Study: Customers don't want data handled by outside vendors

[OhioChick]

They'll likely go elsewhere if a data breach occurs

October 24, 2006 (Computerworld) -- A customer will likely forgive a company once if a data security breach occurs and some of that customer's personal information is put at risk. But if the breach comes at the hands of a third-party vendor working for the original company, customers are likely to be less forgiving and will bolt to another firm for their products and services.

Those are some of the conclusions from a 17-page report, the "2006 Cost of Data Breach Study," released yesterday by the Ponemon Institute LLC, an Elk Rapids, Mich.-based firm that looks at information and privacy management practices in business and government.

"It turns out that a major cost... lost business opportunities" when customers no longer trust companies they have worked with and seek out new business relationships, said Larry Ponemon, founder and chairman of the Ponemon Institute and an occasional Computerworld columnist. Given the recent spate of corporate data breaches involving lost laptops, stolen computers and hacked networks, Ponemon said he expected people to become desensitized to the problem -- and complacent.

~snip~ The breaches that were studied affected between 2,500 and more than 160,000 customers. Lost or stolen laptops, desktop computers, PDAs or thumb drives accounted for 45%, or 14 of the events. Lost or stolen files acquired or used by third-parties or outsourcers accounted for 29% of the breaches, or 9 events. Lost or stolen backup tapes or other media accounted for 26% of the incidents, or 8 events. And there were four incidents involving lost or stolen paper records, which made up 13% of the breaches.

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9004414

[Anakin Skywalker]

1. Doh! They Needed a Study to Know This?