A data breach is one of the worst things that can happen to a business or its customers. When thieves gain unauthorized access to financial information or other personal data, they can steal identities and rack up hundreds of thousands of dollars in fraudulent charges.
As a customer, your credit card issuer or bank may offer liability protection, so you won’t be held personally responsible for financial damages.
As a merchant, you probably won’t be so lucky. In fact, the fallout from a business data breach can be crippling, once you factor in:
- Diminished consumer confidence in your company.
- Having to cover some or all losses out of pocket.
- Litigation, legal expenses and punitive fees.
Yet how do data breaches even happen? What steps can you take to protect yourself? Is it possible to ever recover once a breach occurs?
How Data Breaches Happen in the First Place
Data breaches are quite easy, given how interconnected our world is today. Every computer, cellular device, networked system and unsecured Wi-Fi connection represents a potential point of entry for a would-be thief.
Unfortunately, most businesses are unaware of how vulnerable they really are; some companies do understand the landscape, but they’re too lazy to do anything about it.
Don’t make the same mistake.
Worldwide, data breaches are responsible for $400 billion in losses every year. The problem will only get worse — especially as we migrate more of our personal and financial lives online.
Best Practices for Preventing a Data Breach
There are some commonsense steps you can take to reduce the likelihood of a data breach, including:
- Using strong passwords for all of your devices.
- Changing those passwords often.
- Installing all the latest updates and patches for your devices.
- Using a trusted anti-virus software program.
However, we also recommend shoring up your payment environment — since financial data is what thieves are after most often.
Some of the more effective approaches include:
- Equipping your website with an SSL certificate.
- Using a PCI-compliant payment processor.
- Adopting tokenization, P2PE and fraud management tools.
As a bonus, many of these protections can also be used to safeguard nonfinancial data like email addresses, Social Security numbers and even patient records.
However, no preventative measures can ensure 100 percent protection. They can only make your business’s data harder to access.
Thus, what should you do if you become a data breach victim?
How to Recover From a Data Breach
Many companies try to cover up data breaches — or they delay sharing details in a timely manner.
This lack of transparency only makes the problem worse. All affected parties will learn about the data breach eventually. What’s more, by not warning them ASAP, you’re giving thieves more time to inflict pain.
The most important step involves alerting everyone as soon as possible, including customers, payment processors, banks, employees and even credit bureaus.
The next step involves changing all passwords and restricting employee access on a need-to-know basis. It may already be too late to stop the damage, but there’s no reason to leave potential vulnerabilities exposed.
Thereafter, you’ll want to bring in a security expert to measure the full extent of the damage. This process involves conducting detailed sweeps of all affected devices, systems and networks. True recovery can’t begin until any latent malware has been identified and removed — and finally, you can start rebuilding.
This is a slow process that involves educating employees and customers about what happened — and why. You also need a plan of attack to ensure that no such data breaches ever happen again in the future.
In addition, you should be prepared to cover any damages out of pocket. Also, don’t be afraid to work closely with your customers as they try to recover their own stolen identities.
The recovery process isn’t a pleasant experience, which is why we recommend investing the requisite time and effort to ensure that data breaches don’t happen in the first place.
If you’re interested in learning more about using effective security methods to reduce your risk of a data breach, contact our merchant services team today.