Economics of Information Security: Breaking Down the Cost of Cyber Crime

By Karla Robinson
August 9, 2012

The UK Ministry of Defense recruited a group of academics to develop over-arching estimates of the financial cost of Internet crime.
The numbers are high — to no surprise — but our “extremely inefficient” efforts to control cyber crime are misplaced, according to the researchers.
“Our figures suggest that we should spend less in anticipation of cyber crime (on antivirus, firewalls, etc.) and more in response — that is, on the prosaic business of hunting down cyber criminals and throwing them in jail,” the team wrote in their report.
The full findings, linked on the Businessweek article, break down the costs in various categories. Some interesting numbers:
The money stolen via cyber crime amounts to roughly $1.997 billion, with conservative estimates. By comparison, the money spent on defense comes in at around $25.84 billion.
The most money was spent for user cleanup (when antivirus programs fail) and business security, each amounting to $10 billion.
The most successful cyber crime was the Advanced Fee Fraud, which takes about $1 billion from consumers who pay a small amount upfront or a larger fortune to be released.
Ever gotten an email from your contact, saying they’re stranded traveling abroad and need your money? That scam has accrued over $10 million.
Other defense costs include $400 million for law enforcement, $1 billion each for patching vulnerabilities and bank countermeasures, $3.4 billion on antivirus protection and $40 million on ISP cleanup.

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