Identity Theft Cost in Loss of Sales Released
Personal identity theft incidents have been increasing every year. The loss of consumer confidence is being felt through a decline in online purchasing by the entire spectrum of online companies. Many individuals have stopped making online purchases. The purchases made are for smaller amounts. Javelin Research released a report this week revealing $21 billion in lost sales by online retailers over this past year due to concerns of consumers around the security of information provided in an internet transaction. The onus is being put on merchants to take steps to secure information given during transactions and offer recourse in the event of identity theft. The idea of a zero liability policy against identity theft purchases won the support of 80% of the consumers participating in a survey concerning what it will take to boost their confidence enough to start buying over the internet again.
New Insurance Policy Offered to Cover Data Breach Risks
When a customer information database was tapped the cost was determined to be $202 per record in 2008 according to the Ponemon Institute's annual study on the U.S. Cost of a Data Breach. This potentially huge risk is being addressed by a new type of insurance policy, the Internet Liability and Network Protection Policy, is now being offered by the Great American Insurance Group. Great American is also partnering with Theft 911 in order to provide the identity theft solutions to their policyholders at the time of covered loss. Great American Insurance’s Cyber Risk Insurance provides coverage for exposures associated with using Internet as business tool. It is for and available to any commercial enterprises, including non-profits, which have websites and also maintain database of their client information.
New Laws Proposed March 26th that will Affect Banks and Venture Capitalists Alike
Congress is being pushed by the Obama administration to take steps to impose regulation on the financial markets that were not previously regulated and to tighten the existing restrictions on risk-taking by America's key financial companies which include major banks, insurance companies and hedge fund companies. One of the new regulations would grant government the power to take over large firms before they collapse.
U.S. Treasury Secretary Geithner's plan of Systemic Risk Regulation unveiled this week is not meeting with so much opposition as infighting as to who would be responsible for detecting risks in the economy and administering the proposed regulations. The Federal Reserve, Commodity Futures Trading Commission, and Securities and Exchange Commission are all laying claim to their suitability at overseeing the markets involved.
Venture capitalists and startup company utives say that they would feel the impact of such proposed requirements as registering with Securities and Exchange Commission as an undue burden to them when they feel they were not guilty of causing the economic crisis and have absorbed their losses over the last year without government intervention. The industry understands that some regulations are coming but they contend that they deserve not to be treated the same way as financial firms that had to be bailed out. There is an industry-wide gearing up for intense discussions on the details of Systemic Risk Regulation Plan.
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