Cyber attacks and data breaches are becoming increasingly common, and consumers are at the forefront of this growing threat. In today’s digital world, consumers are constantly sharing their personal and financial information online, making them a prime target for hackers.
The negative effects of cyber attacks and data breaches on consumers can be devastating. Victims may face financial losses, identity theft, fraud, and other serious consequences. In addition, cyber attacks can also cause emotional distress and inconvenience for those affected.
By and large, many companies don’t live up to consumers’ expectations when it comes to transparency and providing adequate security for their data. Nearly 60% of consumers surveyed by McKinsey say they believe that companies care more about making money on their personal data than they do about protecting it. As a result, here are some of the impacts and effects cyber attacks have on individuals and what they’re doing about them.
Reported Potential Losses for Americans Topped $10.2 Billion in 2022
Earlier this year, the FBI’S Internet Crime Complaint Center (IC3) released its 2022 Internet Crime Report. Although the total number of reported cyber attacks and incidents decreased in 2022 (i.e., 800,944 complaints in 2022 compared to 847,376 the prior year), the potential total losses have skyrocketed to nearly $10.3 billion. This is an increase of nearly 158% over 2021’s $6.9 billion in total reported losses.
To put this in perspective, let’s take a quick look at the total reported losses that were reported to the FBI’s IC3 over the last 10 years. These said losses have jumped from over $525 million (which was already a lot) to more than $10.2 billion:
Something important to keep in mind when reading these gut-wrenching numbers is that this data only represents reported cyber attacks and breaches. It doesn’t include those situations that remain undiscovered and others that don’t get reported.
68% of Consumers Won’t Make Purchases Through Websites They Perceive as Insecure
Data from Axway’s 2022 Global Consumers Survey shows that consumers are making their distrust clear through their wallets. More than two-thirds of the customers surveyed say that an online retailer’s demonstrated lack of personal data security would be enough of a turnoff that they wouldn’t make purchases through their websites.
The Baymard Institute’s 2022 survey data also shows that nearly one in five adult consumers in the U.S. abandon their online shopping carts when they don’t trust websites to protect their credit card information.
Consumers Report Prioritizing Companies That Have Digitally Trustworthy Reputations
Interestingly enough, another way that consumers are “voting” with their wallets is by seeking out businesses that are known for having strong reputations regarding customer data and privacy protection. Data from McKinsey shows that, aside from the price, quality, and delivery speed, some of consumers’ top purchase decision considerations are:
- Whether they feel that the company is trustworthy, and
- How much personal data the company requires.
Consumers in the European Union (EU) fall under the General Data Protection Regulation (GDPR), which holds organizations to more stringent data security, privacy, and reporting requirements than most U.S. state laws. (Note: The U.S. doesn’t yet have such a comprehensive federal law.) The regulation requires companies to disclose what information they collect, and how it’ll be collected and used, and requires them to give consumers an opportunity to opt out. It also has stringent data breach reporting requirements and noncompliance fines to discourage companies from “coloring outside the lines.”
This brings us to our next point on what happens when companies violate that trust…
75% of Consumers Won’t Deal With Companies That Have Been Compromised
Three in four respondents in Axway’s 2022 Global Consumers Survey indicate that they would stop doing business with companies that have either fallen prey to cyber attacks or have experienced data breaches.
Customer trust is fragile and should be handled with the utmost care. Research by DigiCert shows what happens when consumers lose their trust or faith in an organization: 84% of consumers will move their business to another company. This means that if their trust in your organization is lost or damaged, your competitors will be there to welcome your customers with open arms.
Patients’ Health & Privacy Take a Toll as 89% of Healthcare Organizations Report Attacks
Alright, it’s time to wrap up our list of the negative effects of cyber attacks. Although Malwarebytes reports that half of their surveyed consumers feel more confident in healthcare organizations protecting their sensitive personal data than other organizations, that sentiment isn’t likely to stay positive in the long run.
Cyber attacks on healthcare organizations soared 74% from 2021 to 2022, according to Check Point Software’s latest research. The company’s 2023 Cyber Security Report shared multiple attacks, which resulted in the theft of patients’ records, disruption of care, and medical harm to patients. Nearly nine in 10 healthcare organizations reported experiencing cyber attacks within the previous year.
Some examples of the reported targeted healthcare organizations include:
- CommonSpirit, the second-largest non-profit hospital company in the U.S., reported a ransomware attack between September and October 2022 that affected the IT systems at an unspecified number of its facilities.
- Telnet, a Dallas-based company with hundreds of locations, reported having a “temporary disruption to a subset of acute care operations” due to an unspecified cybersecurity incident in April 2022.
- Three New York hospitals suffered ransomware attacks, knocking out their medical systems for weeks starting in November 2022. One Brooklyn Health’s official notice about the incident affecting its three campuses states that the attack involved unauthorized access to OBH’s computer systems over several months, compromising patients’ personal and medical information.
Final Thoughts on the Effects of Cyber Attacks and Data Breaches
Over the past decade, we’ve seen an immense surge in the types and numbers of cyber attacks and data breaches that have occurred globally. To combat this, companies are investing more in their IT infrastructure, cybersecurity efforts, and employee cyber awareness training programs. But is it enough? While making such improvements is great, many companies’ efforts lag behind the increasing threat levels represented by cybercriminals and unmitigated vulnerabilities and exploits.
And this is especially bad when you consider that businesses are responsible for collecting and processing increasingly more sensitive data — and many do so without the proper processes and security mechanisms in place.
Let’s be frank: consumers are tired of receiving lip service. Companies always talk about the steps they’re taking steps to improve their cybersecurity. But these are the things we should expect the companies that handle our data to do as a minimum. After all, they’re typically required to meet industry cyber security standards and baseline requirements.
But on the consumer’s side of the coin, all we see are increasing increased attacks upon the businesses and organizations we do business with. We’re receiving more and more notices informing us that our personal data has been involved in data breaches. And what are we offered as consolation? Free credit monitoring or insultingly paltry financial settlements (that is, if we’re “lucky” enough to receive anything for our troubles).
The bottom line is that companies need to do more to protect consumer information and other sensitive data. And this responsibility involves everyone within your organization, regardless of their role.
