In Corporations They Don’t Trust - New York Times

An interesting angle on the privacy debate was revealed in a piece by Paul Brown in the New York Times a couple of days ago. The gist of the piece was that "senior executives really do not have a clue." Brown cited a study in the McKinsey Quarterly, the business journal of McKinsey & Company, that found “a trust gap between consumers and global corporations, as well as a lack of understanding among business leaders about what consumers really expect from companies.” For example, when asked what three concerns would be most important to them over the next five years,

“Executives predicted consumers would put job losses and offshoring first, followed by privacy and data security, and the environment...[whereas]...almost half of the consumers picked environmental issues, followed by pension and other retirement benefits, and health care.”

In other words, CxOs think consumer concern about privacy and data security is greater than it really is. Why would this be, apart from the obvious generalized conclusion that CxOs are out of touch with consumers? I suspect it has something to do with the relentless pressure from security and privacy advocates as well as extensive negative media coverage of security breaches that expose private data. And you might add to that the increasing likelihood that such breaches will be followed by lawsuits, some of which may name CxOs. They may be out of touch with consumers but they are very likely to be in touch with their own self-interests.

TJX: Data breach damage $25 million and counting

Here is a pretty good reason to make sure your company is doing a good job of protecting customer data: TJX: Data breach damage $25 million and counting.

That's right, according to SearchSecurity, the bottom line for TJX Companies Inc. took a big hit in the first quarter of 2007, thanks to a $12 million charge tied to the security breach that exposed at least 45.7 million credit and debit card holders to identity fraud. In total, the breach has cost the company about $25 million to date. And that doesn't include the cost of customers who decided to shop elsewhere.

TJX Faces Suit From Shareholder: Cost of privacy breach expands

You can get an idea of how much trouble a privacy breach can cause from this article: TJX faces suit from shareholder. As predicted by myself and other security experts at least ten years ago, shareholders are suing over a security breach that hurt the value of their stock.

The Privacy Year: 2006 sent mixed messages

So, as the year ends, what did 2006 do for privacy?

Well, there was plenty of coverage of security breaches that exposed personal data. According to the good folks at Privacy Rights Clearing House, the approximate minimum total number of PII potentially compromised in 2006: 48,419,936. They have a very interesting breakdown right here.

And this was the worst year ever, right? Wrong, the total for 2005 was 54,843,000. But aren't we getting better at catching the culprits? Well, according to Privacy Rights Clearing House, the number of data-breach identity thieves sentenced in 2006 was, wait for it: 5.

So, not a good year for privacy. But maybe not the worst year ever. Let's see what 2007 brings.