8 Harmful Effects of Phishing on Businesses

One of the most common ways cybercriminals attack businesses is by phishing. A successful cyber-attack can cost a small business an incredible amount of money to recover. Some organizations may not recover from such attacks.

Phishing attacks are gaining momentum because they are easy to set up, rewarding, and pose little risk to cybercriminals. It can be as simple as hosting a fake webpage or malicious file and sending spoofed emails to victims and waiting for stolen access or data.

Cybercriminals employ two approaches to phishing. The more common approach is general phishing which involves mass fake email campaigns in the hope of getting as many victims as possible. The other method is spear phishing where attackers customize phishing emails to their target in order to increase the chance of success.

The cost of a phishing attack can be grave depending on the attack scope. We discuss some of the ways that phishing attacks affect businesses below:

1. Loss of Data

Clicking on a malicious link in an email can hand over the data and system of an organization to a hacker. They are then free to do what they want including theft for further criminal purposes, corruption, and deletion. Data loss is considered the most severe effect of phishing attacks.

2. Damaged Reputation

Companies suffer reputation loss following a data breach executed through phishing attacks. Announcement of a breach leads to loss of trust for the company among the general public. Regardless of an organization’s previous standing, data breaches exert a strong negative effect on its brand and it may be seen as untrustworthy for a long time following a successful hack.

It could induce public backlash against a company for not doing enough to protect user’s data.

3. Direct Monetary Loss

Extra funds will be needed to manage identity protection, compensation of customers or employees whose data was stolen following a phishing attack. Funds could also be transferred out from a company’s account through impersonation via phishing.

4. Loss of Productivity

Data breaches or system compromise arising from phishing attacks cause business disruption. Following a successful phishing attack, a large part of a business’ time will be spent on trying to recover lost data and investigating the breach with little left for actual business. Employees’ productivity will also take a hit as many systems are put offline for reconfiguration and cleaning.

5. Loss of Customers

Successful phishing attack scares customers away from a business. A UK survey revealed that more than half of consumers stop patronizing a hacked organization for several months after a data breach.

Some 41% of customers no longer patronize businesses that got their data leaked. This effect could haunt an organization for a long time.

6. Financial Penalties

When sensitive customers’ data end up in the public domain, the affected business is held responsible. In addition to the direct monetary loss from failure to defend against phishing, heavy regulatory fines can be placed on an organization for mishandling customer’s data.

The penalties target businesses that don’t follow best practices for protecting their customer’s private data. Violating regulatory requirements such as HIPAA, PCI, and European GDPR may attract heavy fines. The extent of the fines depends on the industry and the scope of the breach.

7. Intellectual Property Theft

A business asset isn’t just money or equipment, intellectual property could even be more important. Intellectual property may be stolen through phishing attacks and could even be the motivation for the attack in the first place.

Heavy investment goes into research and development, new technology as well as trade secrets. When these are compromised, they could setback the business involved and make them less competitive.

8. Loss of Company Value

Phishers can also cost a company a significant part of its market value as a result of the loss of investors’ confidence. Some investors would no longer trust the affected organization and may move their funds elsewhere to protect their portfolio.

A successful phishing attack can have multiple negative effects on an organization. This may include data loss, compromised credentials, ransomware, and malware infestation.
It is pertinent that you prioritize employee cybersecurity education, install advanced security solutions and implement policies that will block phishing attempts and protect your business from its impacts.

If you are interested in discussing options for securing your business against phishing attacks, get in touch with us today.

