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Study of victims shows how to handle a data breach
SAN FRANCISCO (6/24/08)--When a data breach occurs, what do consumers expect of their financial institution? A recent study indicates that offering a preventative solution for the future--without being asked to do so--helps ease any loss of confidence from a data-breach victim. Javelin Strategy & Research, a San Francisco based research of financial services topics, surveyed 400 data breach victims about their expectations for the breached institution. More than half (55%) of consumers who had experienced a breach expressed diminished confidence in the organization's ability to protect and manage their personal data. When consumer confidence is shaken, it weakens relationships with the institution, said Javelin's report. Fifty-six percent of data breach victims favor a solution that prevents fraud, Javelin said, who added that these efforts will help mitigate any decreased confidence related to a breach:
* Contact the member/consumer; * Create an audit trail that law enforcement can use; * Preserve the member/consumer's privacy; and * Prove that the solution works.
Providing a fraud solution makes a difference in customer approval of a breached organization's management and handling of the incident, said Javelin. Of those who were offered a fraud protection solution, 55% were more satisfied with the institution's handling of the incident than were consumers who were not offered the solution. Javelin made these recommendations:
* Given the variety of fraud-protection solutions and their varying features, engage in comprehensive research of the services available to understand how they play a role in prevention, detection and resolution of fraud. * Select a solution that is convenient and easy for the breach victim, both in terms of enrollment and use, with an understanding of the impact on prevent new accounts fraud. * Understand that offering a breach solution is a "best practice" from a member/customer service standpoint. Avoid creating a situation in which members and/or employees have to ask for fraud protection assistance. Take the proactive approach and offer the assistance up front.
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