Most of the time you will hear how expensive a cyber attack is. While this is true, there is much more than money lost in an attack. Take it from Smile Direct Club!

SmileDirectClub (SDC) is a business that offers teledentistry services throughout the world. They produce and sell transparent retainers that fix crooked teeth in the same way that traditional braces would. People are attracted to their discreetness and availability from home. Sure, there is competition of other companies, but this company in particular was on the up and up. In fact, it was just in early 2021 that they posted numbers that were showing a strong first quarter. Considering the previous year with the pandemic and when a lot of people could not see a dentist easily, this was great news.

The not so great news happened in April of 2021. SDC was a victim of a cyber attack, according to a filing with the Securities and Exchange Commission.
Sources are indicating that the companies internal engineers were able to respond quickly. They powered off and/or isolated the systems that were affected by the breach from the rest of the network.

They have stated that “leading forensic information technology firms” have been brought in to assist with the incident and assess the damage that was done. The filing also states that SDC’s systems are “back online and performing normally” and that they did NOT pay a ransom.
While this seems like the best outcome there is to come out of a breach, SDC still had detrimental effects to their business. Financially they didn’t take a big hit up front. They had a strong data recovery plan in place, so their business was back up and running pretty smoothly. However, this just was not enough.

Due to lack of preventative measures, the community lost a lot of trust in SDC. They end up looking like a fool who did not do what is needed in order to protect their business and keep their patients/clients’ data safe.

The company reports that their anticipated revenue has dropped from the $205-215 million range down to $10-15 million. And with their stock shares dropping, people are concerned.
This goes to show that a strong cybersecurity posture does not start with one attack, and end when you feel your team is “up to speed”. Ongoing training and reminders of how and why a breach can occur are critical, but so is knowing how to react effectively if it does. But even then, you are still at risk of suffering financial and reputational loss despite all of your preparation and planning. You can’t stop consumers and analysts from making negative assumptions and predictions. Cyber insurance can help to cover the costs of this type of reaction, as it may cover public relations, but you need to work diligently to stop it before it happens.

The SmileDirectClub data breach further proves that the best thing you can to do protect your business is prepare, train, and be proactive. You need to work diligently to train employees about the dangers of cyber crime, how to avoid a potential hack. You need to have a recovery plan in place be ready in case you must react. But most importantly you must work harder to prevent it from happening in the first place.

If you want to know just how much a breach would cost you use this calculator.


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