Cyber Crime: Impact on Businesses, Consumers, and Security
This paper examines the growing threat of cyber crime and its wide-ranging consequences for businesses, consumers, and the U.S. government. Drawing on FBI testimony, legal case examples, and cybersecurity literature, the paper outlines how cyber crime imposes significant financial costs on businesses through protection expenses, denial-of-service attacks, and litigation. It further explores how these costs trickle down to consumers through higher prices, identity theft, and service disruptions. The paper also addresses national security implications, citing vulnerabilities in critical infrastructure. It concludes by proposing preventive strategies including device security, employee training, and government-sponsored research and development partnerships.
- Introduction: Technology's benefits and its role in enabling cyber crime
- Cyber Crime and Its Impact on Businesses and Consumers: Financial, legal, and personal costs of cyber crime
- Impact on the U.S. Government and National Security: Critical infrastructure vulnerabilities and intelligence risks
- Proposed Preventive Measures: Encryption, training, and government R&D partnerships
- Conclusion: References and closing source list
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What makes this paper effective
- Uses concrete real-world examples — such as the MasterCard/PayPal denial-of-service attacks and the TRC Operating Co. vs. United Security Bank lawsuit — to ground abstract claims in verifiable incidents.
- Moves logically from business impacts to consumer impacts to government/national security implications, building a progressively broader argument about the scope of cyber crime.
- Supports claims with authoritative primary sources, including FBI testimony before a Senate subcommittee, lending credibility to assertions about national security risks.
Key academic technique demonstrated
The paper demonstrates effective use of institutional authority as evidence. Rather than relying solely on secondary commentary, the author cites direct FBI testimony (Snow, 2011) to validate claims about critical infrastructure vulnerability. This technique — anchoring a policy argument in primary government sources — strengthens persuasive credibility in criminal justice and public policy writing.
Structure breakdown
The paper opens with a brief contextualizing introduction, then develops its central argument across three thematic sections: (1) financial and operational costs to businesses, (2) downstream harm to consumers, and (3) national security threats faced by the U.S. government. A final section shifts from diagnosis to prescription, outlining actionable preventive strategies. The structure follows a problem-then-solution pattern well suited to policy-oriented academic writing.
Introduction
Today, unlike was the case a few years ago, technology has made it easier for businesses to compete more efficiently, reduce operating costs, and address the needs of customers more effectively. However, the same technology has introduced unique challenges — most notably a sharp increase in instances of cyber crime.
Cyber Crime and Its Impact on Businesses and Consumers
Cyber crime, according to Thomas and Loader (as cited in Reyes, Brittson, O'Shea, and Steele, 2011, p. 28), consists of all those "…computer-mediated activities which are either illegal or considered illicit by certain parties and which can be conducted through global electronic networks." Examples include, but are not limited to, software piracy, industrial espionage, and network break-ins. As the Federal Bureau of Investigation (FBI) has pointed out, cyber crime has been on the increase among American business entities for the past several years (Snow, 2014). The primary driving force behind this trend has been the desire of business competitors and other unscrupulous individuals or organizations to steal critical business information and gain access to confidential client data. In some cases, cyber crime is driven by pure malice — for instance, when hackers compromise an entity's network or servers with the aim of denying service to the targeted organization's website.
Cyber crime carries significant cost implications for businesses. When it comes to the cost of protection alone, companies wishing to deter cyber criminals must incur expenses related to risk identification, the establishment of safe operating procedures, and the purchase, installation, and monitoring of protective hardware and software. These costs can be even higher for businesses involved in sensitive operations — particularly e-commerce businesses that handle and process sensitive customer information. In addition to installing costly protective hardware and software, such businesses may also be compelled to hire cybersecurity professionals to oversee their operating procedures. Ultimately, the costs businesses bear as a consequence of cyber crime are substantial and can negatively affect the bottom line.
