidence, and under the regulations of the Red Flags Rule, they implemented stringent identity theft protection programs.   Public Relations Deals With Breaches   In spite of highly secure systems, many well-known retailers have suffered cyber-attacks, and have had to notify their customers that their sensitive data may have been breached. After such an incident, companies scramble to restore customer confidence through public relations. The cost of this PR is one of the several expenses associated with cyber risk, and one of the important reasons why modern companies should carry sufficient cyber insurance.

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