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April 18, 2013 /PRNewswire/ -- A global study of consumer attitudes towards company stewardship of personal data conducted by the Economist Intelligence Unit (EIU) shows that data breaches can cause major damage to the business of the companies affected.
The study, written by the EIU and entitled "Privacy Uncovered: Can private life exist in the digital age?", was sponsored by Beazley. It reflects the views of more than 750 consumers around the world, exploring in detail the link between trends in privacy and data security with businesses' use of consumer data. The EIU's report also includes commentary from regulators and business leaders on the study's findings.
More than 32% of respondents in the study said they "strongly agreed" with the statement that, in the event of a data breach, they would cease to do business with the organisation concerned. When they were asked whether they had personally suffered a data breach in the past two years, 23% of respondents said they had. Describing how they had reacted to a breach, 38% said they no longer did business with the organisation concerned "because of the data breach."
"Consumers clearly feel very strongly about the perceived betrayal of trust that a data breach represents," said
Paul Bantick, who heads Beazley's Technology, Media and Business Services team in
London. "The ripple effects can be very wide – the EIU research also found that 46% of respondents that had suffered a data breach had advised friends and family to be careful of sharing data with the organisation.
"There appears to be a strong willingness not just to cease doing business with a company that loses your data but to tell your family and friends about it – so there's a clear multiplier effect in terms of the reputational damage that can be inflicted," said Mr Bantick.