Businesses can also lose revenue as a result of denial-of-service attacks. Companies that have been targeted by such attacks include MasterCard and PayPal, among others. During the period when a company's site is down as a result of such an attack — and before IT experts can restore it — customers are effectively locked out, denying the affected business revenue throughout that entire period.
There have also been cases in which businesses have been taken to court by clients who felt harmed by the inappropriate exposure of their private information after criminals managed to infiltrate a company's networks and computers. In some instances, aggrieved clients suffer actual monetary losses as a result of what they view as a business's failure — typically a bank's failure — to take the necessary steps to protect them. For example, TRC Operating Co. recently "sued the Fresno-based United Security Bank, claiming that the bank failed to adequately secure its accounts" (ESET Staff Writer, 2014). The settlement reached in that case was $350,000 — in favor of TRC. Some companies may even be forced to close operations out of fear of exposure to costly litigation. This is particularly true for small businesses whose budgets cannot accommodate extensive security investments.
On the consumer side, the costs businesses incur in protecting themselves against cyber crime are frequently passed on to customers in the form of higher prices for goods and services. Consumers therefore suffer through the erosion of their disposable income.
Impact on the U.S. Government and National Security
Furthermore, when critical customer information — such as banking credentials — falls into the wrong hands as a consequence of cyber crime, affected customers may have their bank accounts compromised or their identities stolen. Consumers can also be seriously inconvenienced by denial-of-service attacks. When the victim of such an attack is an e-commerce website, customers are prevented from making purchases. When the victim is an online money transfer service, both those wishing to send payments and those expecting to receive them are effectively blocked from transacting. The resulting inconvenience to customers is considerable.
The negative impacts of cyber crime are not limited to businesses and consumers — the government also suffers significant harm. The internet and information systems have been used by foreign states and unscrupulous actors as tools for stealing crucial government information and intelligence. As stated in testimony presented by Gordon M. Snow — the FBI Assistant Director for the Cyber Division — before a Senate subcommittee, "it is difficult to state with confidence that our critical infrastructure — the backbone of our country's economic prosperity, national security, and public health — will remain unscathed and always be available when we need it" (Snow, 2011). Snow supports this assertion by citing the security breach experienced at NASDAQ several years ago. Adding to this concern is the difficulty of tracking down and apprehending cyber criminals who penetrate the nation's critical networks, given their ability to mask both their identities and their locations. As Snow (2011) acknowledges, establishing real attribution in such cases is often extremely difficult. It is therefore likely that the nation's most sensitive economic, military, and intelligence information will continue to face risk as instances of cyber crime increase.
Conclusion
There is also a need to ensure that the skills of all personnel involved in handling computers are current — particularly with regard to keeping information secure and upholding organizational security policies for the protection of information systems and networks. Workers should therefore be exposed to education and training opportunities that deepen their understanding of "the most common hacking tactics, such as phishing, social engineering, or packet sniffing" (Newtek Contributor, 2013).
The government also needs to aggressively sponsor research and development efforts aimed at developing new ways of combating cyber crime. Through its various agencies, the government can partner with stakeholders to develop the most viable approaches to fighting cyber crime. At present, the government is actively working with academia and other key industry players to rein in this growing threat.
ESET Staff Writer. (2014). California company sues bank over cybercrime, wins $350,000 settlement. Retrieved from http://www.welivesecurity.com/2014/06/20/california-company-sues-bank-cybercrime-wins-350000-settlement/
Newtek Contributor. (2013). How to prevent cyber crime. Retrieved from http://www.forbes.com/sites/thesba/2013/08/28/how-to-prevent-cyber-crime/
Reyes, A., Brittson, B., O'Shea, K., & Steele, J. (2011). Cyber crime investigations: Bridging the gaps between security professionals, law enforcement, and prosecutors. New York, NY: Syngress.
Snow, G. M. (2011). Testimony: Statement before the Senate Judiciary Committee, Subcommittee on Crime and Terrorism. Retrieved from
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