Home Depot: Losing Consumer Trust?
The effects of personal information privacy breaches go beyond the people they directly impact. As countless examples have demonstrated, corporate entities that let sensitive data fall into the wrong hands suffer from negative public perception and losses of confidence that can hinder their profitability for months or years. Although larger, well-established companies often survive the aftermath of such incidents, they too suffer in the interim, and even retail giants like Home Depot aren't immune to mistakes.
How Home Depot Lost Vital Customer Information
Do-it-yourself home improvement chain Home Depot served as a prime example of how breaches can jeopardize corporate health. In fall of 2014, the company made the news for reasons it wasn't proud to admit after hackers stole data from more than 2,000 of its stores.
A September statement released by Home Depot said that the data stolen by hackers may have included payment information. Customers who had shopped at retail locations or used the company's Internet storefront were initially believed to be at risk of having their debit or credit card information revealed.
This breach was made even more serious by the fact that the hackers sold the stolen data online! Naturally, people were justifiably upset, and Home Depot immediately joined the ranks of other disgraced firms, like Target, UPS and Anthem.
Beyond Hope of Damage Control?
In a November press release, the company revealed the result of its multi-week, internal inquiry that involved various law enforcement agencies and online security consultants. According to this document, the millions of Americans who had their data stolen didn't have that much to worry about; the retailer claimed that the majority of the thefts involved email addresses instead of private payment info.
Nonetheless, the new announcement did little to soothe people's fears or reestablish their trust. The fact that Home Depot didn't release its first public statement until after a security researcher and multiple banks publicized the mistakes didn't help, and neither did the fact that the malware used in the hack targeted Home Depot via third-party vendors. While the company eventually implemented improved security systems and began providing free identity protection services to anyone who might have been affected, the incident represents a stain on its record that's unlikely to be forgotten.
Lessons to Be Learned
Home Depot's multibillion-dollar profit margins may have come out of this breach relatively unscathed, but it's easy to see how the stakes would be far higher for a smaller firm. In addition to losing consumer confidence, companies could easily find themselves held liable for financial penalties, and not every business could afford to fund a huge investigation. For a startup, such a situation might very well mark the end of the road.
Although major companies usually have excuses for why they're not at fault, blaming third-party software or security tools isn't always an option, and even when it's viable, it doesn't make businesses look good. The phishing attacks that result in personal information privacy breaches like the Home Depot incident don't just come out of nowhere; they're made possible by mistakes and oversights in other areas. Proactive personal information security is vital for organizations that want to thrive, and it starts with maintaining good online security practices across the board.