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New Javelin Strategy & Research/National Consumers League Study: Consumers Losing Trust in Businesses, Expect Government Action on Fraud and Data Breach

Today, the National Consumers League #DataInsecurity Project released a new survey of identity fraud victims which finds that Americans are urgently calling out for government action on the growing threat posed by data breach and identity theft.

The study, conducted in partnership with Javelin Strategy & Research, shows that the consumer impact of data breach is indeed severe: 61 percent of data breach victims surveyed reported that the breached information was used to commit fraud against them. What’s more, nearly half of victims--49 percent--do not know where the information used to defraud them was compromised.

The National Consumers League has launched the #DataInsecurity Project to raise awareness and push for action on consumer data security. NCL kicked off its cross-country series today in Florida, the state that is the source of more ID Theft complaints per capita than any other in the nation, with an event in Miami featuring United States Attorney for the Southern District of Florida Wifredo Ferrer. The next event is July 8 in Los Angeles featuring Federal Trade Commission Commissioner Terrell McSweeny and Joanne McNabb, Director of Privacy Education & Policy for the California Department of Justice, Office of the Attorney General.

“Data insecurity is leading to real consumer harm and this report confirms consumers are at a loss for where to turn in the face of this national problem,” said John Breyault, NCL’s Vice President of Public Policy, Telecommunications and Fraud. “As consumers share vast amounts of personal data with businesses, government and other entities, they expect their information to be protected from malicious hackers.”

The NCL/Javelin study, which includes surveys of fraud victims from Los Angeles, Chicago, Minneapolis and South Florida, along with additional Javelin research on national fraud trends, found that consumers are calling for government to take action. A mere 28 percent of victims surveyed said the government’s requirements for protecting healthcare and financial data were “sufficient.”

“In this polarized political climate, it’s rare for Americans to express such agreement on any issue,” said Al Pascual, Javelin’s Senior Analyst of Fraud & Security. “But when it comes to the security of their personally identifiable information, the respondents said with one voice that the government must do more.”

According to the new study, the consequences of consumer fraud have a serious ripple effect: fraud victims report losing trust in the businesses where their data was compromised. For example, 59 percent of respondents report whose data was breached at a retailer expressed “significantly decreased” trust in retailers who failed to protect their information. “When consumer trust drops, so do sales,” added Breyault, “This study is only the latest evidence for why the business community should be one of the most vocal advocates for protecting consumer data.”

About the National Consumers League

The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

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