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Consumers Hold Businesses, Not Themselves, Responsible for Data Breaches

Consumers are increasingly aware of online security risks, but mainly hold businesses responsible for data breaches.

According to Gemalto’s 2016 Data Breaches and Customer Loyalty report, about 58% of consumers fear they will be victims of an online data breach—and 66% of them say they would be unlikely to do business with organizations responsible for exposing financial and sensitive information. Overall, respondents said that 70% of the responsibility for protecting and securing customer data lies with companies, and only 30% of the responsibility with themselves.

Cynicism is rife as well: Less than a third (29%) of consumers believe companies are taking protection of their personal data very seriously.

This comes as consumers are becoming increasingly fearful of their data being stolen, with 58% believing it will happen to them in the future. The majority of consumers who currently use the following, say they would stop using a retailer (60%), bank (58%) or social media site (56%) if it suffered a breach, while 66% say they would be unlikely to do business with an organization that experienced a breach where their financial and sensitive information was stolen.

Despite becoming more aware of the threats posed to them online, only one in ten (11%) believe there are no apps or websites out there that pose the greatest risk to them and consumers are not changing behavior as a result. For instance, 80% use social media, despite 59% believing these networks pose a great risk; and 87% use online or mobile banking, with 34% believing they leave them vulnerable to cybercriminals.

Consumers are also more likely to shop online during busy commercial periods such as Black Friday and Christmas (2% increase online versus -2% decrease in store), despite 21% admitting the threat of cybercrime increases a lot during these periods.

The study also found that fraudulent use of financial information has affected 21% of consumers, with others experiencing fraudulent use of their personal details (15%) and identity theft (14%). More than a third (36%) of those who have been a victim of a breach attribute this to a fraudulent website. Clicking a bad link (34%) and phishing (33%) were the next highest methods by which consumers were caught. In keeping with the theme of putting the blame at the organization's hands, over a quarter (27%) attributed the breach to a failure of the company's data security solutions.

The report also postulates that a lack of consumer confidence could be due to the lack of strong security measures being implemented by businesses. Within online banking, passwords are still the most common authentication methods—used by 84% for online and 82% for mobile banking, and more advanced transaction security the next highest for both (50% and 48% respectively). Solutions like two-factor authentication (43% online and 42% mobile) and data encryption (31% online and 27% mobile) trail behind.

Similar results can be seen in both the retail space, with only 25% of respondents that use online retail accounts claiming two-factor authentication is used on all their apps and websites, and in social media, with only 21% using the authentication for all platforms. Only 16% of all respondents admitted to having a complete understanding of what data encryption is and does.

"Consumers have clearly made the decision that they are prepared to take risks when it comes to their security, but should anything go wrong they put the blame with the business," said Jason Hart, CTO, Data Protection at Gemalto. "The modern-day consumer is all about convenience and they expect businesses to provide this, while also keeping their data safe. With the impending threats of consumers taking legal action against companies, an education process is clearly needed to show consumers the steps they are taking to protect their data. Implementing and educating about advanced protocols like two-factor authentication and encryption solutions, should show consumers that the protection of their personal data is being taken very seriously."

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