Survey says security breaches cost companies customers

The Ponemon Institute, which is a good source of such things, has conducted a survey of consumers in the United States which suggests that consumers are willing to show their displeasure over security breaches by ending relations with companies that have compromised their data:

Data Security Breaches Impact Corporate Bottom Lines:

"...'Companies lose customers when a breach occurs. Of the people we surveyed who received notifications, 19 percent said that they have ended their relationship with the company after they learned that their personal information had been compromised due to security breach. A whopping 40 percent say that they are thinking about terminating their relationship,' said Larry Ponemon, founder and head of the Ponemon Institute.

Even more disconcerting, the survey also reveals that five percent of Americans have hired lawyers upon learning that their personal information may have been compromised.

'Five percent may not seem like much, until you realize that anywhere between 23 million and 50 million Americans have received notification of a data security breach. That means that over one million people out there are likely seeking legal counsel,' said David Bender, co-head of White & Case's privacy practice. 'This should be particularly troubling to companies, especially in light of several putative class-action lawsuits recently filed in California against companies that experienced security breaches.'

Bender added that while it's unclear just how any court might calculate damages for customers whose personal information has been breached, but have not suffered any clear harm, the fact that the plaintiff's bar is taking on such suits means they anticipate that courts may commiserate with customers' frustration over breaches...."

More coverage at Computerworld: Survey: Security breaches could prove costly to data companies.