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Consumers Punish Firms That Lose Data
Most consumers are willing to terminate their accounts with a firm that loses their consumer data, and 19% do it right away, according to recent studies.
November 14, 2005
1 Min Read
Consumers severely punish corporations that lose their data, with a majority willing to terminate their accounts with the guilty companies, a pair of surveys said on Monday.
According to polls conducted on behalf of encryption vendor PGP Corp., 19 percent of consumers whose data was lost, stolen, or misplaced immediately canceled their accounts with the negligent vendor. Another 40 percent were considering calling it quits.
One of the polls asked companies to comment on their data breaches and associated costs, while the other surveyed consumers.
Among the results from the corporate survey, said PGP, was an average cost of $14 million per data breach, which included everything from investigative and call center costs to investor relations efforts and the loss of customers. The average cost per lost customer record was $140, the poll concluded.
On the consumer side, 12 percent of the 9,000 randomly-selected Americans said that they'd received a breach notice in the past year. Extrapolating those numbers, PGP said that that meant some 23 million Americans adults had been so notified in the last 12 months.
"A brand reputation built with hundreds of millions of dollars over decades can be destroyed by careless handling of private customer information," said Andrew Krcik, vice president of marketing for PGP.
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