Retail Breaches Change Customer Behavior, Attitudes, Studies Say

U.S. consumers are beginning to see the impact of the recent spate of credit card data breaches at retail stores -- and they are doing something about it.

That's the conclusion of two separate studies of consumer attitudes and behavior published this week. The first study, National Consumer League's Data Insecurity Report, indicates that consumers are increasingly blaming retailers for the compromise of their credit card data and are responding by changing the stores they patronize.

The second study, Security Matters: Americans on EMV Chip Cards, indicates that nearly two thirds of Americans are more likely to pay in cash after hearing about security breaches at large retailers.

The NCL study, which was conducted by Javelin Strategy & Research on behalf of the consumer group, indicates that about one in three consumers who receive notice of a data breach subsequently become the victims of fraud. In a survey of victims in major U.S. metropolitan areas, 61 percent of fraud victims said they are "certain" that breaches of their data at retail sites were the source of the fraud. About a third pointed to large retail merchants directly.

Nearly 60 percent of fraud victims said their trust in retailers has significantly decreased after their data was compromised. Fourteen percent said they avoid certain merchants because of the potential for fraud. Only 10 percent of consumers said they believe retailers can keep their data safe.

Confidence in financial institutions remains higher, according to both surveys. Twenty-eight percent of fraud victims in the NCL study said they lost confidence in their financial institutions following their experiences. The second study, which was conductioned by research firm Vision Critical on behalf of payment technology vendor NXP Semiconductors, moree than 70 percent of Americans are confident in the security of their debit/credit cards, even after the news of major retail breaches.

However, many Americans are changing their payment strategies, the NXP study says. Some 64 percent of respondents say they are more likely to pay in cash after hearing about security breaches at large retailers, the survey says.

According to the NCL study, many Americans believe that government should step in and take a more active role in protecting consumer data. The NCL used the survey findings to call for national data breach notification standards, better protection of personally-identifiable information, increased penalties for online data theft, and increased partnerships with overseas law enforcement agencies to stop cyber criminal attacks from other countries.