Cybercrime in the USA

There are certain things that we are asked to blindly believe in as we go through life. Things like the fact that the global economy is going to get better in the next few months, or that China’s economy is not slowing down at all and the banks are flush with cash. Then, there’s the ‘fact’ that cybercrime is costing billions and billions in the US and that it’s rife, lurking round every window you open. Exaggeration in the domain of cyber-attacks is par for the course.



Cybercrime is any criminal activity that involves IT technology. It could include diverse areas such as simply downloading illegal movies or music from the internet in its basic every format or it could extend to hacking into systems and using information or stealing. But, it also includes such areas as the development of malicious software or viruses to destroy systems and create havoc in the IT databases of companies. One form of cybercrime that we have all come across is phishing (fake emails and sites that try to obtain your personal details) and pharming (redirecting Internet users to fake websites without their knowledge to steal their personal information). Cybercrime covers the whole array of possibilities, from industry to personal lives of everyday people surfing on the net.

The Center for Strategic and International Studies has just released a report on the extent of cybercrime in the USA. The study that they carried out and that was published July 22nd 2013 was backed by McAfee, the internet and computer security company. So, you might imagine that the questions would have been loaded and that the answers would have been nothing more than controversial, manipulative and unjustified assumptions, just begging us to drink the Kool-Aid. But, not so. In fact, the report suggests that the extent of cybercrime is in fact lower than what might be expected. That’s certainly something coming from a report that is financed by McAfee. Talk about undermining their own business or pulling the rug out from under their feet.

The Center for Strategic and International Studies carried out comparative research between the cybercrime and crime in sectors such as car crashes, piracy and theft or pilferage in manufacturing industries. The report stated: “Companies accept rates of 'pilferage' or 'inventory shrinkage' as part of the cost of doing business. For retail companies in the U.S., this falls between 1.5 percent and 2.0 percent of annual sales—one 2008 estimate put pilferage losses at 1.7 percent.” The Center for Strategic and International Studies stated that it would be impossible to use surveys with companies to determine the losses incurred from cybercrime, since it is all too often impossible to estimate exactly how much has been lost or stolen in terms of intellectual property losses and this may change results in one way or another.

Cybercrime was classified in the report into six different areas that would be included in the estimates. They were:

Cybercrime: Take the bait?

Cybercrime: Take the bait?

  • Intellectual-property loss
  • Cybercrime (phishing and pharming, for example)
  • Sensitive-information (stock manipulation) theft
  • Opportunity costs (reduced trust, for instance)
  • Security costs involved in protection from cybercrime
  • Damage to company image and reputation loss

Although, since it is nigh on impossible to determine exactly what the pilferage rate of goods in a company is, companies end up estimating what they would consider to be an acceptable loss in the company and working out figures that way. It also seems almost impossible to actually determine how much companies have lost in terms of reputation and image with regard to perception of the customer after a cyber-attack. The figures can be nothing more than a gauge of what the extent of financial loss might be, but far from a fixed figure. Although the Center for Strategic and International Studies believes the following: “Other estimates have been bandied about for years, but no one has put any rigor behind the effort. As policymakers, business leaders and others struggle to get their arms around why cyber security matters, they need solid information on which to base their actions”.

The report used the calculation of those estimates to determine the level of cybercrime today. They predict that it is worth a loss of about $100 billion for companies in the US and that there could be up to 508, 000 jobs that are lost. Cybercrime is usually estimated in general terms to be somewhere in the region of $100 billion and $500 billion. But, the estimate that comes from the Center for Strategic and International Studies of $100 billion is at the low end of the figures put forward.

A future report will take a look at the loss of innovation due to cybercrime and the changes in the flow of trade. While the report deals solely with the loss incurred in the US economy, perhaps they should think about sending a copy to the Obama Administration via Edward Snowden to detail the losses that Prism might have incurred in its own domestic economy. Prism cost the very small sum of $20 million to run and provided one seventh of intelligence information to the Obama administration via daily briefings. Low price and high impact! The wonders of the modern age of technology!

Phishing: Cybercrime

Phishing: Cybercrime

In the world there are 156 million phishing emails that land in your email boxes every day around the world. Apparently, there are some 16 million that don’t get blocked by the filters that we have installed to protect us. That’s just over 10% of those that are sent out. Of those, there are 8 million people that open what they think are bone fide mails and 800, 000 people that actually click on the links that are there to be taken to the internet site. 10% of those people (80, 000) fall for the scam and end up providing their personal details to the fake site.

The UK was elected the most phished country in the world in 2012, thus overtaking the US to get to number one position. This was an increase by 25% on the figure for 2011. Perhaps the pole position of the UK in terms of cyber-attacks is down to the fact that internet penetration in the UK is roughly 85%, while in the US it is 78%. The UK is also has the highest mobile internet access, and that is today where the malware is finding its primary customer base for phishing.

Think about it next time you open a mail from some insurance company you have a policy with or the water company in your town.

About The Author


Professional team of writers/analysts analyzing the financial markets.

Comment on Facebook

Leave A Response

* Denotes Required Field