Study Says Consumers Won't Shop With Companies After Tech Breach

credit cardsNearly two-thirds of consumers surveyed worldwide say they are unlikely to shop or do business again with a company that had experienced a breach where financial information was stolen, and half of them had the same opinion when it came to data breaches where personal information was stolen. This is according to a recent global survey by Gemalto, a digital security firm, that reveals the impact of data breaches on customer loyalty.

The research report titled “Broken Trust: ‘Tis the Season to Be Wary,” reveals that as more consumers rush to complete their shopping during the holiday season. Six in 10 people surveyed (59 percent) believe that threats to their personal information increases during the festive season, and two in 10 (18 percent) believe that they are likely to be a victim of a breach during the holiday season.

Only a quarter said they thought companies take the protection of their data seriously. The vast majority (69 percent) believe it is the organization’s responsibility to secure their data rather than their own (31 percent).

In a wake-up call to companies that don’t pay close enough attention to customer data security, around a quarter of respondents (23 percent) who have been the victim of a breach claimed they’d consider legal action against the company, reports Info Security. If this year follows the same pattern as 2014, those respondents to the Gemalto survey could well be right when it comes to festive season cyber attacks.

The survey revealed that 31 percent of respondents have already been affected by data breach in the past. Around four in ten state the most likely causes for being a victim of a breach are visiting a fraudulent website (42 percent), phishing attacks (40 percent) or clicking a fraudulent web link (37 percent). The emotional impact of data breaches has also created apprehensive feelings towards businesses with nearly one fifth surveyed (19 percent) feeling they are likely to be a victim of one within twelve months to three years, CXO Today reports.

Ninety percent of surveyed consumers feel that there are apps and websites that pose significant risks to the protection and security of their personal information. Fifty-five percent believe that social media sites expose them to the greatest risk, and around two in five respondents believe adult content and torrent apps/websites carry the greatest risk to the security of personal information.

"The media coverage of massive data breaches has done little to instill consumers' confidence in how well companies, big and small, are protecting their data," said Jason Hart, VP and chief technology officer for data protection at Gemalto, in the report. "The fact that employees don't even feel that their employers are taking the protection of their personal data security very seriously rings alarm bells. Either companies need to increase their security measures or, assuming that they already have these in place, they need to communicate this to their customers."

"As companies collect ever-increasing amounts of customer data and as our digital interactions become more diverse, more data about what we do, who we are and what we like is being stored online," continued Hart. "The survey proves that the traditional data security mind-set needs to evolve, this goes for companies and consumer adoption of advanced security measures like two-factor authentication. Otherwise, an increasing numbers of consumers will cut ties with companies who aren't taking data protection seriously, and take their business to someone they can trust."

Source: Gemalto