Raising consumer prices is a solution used to compensate losses from a cyberattack.
When a business or organization falls victim to a cyberattack, also their customers suffer its impact. Their private data may get into the wrong hands and customer prices of services and products can heavily increase, which is one of the most measurable impacts, according to Cybersecurity dive.
Higher consumer prices compensate loss
It is a common fact that cyberattacks can be very expensive, sometimes even to the extent that a business no longer can perform their operations and needs to close down. The list of costs a cyberattack can cause is long and involves ransomware payouts, lawyer fees to stay compliant with regulations, higher insurance prices, operational disruption, cost of getting back online, customer loss and many other related costs.
Even if these costs firstly affect the business in question, they will secondly affect the costumers, since raising consumer prices is a common solution used to compensate losses from an attack. A study shows that 60% of breached businesses increase the price of their products or services after falling victim to a cyberattack, according to Securitybrief.
With this background, customers are likely to see prices increasing even more in the future since the costs of attacks are increasing globally and the affected company’s are likely to increase customer prices to compensate for their losses. The average cost of a ransomware attack was $1.85 million in 2020, which is double the cost from the year before, according to Cybersecurity dive.
When customer data gets breached
Another major impact that directly affects consumers when a business falls victim to a cyberattack is that their private data might be breached. The consumers can thereby fall victim to identity theft and other kinds of fraud. It is also getting more and more common that malicious actors sell stolen private data on the dark web to other criminals. Those criminals can then turn an enterprise attack into hundreds of others.
Furthermore, cybercrime-as-a-service is an upcoming business model among cybercriminals where they sell methods and strategies to attack businesses to other criminals, which is making it possible for less sophisticated actors to also perform attacks. With these types of business comes an increased access to necessary tools, and a greater variation of fraud against customers can be performed. This can spin off into identity theft, credit card fraud and different types of social engineering scams. And it is important to remember that cyberattacks may strike once, but identity and personal data-related can remain a problem for longer time.
Destroyed relationship with consumers
Another direct effect involving the customers is the trustworthiness, which we already mentioned in an earlier blogpost. Many consumers loose trust in a company which falls victim to an attack, especially if the company possesses sensitive private data, something which triggers a lot of worry and in worst case, also significant loss and damage to the individual and the business alike, if the data is breached. In this situation the consumer may become more suspicious to continue online activities and to share personal information, which in the long term is bad for the economy of a society, reporting InfoSecurity.
In a study by MarkMonitor, 78 percent of consumers emphasize that cyberattacks are affecting their perceptions of the business in question and 74 percent said that businesses should have a fraud protection policy in place to protect consumers and that they expect the brand to educate them about dangers of online fraud.