October 31st, 2014 by Elma Jane
It is a given that damage to a retailer’s reputation is one of the biggest negative outcomes from a big data breach. However, research said that customer service or the lack thereof, is a bigger turn-off for consumers than a data breach, and by a wide margin.
In April 2014 research, 75 percent of almost 800 survey respondents said poor customer service would have the greatest impact on a company’s reputation. Some type of environmental incident was the second most determining factor in reputational damage, at 33 percent, with a data breach coming in third at 30 percent.
Data breach management
According to the 2014 survey, businesses can do themselves the most good in the wake of breaches by explaining the potential risks or harms of the compromises, disclose the facts of the incidents and tell the unvarnished truth. Sixty-seven percent of respondents believe explaining the risks/harms to them of data breaches is the best way companies can improve communications, followed by fact disclosures and not sugar coating the message.
When asked what businesses could do to prevent customers from ending relationships with them following breaches, 41 percent said offering free identity theft protection and credit monitoring services would help out.
Consumer attitudes contradictions
When consumers are victimized by data breaches, their fears of also becoming victims of identity theft increase. Following a data breach, that fear nearly doubles. Furthermore, following breaches, victimized consumers in the survey said that their identities were at risk for years or forever.
But curiously enough, when consumers received data breach notifications that they may have been victimized, 32 percent of respondents ignored the notifications and took no action and only 18 percent followed the advice provided in the notifications.
Nevertheless, most consumers seem to recognize what types of data are the most sensitive and would cause the most stress and financial damage if compromised. Respondents said the compromise of Social Security numbers would lead to the most potential damage, followed by password/PIN and bankcard account information.
If you are out of business because of financial impact the data breached cost you. How good is your service? Losing even a single customer can be very costly. It’s critical for companies to turn a complaint into a positive for the customer and for the company moving forward.
Posted in Best Practices for Merchants Tagged with: bankcard account, consumers, credit monitoring services, customer service, data breach, password/PIN
September 23rd, 2014 by Elma Jane
Home Depot, US retail chain says that 56 million payment cards are at risk following a malware-laden cyber-attack on eftpos tills across its stores in the US and Canada.
The investigation into a possible breach began on September 2nd,Tuesday morning, immediately after Home Depot received reports from its banking partners and law enforcement that criminals may have breached its systems.
According to Home Depot’s security partners, the malware had not been seen previously in other attacks.
Criminals used unique, custom-built malware to evade detection. The cyber-attack is estimated to have put payment card information at risk for approximately 56 million unique payment cards, after lurking in the company’s eftpos tills for four months between April and September.
While the breach has been seen as a further proof-point in the US push to adopt Chip and PIN at the point-of-sale, the fact that the outbreak also hit the home improvement chain’s Canadian stores, where the EMV standard has been implemented, leaves pause for thought. Nonetheless, the retailer has committed to installing 85,000 PIN pads at its US outlets, well ahead of the national 2015 deadline.
Home Depot has set aside $65 million to cover the cost to investigate the data breach, provide credit monitoring services to its customers, increase call center staffing, and pay legal and professional services. Approximately $27 million of the projected outlay will be covered by the company’s insurance.
Posted in Best Practices for Merchants, EMV EuroPay MasterCard Visa, Point of Sale Tagged with: banking partners, Breach, call center, card information, cards, Chip and PIN, credit monitoring, credit monitoring services, customers, cyber-attack, data breach, EMV, EMV standard, Malware, payment, payment card information, payment cards, PIN pads, point of sale, risk
