Intel’s McAfee Division Alleged to Have Grossly Exaggerated ‘Trillion-Dollar’ Global Cost of Hacking

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News Posted: Wed, Jul 24 2013 10:19 AM
Well now, this is awkward. You may recall a study conducted by McAfee a few years back in which it was revealed that businesses were at risk of losing over $1 trillion from "loss or theft of data and other cybercrime." That figure has been cited on more than one occasion by top government officials, including President Barack Obama, but it turns out the the financial impact of hacking may have been grossly exaggerated.

In a report scheduled to be released on Monday by the Center for Strategic and International Studies (CSIS), McAfee admits that its previous figure might be three times the actual impact, Reuters reports. What's unfortunate is that the original study from 2009 has been used by members of Congress to push through costly legislation related to cyber security.

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"This study here is newer, it's based on extra rigorous work, and once it's made public, this is clearly the one we're going to focus on," Tom Gann, McAfee Vice President of Government Relations, told Reuters.

In McAfee's defense, it's not easy extrapolating this kind of data. Even still, CSIS says the U.S. might lose as little as $20 billion to $25 billion per year due to cyber crime, or as much as $140 billion. Globally, the number rises to $300 billion to $400 billion, all of which are way below McAfee's original estimate.
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Jaybk26 replied on Wed, Jul 24 2013 10:53 AM

Is it ever a good idea to (unquestioningly) believe the accuracy of the information from the person trying to sell you something?

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realneil replied on Wed, Jul 24 2013 2:58 PM

Stolen money (resources) is hardly reported by those that take it, and not always detected by those who lose it either.

So any statements as to amounts are just a guess, aren't they?

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Clixxer replied on Wed, Jul 24 2013 5:06 PM

Pretty hard I think to accurately say how much people are actually losing in money terms. Everything is up for interpretation I think. Granted numbers can be close with a +/- but noone really know for sure when it comes from a third party I think.

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realneil replied on Wed, Jul 24 2013 5:47 PM

Clixxer:
Pretty hard I think to accurately say how much people are actually losing in money terms.

In reading about exploits throughout the years, one thing I've seen is that many companies will try to mask the fact that they've been hacked. They deal with people's data and have it stored on their servers. If they're perceived as being hacked, why would people want to continue doing business with them?

This makes me wonder how much is reported at all?

 

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Clixxer replied on Wed, Jul 24 2013 5:54 PM

realneil:

Clixxer:
Pretty hard I think to accurately say how much people are actually losing in money terms.

In reading about exploits throughout the years, one thing I've seen is that many companies will try to mask the fact that they've been hacked. They deal with people's data and have it stored on their servers. If they're perceived as being hacked, why would people want to continue doing business with them?

This makes me wonder how much is reported at all?

That is a very good point. if only a true 20% of hacks are reported and they lost 200M then the real number is 1 billion. I look at it as like with unemployment. The rate might be for example 8% but that is who is on unemployment from the gov't and doesn't count other that are have exhausted their unemployment benefits and the real number could be 15%. Granted not all of those people are "truly unemployed" if they don't need to work, ect.

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I know the cost they quoted was possibly to high...but does it really matter the exact number? Obviously hacking does cost companies and ultimately consumers money... a lot of money at that! So its still a serious problem that needs serious attention at all levels.

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Clixxer replied on Wed, Jul 24 2013 8:38 PM

Exact money value doesn't really matter but the question still remains of how much of said hacking have been reported to get an accurate number. You buy something off a small website that gets hacked and they use your CC info to buy a 5 dollar item which goes unnoticed by you and the company that was hacked and it happens a million times then that could be 5 mil lost, or 50 mil, or 500 mil that noone knows about. 

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realneil replied on Wed, Jul 24 2013 8:54 PM

BlackOpsPenguin:
its still a serious problem that needs serious attention at all levels

I agree with this, but I fear that the hackers are one or more, steps ahead of the people trying to catch them.

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ajm531 replied on Wed, Jul 24 2013 10:58 PM

Well i agree with both blackops penguin and jaybk 26. i mean its issue no matter the numbers. But still lying is lying and of course they are going to scare you into buying their product. this scare tactic is being used on android all the time.

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ajm531 replied on Wed, Jul 24 2013 10:59 PM

By the way good to see you back clixxer :)

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Still, billions lost is still a butt load of money.

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Clixxer replied on Thu, Jul 25 2013 12:33 AM

ajm531:

By the way good to see you back clixxer :)

Thanks man! Had a bunch of RL things to take care of and haven't been able to be on the net at all really.

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