BestMark News

Banks, retailers don't necessarily lose loyalty after security breach

Retailers and banks may not necessarily lose loyalty if customers fall victim to identity theft or credit card fraud, according to a study by Cardbeat and published by Auriemma Consulting Group.

Roughly 90 percent report customer satisfaction and loyalty with credit card companies following fraudulent activity, while 73 percent said they were still happy with merchants after an incident, according to the study.

This demographic represents a significant portion of the population. Only 37 percent of cardholders have never experienced fraudulent activity with their accounts, meaning that nearly two-thirds of U.S. consumers have been compromised by data breaches.

The residual satisfaction could be the result of companies' efforts to protect customers and recover losses if fraud does occur. Often, a retailer or financial institution was the first to alert customers of fraudulent activity. Of those surveyed, 67 percent said the companies brought the breach to their attention.

Those who experienced credit card fraud ended up being highly satisfied with the way the fraud was handled, which indicates that if a company responds to suspicious activity quickly and effectively handles the breach, customers are more likely to forgive the incident and remain loyal.