November 18, 2014, 12:19 PM

Data breaches are on the rise

Retailers lost more than 57 million consumer records in the third quarter of 2014.

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Between July and September of 2014, information security company SafeNet counted 320 reported data breaches, an increase of 25% compared to the third quarter of 2013. Those security failures exposed more than 183 million customer accounts. SafeNet tracks data breaches on a quarterly basis for its Breach Level Index.

And the retail industry was hit hard. Retailers accounted for 31% of records stolen—57,216,390 data records—in 47 data breach incidents, or 15% of the data breach incidents. The only industry accounting for more breaches and lost records was the financial industry with 77,605,972 (42%) records.

“The retail industry has been consistently hit hard with breaches,” says Tsion Gonen, chief strategy officer at SafeNet. “Criminals want to have access to credit card and banking information for financial gain or to obtain personal information to use for identity theft. Customers have been very tolerant of these breaches, because they feel that this access can be corrected by someone else, like a bank replacing a stolen credit card.”

The United States was also the hardest-hit country. The U.S. experienced 62% of the total number of breaches worldwide during the quarter, with 199 incidents reported. By comparison, all of Europe reported only 51 breaches.

Gonen says one way to combat these data breaches is to encrypt records. “While it’s not surprising that sophisticated cybercriminals are continuing to attempt these breaches, what is surprising is that again only 1% of breached records had been encrypted,” he says. “Now is the time for customers to demand that their personal information be encrypted by companies.”

Prominent among the retailers disclosing data breaches this summer was Home Depot Inc., which confirmed that criminals had penetrated its network and accessed data about 56 million payment card accounts. The retailer subsequently disclosed that the e-mail addresses of 53 million customers also were exposed. Home Depot said the card numbers stolen were used in U.S. and Canadian stores, but that cards used on were not impacted.

Kmart, part of Sears Holdings Corp., also confirmed that its systems had been breached in an attack that began in September.

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