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Pressure is growing for businesses affected by a credit card data breach to take immediate steps to restore public confidence, Rachel Kim, a research analyst at Pleasanton, Calif.-based Javelin Strategy & Research, tells Collections & Credit Risk, a CardLine sister publication. "The potential repercussions beyond identifying and preventing potential fraud are starting to turn a lot of heads," she says. Indeed, there is a right way and a wrong way to deal with a data breach, says Lisa Sotto, a partner and head of the privacy and information practice in the New York office of law firm Hunton & Williams LLP, which advises clients following data breaches. "There is always going to be a portion of the customer base that needs more personal attention and that requires a plan to balance automated and personal responses, since not everyone can receive that level of attention," she says. "Customers who have a negative experience after a breach won't come back, and they will tell others of their experience." A recent Javelin study found that breaches can severely damage a merchant's relationship with the consumer. The survey of 400 consumers who had personal or financial information compromised by a data breach revealed that 40% of respondents changed their relationship with the affected company, 55% said they lost trust in the company and 30% chose to stop doing business with the company (CardLine, 6/23).
