Data Leaks Dent Consumer Confidence and Reputation

Consumers strongly prefer to buy from companies that have not suffered data leaks or data theft, according to a new survey conducted for internet security company Check Point Software Technologies.

The Check Point & YouGov survey of over 2100 British consumers highlighted how consumers’ trust of a company and its brand was affected by leakage or theft of personal, confidential data. It also showed how important it is to consumers that companies secure and protect their personal data, such as credit card details, addresses and other sensitive records.

The survey found that 91% of the sample would actively prefer to buy from a company that had never had a data breach, in preference to one that had suffered a breach. 39% of respondents went further, saying they would not buy again from a company that had lost data, if they could buy the same goods or services elsewhere.

Nick Lowe, Check Point’s regional director for Northern Europe said: “This year has seen several leading, international companies and the Government suffering large-scale data breaches, either through malicious hacking attempts, or simple loss or theft of discs and laptop computers. This has made consumers much more aware of the risks to their personal data once it is outside of their control.”

75% of the sample said they would not trust a company that they knew had suffered a data breach, and 79% said they would warn friends or family not to buy from a company that experienced a data breach. This highlights the wider impact of breaches on a company’s reputation, and how loss of consumer confidence spreads far beyond those directly affected by a data breach.

Overall, 96% of respondents agreed that it was important for companies to securely protect consumers’ personal data.

Nick Lowe added: “The survey shows that data breaches don’t just cause a loss of trust. Consumers will actively choose to do business with another company that has not suffered data loss, because they don’t want to become innocent victims. It’s clear that consumers expect companies to protect their sensitive data against leakage or theft wherever it sits – in a data centre, on the company network or on a laptop. Businesses need to update their security policies, and implement safeguards against data leakage, such as encryption, to retain consumers’ trust and confidence.”

Check Point recommends that companies consider these steps to help cut the risks of data breaches:

1. Encrypt all sensitive data, especially customer data. This cuts the risks of data being accessed or used if it is lost or stolen by whatever means.

2. Don’t allow employees to connect devices such as mp3 players, USB memory devices or digital cameras to company computers or networks. They can siphon huge amounts of data from companies, but solutions are readily available to control their use.

3. Companies should monitor and control the websites and software used by all employees. Instant messaging and social networking applications can be a route to exposing sensitive information.