Report: Year's Hack Attacks To Cost $1.6 Trillion

A new study covering 30 countries and nearly 5,000 Information Technology (IT) professionals shows that hacker attacks will cost the world economy a whopping $1.6 trillion (US$) this year.

"These estimates are based on the broadest sampling ever achieved in the security industry," said Rusty Weston, editor of Information Week Research, which carried out the study for PricewaterhouseCoopers.

Damage Estimates Climbing

Prior studies have consistently estimated losses in the billions of dollars, but those figures have climbed dramatically. Last week, a study by Reality Research suggested that businesses worldwide would lose $1.5 trillion due to computer viruses.

"These are companies with infrastructures of IT professionals who, because of the dollar impact, are increasingly tracking the problem and can provide an accurate assessment of the scope of the issue," said John Di Stefano of the Information Week study.

The number one culprit, in terms of total dollar impact, is the virus. The so-called Love Bug virus, proliferated by e-mail earlier this year, caused an estimated $2.61 billion in damage.

"The findings indicate that viruses are far more disruptive to organizations than most people realize," Weston said. "Lost productivity will undoubtedly force many IT organizations to reassess their network defenses and security policies."

Cybercrime Wave

As computer software becomes increasingly complex, more vulnerabilities appear for hackers to exploit. Many experts say that one in four broadband PCs are at risk.

According to the Federal Bureau of Investigation (FBI), 9 of 10 companies have reported computer security breaches since March 1999. That study was based on more than 600 companies and government agencies.

The FBI said most hacking is still limited to viruses, stolen laptops and employees misusing Internet privileges while on the job. However, more serious crimes are on the rise, such as outside penetration, fraud, sabotage, and denial-of-service (DoS) attacks.

Fear of Terrorists

As cybercrime increases, so do fears of cyber-terrorism. Polls show that people increasingly believe the Internet is a threat to national security. In response, the Clinton administration proposed spending $1.5 billion to build defenses against cyber-terrorists.

"It's not a matter of if America has an electronic Pearl Harbor, it's a matter of when," Republican Senator Curtis Weldon, a member of a government Internet crime committee, told the Pentagon.