Does Cybercrime Really Cost $1 Trillion?

[MindMover]

Gen. Keith Alexander is the director of the National Security Agency and oversees U.S. Cyber Command, which means he leads the government’s effort to protect America from cyberattacks. Due to the secretive nature of his job, he maintains a relatively low profile, so when he does speak, people listen closely. On July 9, Alexander addressed a crowded room at the American Enterprise Institute in Washington, D.C., and though he started with a few jokes — his mother said he had a face for radio, behind every general is a stunned father-in-law — he soon got down to business.

Alexander warned that cyberattacks are causing "the greatest transfer of wealth in history," and he cited statistics from, among other sources, Symantec Corp. and McAfee Inc., which both sell software to protect computers from hackers. Crediting Symantec, he said the theft of intellectual property costs American companies $250 billion a year. He also mentioned a McAfee estimate that the global cost of cybercrime is $1 trillion. "That’s our future disappearing in front of us," he said, urging Congress to enact legislation to improve America’s cyberdefenses.

These estimates have been cited on many occasions by government officials, who portray them as evidence of the threat against America. They are hardly the only cyberstatistics used by officials, but they are recurring ones that get a lot of attention. In his first major cybersecurity speech in 2009, President Obama prominently referred to McAfee’s $1 trillion estimate. Sen. Joseph Lieberman, I-Conn., and Sen. Susan Collins, R-Maine, the main sponsors of the Cybersecurity Act of 2012 that is expected to be voted on this week, have also mentioned $1 trillion in cybercrime costs. Last week, arguing on the Senate floor in favor of putting their bill up for a vote, they both referenced the $250 billion estimate and repeated Alexander’s warning about the greatest transfer of wealth in history.

A handful of media stories, blog posts and academic studies have previously expressed skepticism about these attention-getting estimates, but this has not stopped an array of government officials and politicians from continuing to publicly cite them as authoritative. Now, an examination of their origins by ProPublica has found new grounds to question the data and methods used to generate these numbers, which McAfee and Symantec say they stand behind.

http://www.propublica.org/article/does-cybercrime-really-cost-1-trillion

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Just saying that everytime I put on one of these overbloated security software sysems my computer gets nauseated and starts to vomit ....

[n2doc]

1. They are probably using RIAA accounting techniques

The ones where one song shared is "worth" thousands in lost revenue...

[salvorhardin]

2. Indeed

StrategyOne surveyed almost 20,000 people in 24 countries, asking them to report whether they had experienced cybercrime and how much it had cost them. The company said it used "standard research practice for online surveys" to obtain a representative sample of Internet users. To calculate a total cost, it multiplied the estimated number of victims by the average cost of cybercrime in each country.

Note: Nobody's disputing that cybercrime exists and that it's a real problem. What the ProPublica report discusses is how the most often heard numbers -- the ones used to craft national policy -- are based on surveys by private companies like McAfee, sometimes completely unsourced, and other times created out of thin air using methods disputed by even the authors of the reports.