Americans are rethinking their buying decisions as a result of threats over identity theft, credit card hacks and other cyber assaults, according to a new study by law firm Morrison & Foerster.
In recent years it has become increasingly evident that privacy presents real business risks that have the potential to negatively impact a company’s bottom line, from the legal fees associated with a data breach to a decline in revenue stemming from a loss in consumer trust.
Last November, Morrison & Foerster conducted an online survey of more than 900 consumers across the U.S. to gauge their attitudes and concerns about various privacy issues. The results were released two days before Data Privacy Day on Thursday.
Over the last few years, heightened concerns over cyber attacks have followed major breaches at stores such as Target, Neiman Marcus and Home Depot, as well as breaches at federal government agencies.
Among the key findings of the study are that more than a third of consumers have chosen not to buy from a company because they are concerned about data privacy in the past year. Among those identifying themselves as vigilant on privacy issues, 82 percent boycotted a company over such concerns, up from 54 percent when the survey was conducted in 2011.
Further, more educated, higher-earning consumers are more likely to stop buying from a business because of a data breach. Among respondents, about 22 percent reported that they no longer purchased products or services from a company because of a reported data breach. A deeper dive reveals that the key demographic of better educated, higher-earning consumers react most negatively to this scenario, with 33 percent of people at an “upper income” level (defined as $100,000-plus) and 28 percent with an undergraduate or postgraduate education stopping to buy from a business because of a data breach.
According to the study, identity theft remains consumers’ number-one anxiety, with more than 50 percent of the respondents calling it their top concern, far overshadowing fears over right to privacy and other issues. This compares to 20 percent who responded this way when the survey was conducted in 2011. But some 24 percent of consumers believe that no business is perfect in safeguarding their information.
As difficult as the private sector has had it on cyber-trust issues, the government may be faring worse, with nearly three times as many respondents (37 percent versus 13 percent) saying they trust private business on data security more than the government, with the remaining 50 percent trusting them equally.