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Data Theft Incidents Influence Consumers Adversely

Consumers are beginning to think negatively about banks and other financial institutions being influenced by incidents of data and information theft, according to a survey.

Ipsos MORI conducted the survey on behalf of database security company, Secerno. In that most of the respondents said when institutions suffer a data breach, they should inform their customers about it. Of them, 82% wanted immediate notification in case of a breach into the institution's soft data.

The respondents also considered time as the crucial factor in reporting data theft.

However, retailers and financial services companies are reluctant to be vocal about such incidents for fear of loss of customers. On being asked about their reaction to such breaches, 53% of the 1,200 adults said they would no longer avail the services of an institution that reported a data security violation.

In the views of Paul Davie, CEO of Secerno, people are increasingly getting sensitive to this kind of mishap. Davie told this to silicon.com that published it on April 17, 2007.

Further during the survey, one-third of the participants said they would certainly not give out their personal and financial information online for fear of security failures.

The research findings followed after recent occurrence of consumers' data theft from retailer TK Maxx's records and a similar case with building society, Nationwide.

Davie expressed that there should be laws to ask companies to make public their data breaches.

In U.K. there is no law requiring retailers and other organizations to disclose news about their data loss to customers not even to those who directly suffer from the breach.

Davie calls for the government's involvement as it is in the U.S. with regard to requiring such disclosures. If there are legal sanctions against concealing data theft news, then companies' senior management will get a better stimulus to adopt appropriate security measures to ensure such events don't repeat.

Earlier in March 2007, Computing.co.uk reported a study by The Aziz Corporation that said consumers might store their financial details on the Internet if it increased in the speed of online retail transactions.

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