| Small businesses to be fined for security breaches |
| Wednesday, 07 April 2010 05:56 |
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66% of all UK data breaches come from small companies, who could now be fined up to £500K.
66% of all UK data breaches come from small companies, who could now be fined up to £500K. Small businesses across the UK could now be fined up to £500,000 in the event of a data security breach as new powers for the Information Commissioner’s Office (ICO) came into force on 6 April. Under the new rules, the ICO will be able to fine businesses up to £500,000, equivalent to 10 per cent of the highest annual turnover of a small company, if they lose individuals' confidential data. Previously the ICO had the power to fine just £5,000 for serious breaches of the Data Protection Act, but these new measures are expected to act as an effective deterrent to improve data security within the UK economy. These new powers have been welcomed as a sign of progress for UK data protection, but small businesses are warned that, as fraud persists, they must be vigilant as they are often the most vulnerable targets for information thieves. Robert Guice, Executive Vice President of data destruction company Shred-it, commented, “With fraud on the rise, information security is more important than ever for businesses looking to protect their financial standing and corporate reputation." "These new measures highlight the urgent need for small businesses to invest in data security practices that protect their employees’ and clients’ confidential information," he said. "Small businesses in particular make easy targets for data theft. While larger companies have resources dedicated to protecting the security of their data, small businesses don't always have the means or knowledge needed to effectively manage the threat. Small businesses who neglect the need for good and robust management of their confidential data will now pay a high price," warned Guice. In January, information security and forensic computing consultancy 7Safe released its UK Security Breach Investigations Report 2010, which revealed that the majority (66 per cent) of data security breaches that occurred in the UK over the past 18 months came from small companies employing less than 100 people. According to the research, 80 percent of attacks on data came from sources external to the organisation, while 18 per cent came from business partners. Guice continued, "Without doubt, data breaches affect businesses of all sizes, but many small business owners simply aren’t taking the necessary steps to create ongoing data security policies and practices, including training their employees." Guice advised small firms to make employee education a top priority to help avoid unnecessary data breaches occurring as a result of human error. "Invoices, company reports, payroll data, customer lists and even customer complaints are all highly confidential and need to be destroyed or securely stored," he said. He advised that setting out clear guidelines for employees as to which documents should be seen as confidential, will prevent leaks of this kind from occurring. "In the longer term, strengthening online security and implementing a secure document destruction programme are the safest ways to ensure all sensitive corporate information is secure, therefore avoiding data security breaches, and of course the fines which may result," added Guice. For small businesses looking to protect themselves and their customers against fraud, the following guidance is offered:
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