May 15, 2014

Data breaches can have as much impact as poor customer service in their effects on brand reputation, according to a study published Wednesday.

The new survey, "The Aftermath of a Mega Data Breach: Consumer Sentiment," was conducted by the Ponemon Institute and sponsored by Experian's Data Breach Resolution unit. It asked more than 700 consumers about their attitudes toward a company's brand, and their willingness to buy in the wake of specific events.

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According to the study, the three occurrences that have the greatest impact on brand reputation are data breaches, poor customer service, and environmental disasters. These incidents were selected ahead of publicized lawsuits, government fines, and labor or union disputes.

Breaches also have a major impact on customer fears about identity theft, the survey says. Prior to having their personal information lost or stolen, 24 percent of respondents said they were extremely or very concerned about becoming a victim of identity theft. Following the data breach, this concern increased to 45 percent, Ponemon says. Almost half of respondents feel their identity is at risk for years or forever.

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