The ITRC’s 2021 Business Aftermath Report reveals that more than half of small businesses have suffered a data or security breach; one-third of companies have been breached at least three times
SAN DIEGO, October 27, 2021 – The Identity Theft Resource Center® (ITRC), a nationally recognized nonprofit organization established to support victims of identity crime, has published its first-ever report on the impacts of identity crimes and cyberattacks on small businesses – the ITRC’s 2021 Business Aftermath Report.
There are 42 million solopreneurs, according to a 2019 report from the brand strategy group Spencer Brenneman. Yet, there is little information about how small businesses are impacted by the rise in identity crimes and cyberattacks. The ITRC solicited impact information directly from the small business owners and leaders affected by security and data breaches. For the 2021 Business Aftermath Report, 417 small business leaders and 1,050 general consumers responded to questions in two separate surveys about the impacts of cybercrimes on small businesses as defined by the U.S. Small Business Administration (SBA). The findings include:
- Fifty-eight (58) percent of small businesses have experienced a data breach, security breach or both. Of those businesses, three-fourths have experienced at least two breaches and one-third at least three breaches.
- Forty-four (44) percent of small businesses spent between $250,000-$500,000 to cover the costs of the breach. Sixteen (16) percent of small businesses spent between $500,000-$1 million.
- Thirty-six (36) percent of small businesses incurred debt to cover the breach costs, and 34 percent dipped into cash reserves.
- Fifteen (15) percent reduced their headcount to cut expenses.
- External threat actors were responsible for 40 percent of attacks. Malicious employees and contractors were responsible for 35 percent of the attacks.
“Behind all of these statistics are people,” said Eva Velasquez, President and CEO of the Identity Theft Resource Center. “The resources stolen by cybercriminals are the same resources needed to sustain or grow a business to keep families safe, healthy and financially secure. It is critical we share these eye-opening findings so everyone can better understand the impacts of identity crimes, particularly on people just trying to support their families and the families of their employees.”
Another important finding discovered in the 2021 Business Aftermath Report is that 42 percent of small businesses needed one to two years to return to normal. Twenty-eight (28) percent of respondents say it took their business three to five years to recover fully.
“These identity crimes are not just costing small businesses and solopreneurs a lot of money,” Velasquez said. “It is also taking them a long time to put their business back on a path to growth. Now that we have data on the impacts of data and security breaches on small businesses, we must use it to help support the broad range of identity crime victims.”
The ITRC offers a range of low and no-cost tools to help small businesses. Consumers can receive free live victim support or guidance from a knowledgeable advisor by calling 888.400.5530 or visiting www.idtheftcenter.org to live-chat.
About the Identity Theft Resource Center
Founded in 1999, the Identity Theft Resource Center® (ITRC) is a national nonprofit organization established to empower and guide consumers, victims, business and government to minimize risk and mitigate the impact of identity compromise and crime. Through public and private support, the ITRC provides no-cost victim assistance and consumer education through its website live-chat idtheftcenter.org and toll-free phone number 888.400.5530. The ITRC also equips consumers and businesses with information about recent data breaches through its data breach tracking tool, notified. The ITRC offers help to specific populations, including the deaf/hard of hearing and blind/low vision communities.
Identity Theft Resource Center
Head of Earned & Owned Media Relations
888.400.5530 Ext. 3611