Examples of Breach of Data Protection Act : Current Data Protection Legislation
A data protection breach isn’t just an inconvenience, and losing company data is less costly in the long run than compromising the privacy of users’ data. Public and private law suits can easily cost businesses millions of dollars. The loss of customers will hurt even more in the long run. You can never care too much about data security. You have more to lose than you may think.
Compensation for Breach of Data Protection Rights
Data protection breach compensation is no small fee. Attorneys for all injured parties often pool their resources to make the strongest possible case against businesses that suffer data breaches. Customers are entitled to compensation for breach of data protection rights. When you have data for millions of users, those costs add up quickly.
Nationwide Insurance is currently dealing with the fallout of their 2012 data breach. The breach compromised private information from over a million individuals. The company has gotten off fairly lightly, and they’ll only have to pay 5.5 million dollars. When you compare that to the number of individuals compromised, it’s easy to see how the costs could have been worse. Still, five million dollars isn’t a light price from any business’s point of view. Added to the monetary penalty, Nationwide Insurance will have to step up their data security measures, which will come at additional cost to the company.
This is a recent example, and history is full of larger monetary losses. Businesses can’t, in all fairness, blame their customers for seeking reparations, either. People can open new credit accounts in a matter of minutes, all through the anonymity of the internet. What makes for happier customers, however, sometimes makes for happier criminals, too. Armed with personal details snatched from a data breach, it’s easy to trick vendors and banks into giving criminals what they want. Identity theft is hard to correct. Individuals can suffer the consequences of such crimes for decades after the fact. They must invest countless hours changing personal information, informing and cooperating with authorities, and resolving credit and purchase disputes. It’s in customers’ best interests to turn to those they trusted with such sensitive information for compensation.
Consumer Loyalty after a Data Protection Breach
Once a business makes it to the news with reports of a data protection breach, they will never be able to erase that stain from their reputation. Consumers want to place blind trust in businesses, and whenever a business suffers an attack, it makes such trust impossible. The effects hit businesses on the same day the breach is announced. Stock prices drop, and profit margins dwindle. It takes tremendous effort to recoup these losses, and many businesses never recover. Without aggressively pushing a new, better data security plan, most businesses will fail to win back their customers.
A data protection breach can be devastating to your business. Understanding what’s at stake, can help you better prepare and protect your data. While businesses can offer refunds for faulty products and issue apologies for poor marketing choices, they cannot smooth away the damage of a data breach. Taking action now can save millions down the line.