Common IT Security Compliance Pitfalls and How to Avoid Them

June 17, 2025
Meeting IT security compliance standards is crucial for businesses that handle sensitive data, particularly in industries such as healthcare, finance, defense, and e-commerce. Regulatory frameworks such as HIPAA, CMMC, PCI-DSS, and GDPR exist to help ensure businesses protect customer information and maintain robust cybersecurity practices. Unfortunately, many organizations fall short of these requirements, often due to common, avoidable mistakes. These gaps can result in costly fines, data breaches, and reputational damage, which can significantly impact the business's bottom line and customer trust. 1. Failing to Conduct Regular Risk Assessments The Pitfall: Many businesses overlook the importance of conducting routine risk assessments. Without these, it’s challenging to identify vulnerabilities or evaluate whether your current cybersecurity controls meet compliance standards. How to Avoid It: Implement a regular risk assessment schedule. Work with a qualified IT provider to evaluate your systems, identify weaknesses, and document remediation plans. These assessments should be performed at least annually, or whenever significant changes to the system occur. 2. Inadequate Employee Training The Pitfall: Your employees are your first line of defense—and often your most significant vulnerability. A common compliance issue arises when businesses fail to train staff on cybersecurity best practices or on handling sensitive data appropriately. How to Avoid It: Invest in ongoing cybersecurity awareness training. Ensure employees understand how to recognize phishing emails, create strong passwords, and report any suspicious activity. Training should be updated regularly to reflect current threats and compliance requirements. 3. Improper Data Handling and Storage The Pitfall: Storing sensitive data in unsecured locations, failing to encrypt information, or retaining data longer than necessary are significant compliance risks. These practices are often flagged during audits. How to Avoid It: Adopt data classification policies that define how different types of data should be handled; encrypt sensitive data both at rest and in transit. Establish clear data retention policies and ensure that obsolete data is disposed of securely. 4. Lack of Incident Response Planning The Pitfall: When a security incident occurs, time is of the essence. Many businesses lack a documented incident response plan, or their existing plan hasn’t been thoroughly tested. This can lead to delayed responses, increased damage, and regulatory penalties. How to Avoid It: Develop a formal incident response plan that includes roles, responsibilities, communication protocols, and steps for containment and recovery. Run simulated breach scenarios with your IT team to ensure everyone knows how to respond effectively. 5. Using Outdated Software or Systems The Pitfall: Running outdated operating systems, software, or firmware is a common issue that can lead to compliance failures. Unsupported technologies are more vulnerable to exploitation. How to Avoid It: Keep all systems and applications up to date with the latest patches. Use automated tools to track software versions and receive alerts about end-of-life technologies. Schedule regular maintenance windows to apply updates and upgrades. 6. Insufficient Access Controls The Pitfall: Allowing too many employees access to sensitive data—or failing to revoke access when it’s no longer needed—can lead to data breaches and non-compliance. How to Avoid It: Implement role-based access controls and follow the principle of least privilege. This principle means that each user should have the minimum level of access necessary to perform their job. Regularly audit user accounts and permissions to ensure access is current and appropriate. Use multi-factor authentication (MFA) to add an additional layer of protection. 7. Neglecting Third-Party Vendor Risks The Pitfall: Businesses often overlook the fact that their compliance responsibilities extend to third-party vendors. If a vendor mishandles your data, you could still be held accountable. How to Avoid It: Vet third-party vendors carefully. Ensure they meet the same compliance standards as your business and include security requirements in your contracts. Conduct periodic audits or request compliance certifications from your vendors. 8. Failing to Document Policies and Procedures The Pitfall: Even if your security practices are strong, failing to document your compliance policies can result in audit failures. Regulators want to see evidence that you have formal processes in place. How to Avoid It: Create and maintain clear documentation for all compliance-related policies, including data protection, access control, incident response, and employee training. Make these documents easily accessible for audits and regularly review them to ensure updates are current. Conclusion Compliance with IT security standards is not a one-time project—it requires ongoing attention, regular updates, and a proactive approach to maintain effectiveness. By understanding and addressing these common pitfalls, your business can stay ahead of regulatory requirements, strengthen its security posture, and reduce the risk of costly incidents. This ongoing attention is crucial to maintaining your business's security and audit readiness. If you’re unsure whether your business is meeting current IT compliance standards, professional support can help. Contact SDTEK today to schedule a compliance assessment and learn how our IT services can keep your business secure and audit-ready. With our support, you can navigate the complex landscape of IT security compliance with confidence.

Why Cybersecurity and Business IT Support Are Crucial for Fort Wayne Businesses

April 9, 2025
In today’s digital-first world, cybersecurity isn’t just a luxury—it’s a necessity. Whether you run a small startup or a growing enterprise in Fort Wayne , protecting your business’s data, systems, and clients is essential for long-term success. From ransomware attacks to phishing scams, cyber threats are evolving every day, and the best way to stay ahead of them is by partnering with a reliable IT services provider that understands the unique needs of local businesses. Here’s why investing in professional business IT support is one of the smartest decisions Fort Wayne businesses can make—and how working with SDTEK helps protect your operations, your data, and your reputation.