ID theft growing by proverbial leaps and bounds and customers shying away from companies that have been breached may be pointing out the obvious. However, Mark Huffman, in his article on consumeraffairs.com, puts numbers to suppositions that are often taken for granted.
In his piece, he looks at recent surveys from the Pew Research Center and Javelin Strategy & Research to quantify the effects of identity theft and online breaches. (The following has been edited to fit our format.)
Researchers at the Pew Research Center report 18% of adults who spend time online have had important personal information – such as Social Security, bank account and credit card numbers – stolen. That’s an increase of 11% over the number of reported victims in July 2013.
“Anyone can be an identity theft victim, but we’re especially concerned about younger people who spend so much of their time online and may not be aware of the dangers to themselves and others,” [noted Susan Grant, Consumer Federation of America (CFA) Director of Consumer Protection.] “Even if it’s just someone hacking into your social networking account to post embarrassing photos or malicious messages and make it look like you did it, it could cause you a world of pain.”
CFA recently produced a YouTube video aimed at young consumers, using humor to drive home the dangers of identity theft.
In Pew’s 2013 survey 7% of online adults ages 18-29 said they were aware that they had important personal information stolen. The latest survey found that number had more than doubled, to 15%.
At the same time older adults, those ages 50-64, reported significantly more cases of identity theft. The percentage jumped from 11% last July to 20% in the 2014 survey.
Breaches Affect Consumer Behavior
Javelin Strategy & Research recently compiled a report showing that consumers shun breached organizations at a significant rate, doing business with competing businesses that have not suffered a breach.
Specifically, financial and banking institutions, healthcare providers and retailers stand to not only have significantly increased expenses but also lose up to one-third of their customer/patient base after a data breach.
For example, 33% of consumers said they will shop elsewhere if their retailer of choice suffers a data breach.
“A significant proportion of affected consumers discontinue or reduce their patronage post-breach,” said Al Pascual, an analyst at Javelin Strategy & Research. “That’s real money lost in customer churn and reduced sales, and certainly demonstrates how the reputation of the organization hits the bottom line.”
Though medical record breaches have been less frequent than in retail, Pascual says it’s worth noting that 30% of patients said they would go as far as to find a new doctor if their provider were breached.
ThreatMetrix builds trust on the Internet by offering market-leading advanced fraud prevention and frictionless context-based security solutions. These solutions authenticate consumer and workforce access to mission critical applications using real time identity and access analytics that leverage the world’s largest Trusted Identity Network.