Many Americans Blame Merchants for Data Breaches: Survey
Three months after coming to light, the massive exposure of 40 million card accounts at Target Corp. still has the payments industry and consumers talking about what should be done to prevent this happening again. In the United States, that is.March 12
Over half of Americans blame Target and Neiman Marcus for the recent data breaches suffered by their customers and think merchants should prevent future incidents, according to a national survey commissioned by Feedzai.
About 60% of more than 2,000 respondents to the "2014 Consumer Reaction to Financial Data Breaches Study" conducted online by Harris Poll in January 2014 said merchants are responsible for data breaches, compared to only 13% who believe the responsibility falls on banks.
Only 5% of the respondents believe fraud is the consumer's responsibility, and about 13% of all those who are aware of any data breaches blame the government.
"Fraud prevention is now a matter of predicting complex consumer behavior based on changing sentiments," explained Pedro Bizarro, chief data scientist of Feedzai, a San Mateo, Calif., company that specializes in consumer data analytics, in a press release.
These findings show that consumers believe this collective problem is the merchant's responsibility, Bizarro continued, hence the industry needs to understand customers, and differentiate them from the criminals, in order to keep payment data safe.
About 22% of those who are aware of any data breach have changed their shopping behavior due to recent retail data breaches. Even though the recent data breaches happened in physical stores, 52% of the respondents still believe shopping in a physical store is safer and more secure than shopping online. Another 28%, or nearly 3 in 10 of these U.S. adults, have stopped shopping at the affected retailers, and up to 40 % have started using cash for more purchases.
Age differences also affect customer behavior: More than half (58%) of those who are aware of data breaches between the age of 18 and 34 believe fraud is part of the shopping experience, compared to only 38% of those aged 55-64.
Social media is another factor. These consumers reportedly "are checking in over 1.8 million times a day on Facebook alone," to find useful information about authorizing financial transactions. One in five, or 18% of consumers with a social media would be likely to include their bank as connections on their social media list of contacts.
All these findings also suggest "more consumers would be willing to connect with banks that can provide the right incentives," Bizarro says.