When shoppers have their payment information stolen, they are most likely to blame retailers, not banks.
A national survey conducted by Feedzai, a big data science company specializing in fraud, found that 60 percent of those who knew about any breaches, such as those at Target (NYSE: TGT) and Sally Beauty, hold the merchant responsible for preventing data hacks. Only 13 percent believe responsibility falls on banks.
The "2014 Consumer Reaction to Financial Data Breaches Study" showed that a mere 5 percent of respondents believe fraud is the consumer's responsibility.
When understanding how consumers respond following news of a data breach, the survey found that 22 percent of those who are aware of any data theft have changed their shopping behavior and 40 percent have started using cash for more purchases.
It's also no surprise that the study found that data breaches lead to a drop in traffic for retailers that have their systems compromised. Twenty-eight percent of shoppers have stopped visiting a retailer altogether after learning of a data breach.
Since Target's data breach came to light in December, the banks and stores have been playing the blame game. Banks want retailers to be held to the same data-protection standards as bankers, while retailers have been blaming banks for dropping the ball on tougher security measures.
Due to the pressure coming from the banking industry, Target agreed to adopt chip and PIN technology by early 2015. PIN-based cards are equipped with both an embedded chip and a traditional magnetic stripe. Cardholders must enter their PIN or sign for each transaction to be approved. If the card is stolen, the embedded microchip makes the card extremely difficult to counterfeit or copy.
In the aftermath of the Target attack, U.S. banks have spent more than $153 million cleaning up the mess it has created according to data from the Consumer Bankers Association. Over 15.3 million bank cards have been replaced and banks have had to pay for extended branch hours and additional customer service staff in the breach's wake. Many banks have also had to reimburse customers who lost money when their stolen card numbers were used for unauthorized purchases.
-See this Feedzai study
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