Data breaches of customer information are one of the worst nightmare scenarios for 21st century businesses that use modern, digital storage techniques. When it happens to a larger company, it can be a huge blow to consumer confidence, and certainly cost a bigger business, with a big reputation, a lot in both profit and in public relations.
Companies, as varied as Sony and Target, have been hit in the past with attacks from unscrupulous hackers that have “raided” their databases for sensitive customer information, including credit card numbers. This then allows the hackers to either use the credit card numbers themselves to make illegal purchases or sell that information on the black market for similar forms of identity theft exploitation.
When this sort of data breach happens to larger, multinational corporations, it is a serious crisis, but often something that wounds a business, and forces them into a recovery period. This is because legally, once a company has been found to have such sensitive consumer information stolen, it is the company, not the bank that issued the credit cards, that will be held legally and fiscally responsible for unauthorized transactions that may now take place with the stolen credit card information.
Unfortunately, when it comes to a small business, a data breach on this scale, if the business itself is held responsible, may be fatal. The banks may, as with a big company, hold the small business fiscally responsible for the fraudulent payments. So even though the business itself may have conducted a legitimate transaction with a real customer, the future, illegal transactions that occur with that credit card may have to be reimbursed by the small business to the bank that issued the credit card. It may even affect a business’s ability to get future payment processing services with other companies, so be careful! Ensure your financial and customer data is protected!
Posted in Credit Cards on Aug 16, 2018