Wonga Data Breach Puts Customer Loyalty at Risk - eMarketer

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Wonga Data Breach Puts Customer Loyalty at Risk

Small share of consumers likely to take some action

April 11, 2017

UK payday lender Wonga is warning its customers to take precautions after revealing that personal information from about 245,000 accounts in the UK has been accessed in a data breach. As is usual in cases of data theft, the question for many observers is what actions will consumers take in response.

An autumn 2016 Thales Group survey probing consumer attitudes about data breaches found relatively few respondents in the UK—just 20%—said they would stop using a company entirely even after multiple data breaches.

Primary Action Taken by Internet Users in Germany vs. the UK if a Company* Experienced Multiple Data Breaches, Sep-Oct 2016 (% of respondents)

However, the survey also found just 16% would continue to use the affected company’s products and services as usual. More than a quarter of respondents would limit their usage to some degree.

More potentially troubling for Wonga is that the largest share of respondents (37%) would only use a hacked company’s products or services “if I had no alternatives.” Precise recent figures are scarce, but the UK’s payday loans sector is crowded—approximately 200 companies were active in the space as of early 2014, according to the UK’s Financial Conduct Authority—so finding alternatives to Wonga wouldn’t be all that hard, nor particularly painful considering the relationship between provider and customer tends to be short-lived.

Thanks to abundant competition, Wonga’s could be the case where consumers follow through more aggressively on threats to take their business elsewhere after a data breach.

—Cliff Annicelli

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