Computer problems cost more than pounds 1bn

BRITISH business loses more than pounds 1.2bn a year through breaches in computer systems security, according to a report by the Department of Trade and Industry, writes Mary Fagan.

The problems include failure of computer equipment, computer viruses, fraud, power failure, and use of software that has not been tested.

The survey shows that 80 per cent of the 832 companies surveyed have suffered a breach in computer security in the past two years at an average cost per incident of pounds 9,000. The largest single bill reported was by a company hit by a pounds 1.2m computer fraud. The most expensive virus attack infected more than 200 personal computers at a direct cost of more than pounds 100,000.

In one case, a sick employee entered data 90 per cent of which was correct and 10 per cent 'garbage' over a period of time. As a result incorrect financial information was given to banks and customers. The company put the immediate cost at pounds 50,000. The long-term cost was put at pounds 2.5m.

The costs of breaches include loss of business, repairing damage, and reinstating data. Many companies do not have contingency plans and of those that do, a significant number do not test them regularly.

The report also shows that half of the companies use some remote computer-based workers, which adds to security problems, but the majority have not yet taken extra precautions.

Patrick McLoughlin, the trade and technology minister, said: 'Information technology security is becoming a serious issue for almost all organisations. Every organisation which uses computers is potentially at risk.' He urged companies to take guidance from the DTI, which has produced a code of practice on the issue.