SOURCE: Ponemon Institute
April 15, 2008 14:17 ET
Ponemon Institute Examines Consumer Response to Data Breach Notice
Study Reveals 63 Percent of Consumers Dissatisfied With Data Breach Notification and Response Methods
TRAVERSE CITY, MI--(Marketwire - April 15, 2008) - A new study conducted by the Ponemon
Institute shows that consumers are dissatisfied with the notification
process used by companies following a data breach affecting their personal
information. Sponsored by ID Experts, the Consumer's Report Card on Data
Breach Notification revealed 63 percent of survey respondents said
notification letters they received offered no direction on the steps the
consumer should take to protect their personal information. As a result, 31
percent said they terminated their relationship with the organization. In
addition, 26 percent of respondents took no action after being notified and
57 percent said they lost trust and confidence in the organization.
The Consumer's Report Card on Data Breach Notification is being released
today when Ponemon Institute chairman and founder Dr. Larry Ponemon
presents the study's findings at the Federal Trade Commission workshop,
"Protecting Personal Information: Best Practices for Business." The
one-day public event takes place at 8:00 a.m. at the Thorne Auditorium of
the Arthur Rubloff Building on the Chicago campus of the Northwestern
University School of Law.
"Data breach notifications are a failure if individuals do not have a clear
understanding of their level of risk, available support, and the steps they
need to take to respond to the loss or theft of their personal
information," Ponemon said. "Our research strongly suggests that legal
compliance is the primary goal of many companies' notification efforts.
This approach does not serve the best interests of consumers and
contributes to a breakdown in trust that can impact a company monetarily as
a result of an increase in customer defection."
Other key findings from the Consumer's Report Card on Data Breach
-- Fifty-five percent of respondents had been notified of two or more
data breaches in the previous 24 months, including 8 percent with four or
-- More than 55 percent of respondents state that the notification about
the data breach occurred more than one month after the incident, and more
than 50 percent of respondents rated the timeliness, clarity, and quality
of the notification as either fair or poor;
-- Less than one-third of respondents said that the organization offered
services to protect them from further harms; of those who opted into such
services, 97 percent rated them good to excellent; and,
-- Two percent of respondents that had been notified of a data breach
experienced identity theft as a result of the breach, while 64 percent were
unsure if they were a victim of identity theft.
"The fact that 31 percent of respondents terminated their relationship with
the organization is very alarming to the bottom-line," said Rick Kam,
president of ID Experts. "Consumers need a mix of forthright timely
notification, complementary protection services and recovery assistance to
feel an organization has gone the extra mile to make up for such a critical
mishap. Considering the cost of customer acquisition in today's market,
businesses need to invest in keeping happy customers."
The Consumer's Report Card on Data Breach Notification was derived from the
responses of 1,795 adult-aged respondents located throughout the United
States. Copies of the Consumer's Report Card on Data Breach Notification
will be available by request after April 15, 2008 by visiting
http://www.idexpertscorp.com and clicking on the New Ponemon Study link.
About ID Experts
ID Experts provides identity theft protection services for individuals,
corporations and the public sector. Unlike other identity theft protection
service providers that rely solely on credit monitoring, ID Experts takes a
uniquely personal approach to identity protection -- whether it's a single
individual or family, or up to the largest corporations, government
agencies and universities, ID Experts ensures each and every individual
receives protection and recovery assistance. Today, ID Experts protects
more than 3 million individuals nationwide from identity theft. These
customers benefit from ID Experts' team of experienced identity recovery
advocates who have a 100 percent success rate in restoring victims'
identities to pre-theft status. For more information visit
About the Ponemon Institute
The Ponemon Institute© is dedicated to advancing responsible information
and privacy management practices in business and government. To achieve
this objective, the Institute conducts independent research, educates
leaders from the private and public sectors and verifies the privacy and
data protection practices of organizations in a variety of industries.