Companies that fail to keep personal data safe risk long-lasting reputational damage that can impact on the future success of the business, according to the Information Commissioner.
Christopher Grahams comments are backed up by a YouGov poll which shows that nearly eight out of ten people would think twice about giving their custom to an online company that had made headlines for failing to stop a data security breach.
Speaking at the Advertising Associations leadership summit tomorrow (Thursday 28 January) Mr Graham will say that ICO fines of up to £500,000 for breaching the Data Protection Act are a powerful deterrent, but the negative impact created by media coverage of a penalty can have a greater impact than the fine itself.
Mr Graham will say:
Companies that play fast and loose with peoples personal information risk the wrath of the ICO and that means fines of up to £500,000.
A heavy fine is bad enough, but the time, energy and money it takes to rebuild customer confidence can be as severe a punishment as the fine itself.
The YouGov poll was commissioned by the ICO to mark European Data Protection Day. It showed 20 per cent of people would definitely stop using a companys services after hearing news of a data breach, while 57 per cent would consider stopping. Only eight per cent said the coverage would make no difference and 14 per cent said they didnt know.
Mr Graham said:
The knock on effect of a data breach can be devastating for a company. Getting hit with a fine is one thing, but when customers start taking their business and their money elsewhere, that can be a real body blow.
Keeping personal data secure is just part of the picture. Some 95 per cent of people polled by YouGov said it was very or fairly important that companies were clear from the outset about how their personal information would be used. And 94 per cent deemed it very or fairly important that their information was not shared with other companies.
Mr Graham said:
It is clear that people care about what happens to their personal information. Getting it right is not only an obligation under law, but it should be central to an organisations reputation management.
Used in accordance with Open Government Licence v3.0