A1BTC Consumers Having Their Data Breeched by Third Parties & Credit Bureaus Essay

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Business Finance

A1 Business and Technical College

Description

Scenario

You have been assigned to develop a comprehensive research strategy and plan and develop a proposal outline for a customer-driven project. After you complete your review of the project, you will have to pick a topic and decide the research methodology that will be applied. Then you will have to develop the research design to include the topic, purpose statement, literature review, research question and hypothesis, and the analysis and report writing format. Finally, you will have to present the research proposal outline for customer/management approval. For this project, you will not have to do actual data collection. This project requires the completion of this assignment using secondary data.

Topic: Consumers having their data breeched by third parties and credit bureaus

Part 1

Deliverable Length: New content: 1,000–2,000 words

Introduction to topic

The following items are separate sections under the Introduction:

  • Identify the problem, the context, and the audience.
  • Prepare a statement of the issue to be resolved.
  • Identify how the organization will be impacted if the issue is not resolved.
  • Identify the consequences if the problem is not resolved.

Part 2

Deliverable Length: 1,000 to 2,000 words

  • Literature review
    • Compare and contrast the eight sources collected in Unit 1 and add a minimum of five current articles from the Web on the topic, and develop a review of the literature with discussions and findings.
    • Identify and explain how the information discussed relates to the problem identified.

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Explanation & Answer

Attached. Please let me know if you have any questions or need revisions.

1

Running Head: DATA BREACHES

Data Breaches

Institutional Affiliation

Name

Date

2

DATA BREACHES

Data Breaches

A data breach happens when a cybercriminal or hacker accesses a data source and obtains
sensitive information. A data breach can occur physically by accessing the Company's network
to steal information and local files. It is essential to note that most companies are usually targeted
this way. Data breaches can also occur across networks: this is the most sophisticated type of
attack; the hacker does not need to physically access the Computers of the Company but can
access their systems by breaching their passwords and firewalls (Acquisti, 2006). Data breaches
via third parties are increasingly becoming a problem- this issue has impacted organizations
across various industries and has led to the massive loss of information. With the advancements
in technology, it is becoming significantly challenging to defend against these breaches and
attacks.

Organizations store large amounts of information for their customers. This ranges from
their password information to bank account and credit card details. Data breaches often lead to
the loss of valuable and confidential information. This results in a chain of events such as theft of
personal identity and even information phishing. Organizations have had to make ridiculous
amounts in settlements to compensate their customers for these data breaches. This impacts them
financially to the point of bankruptcy and the closing down of the business. Confidential
information often has immense value: it can be sold on the dark web or even used to access
people and their families. In essence, a data breach has significant negative consequences.

The protection of user data has become important and vital for most organizations. The
government has also implemented stricter measures to protect both organizations and consumers.

DATA BREACHES

3

Companies are required to announce system breaches and pay fines to the consumers to
indemnify and compensate them for the risk that occurred. Organizations such as Macy's and
Reddit have joined the growing list of breach victims. These organizations have experienced
losses accumulating to over 1 billion as a result of these breaches. This has sensitized other
organizations who have begun implementing stricter measures to protect their systems and the
consumers (Zou et al, 2019). It is vital to note that a data breach occurs in various ways. For
instance, the cybercriminal can conduct research and identify weaknesses in their systems.
Secondly, they attack based on the information obtained: they can either steal the information or
impair the organization's system, thereby crippling them in terms of their services.

Statement of the issue to be resolved

The organization is experiencing problems when it comes to limiting access to their networks
and encryption.

Impacts of data breaches

Cyber-attacks can be frightening and invasive. One data breach can cost the organization
approximately 3.92 million dollars. A data breach can affect the organization in various ways.
First, a data breach impacts the organization financially. As mentioned above, a single attack can
result in the loss of millions of dollars. This is made worse by the fact that different countries
have different laws and regulations regarding data breaches (Roberds, 2009). For instance, the
cost of a data breach in the United States is higher than in other countries. Companies in the
United States are required to pay approximately 8.19 million dollars. These costs are significant

DATA BREACHES

4

for any Company and can ruin a small and mid-sized company. Secondly, the organization is
affected in terms of its reputation. Consumers trust the organization in keeping their data safe. In
case of a breach, customers lose trust in the ability of the organization to store their information
safely (Cheng et al, 2017). This loss of trust affects the ability of the organization to attract new
customers and maintain the ones they have. It is essential to note that the media has made this
issue worse by highlighting its effects on consumers. As a result, consumers are wary of trusting
organizations that have experienced a breach in their data or have any potential security issues.

