The Soft Costs of Identity Breaches

BeyondTrust, March 8th, 2011

I’ve been a loyal customer of Wells Fargo for over a decade. For lots of good reasons. Over the long President’s Day weekend was the first time I’ve received a call from them saying that one of the vendors I’ve paid recently has had a data breach and leaked my credit card information.

They didn’t tell me which vendor it was, but it was pretty easy to figure it out based on the fact that they verified every recent purchase up to the one I figured it was.

It got me thinking about the “soft” costs of data breaches. Whether the breach was an insider or hacker, it must have costs a good chunk of cash to call thousands of customers and re-issue a card to each one.

Meanwhile, the event capped off a series of events I experienced personally that verified that this particular vendor that leaked my credit card information just didn’t have their act together. This is my first time in recent memory actually being a victim of a data breach and I realized that I immediately associate a data leak with blatant incompetence.

Then, I wonder how/if Wells Fargo punished the vendor. For some companies, relationships – even more so than data – is the most valuable asset they have and data breaches can put a lot of different relationships at risk.