Organizations are also affected in terms of productivity. There are various types of data
and security breaches. For instance, a hacker might encrypt the organization's files using a
decryption key that is unknown. They can use this as an advantage point and demand money or
compensation from the organization. Others go to the extent of demanding the business to close
down or halt their service delivery processes. This influences the organization negatively as it
affects their productivity. The denial of service attack influences the organization across all
sectors, including their customers and finances. If the Company cannot access their data or
network, they cannot provide the necessary services to their customers hence influencing their
reputation and productivity in general.

Lastly, if the organization does not protect against this, they are affected in terms of their
legal liability. Once a company takes responsibility for their customer's data, they are required to
provide the necessary security; if not, they are held liable and subjected to data and privacy laws.
As noted earlier, different countries have different laws pertaining to the legal liability ad
responsibility of Companies (Culnal, 2009). For instance, countries under the European Union
are required to comply with the established General Data Protection Regulation. This law holds

DATA BREACHES

5

Companies liable for issues such as breaches; if their data is breached, they are required to pay
up to 20 million dollars or 4% of their total global revenue. This is enough to put a Company out
of business.

Consequences of a data breach if the problem is no resolved

The consequences of data breaches can be more or less compared to the impacts of data
breaches on organizations. However, it is essential to note that consumers are also affected by
these breaches. Consumers suffer a great deal when their confidential information falls into the
wrong hands. Even if the Company compensates them, they have to go through the challenge of
re-organizing their personal information again. They also look for new organizations that can
provide the required security and confidentiality. In essence, the consequences of this issue, if
not resolved, affects both the organization and the consumers across various aspects. In
conclusion, Organizations should put in place measures to ensure the protection of consumer
information and limit access to their networks.

6

DATA BREACHES

References
Acquisti, A., Friedman, A., & Telang, R. (2006). Is there a cost to privacy breaches? An event
study. ICIS 2006 Proceedings, 94.
https://aisel.aisnet.org/icis2006/94/
Culnan, M. J., & Williams, C. C. (2009). How ethics can enhance organizational privacy: lessons
from the choicepoint and TJX data breaches. Mis Quarterly, 673-687.
https://www.jstor.org/stable/20650322?seq=1
Cheng, L., Liu, F., & Yao, D. (2017). Enterprise data breach: causes, challenges, prevention, and
future directions. Wiley Interdisciplinary Reviews: Data Mining and Knowledge
Discovery, 7(5), e1211.
https://onlinelibrary.wiley.com/doi/full/10.1002/widm.1211
Roberds, W., & Schreft, S. L. (2009). Data breaches and identity theft. Journal of Monetary
Economics, 56(7), 918-929.
https://www.sciencedirect.com/science/article/abs/pii/S0304393209001214
Zou, Y., & Schaub, F. (2018, April). Concern But No Action: Consumers' Reactions to the
Equifax Data Breach. In Extended abstracts of the 2018 CHI conference on human
factors in computing systems (pp. 1-6).
https://dl.acm.org/doi/abs/10.1145/3170427.3188510


Outline
Data Breaches

Format – Essay
Introduction
Overview
Part 1:


A data breach happens when a cybercriminal or hacker accesses a data source and
obtains sensitive information. A data breach can occur physically by accessing the
Company's network to steal information and local files



Data breaches via third parties are increasingly becoming a problem- this issue has
impacted organizations across various industries and has led to the massive loss of
information. With the advancements in technology, it is becoming significantly
challenging to defend against these breaches and attacks.



Organizations have had to make ridiculous amounts in settlements to compensate
their customers for these data breaches. This impacts them financially to the point
of bankruptcy and the closing down of the business



Organizations such as Macy's and Reddit have joined the growing list of breach
victims. These organizations have experienced losses accumulating to over 1
billion as a result of these breaches



Statement of the issue to be resolved



The organization is experiencing problems when it comes to limiting access to their
networks and encryption.

Part 2:


For instance, the cost of a data breach in the United States is higher than in other
countries. Companies in the United States are required to pay approximately 8.19
million dollars.



This loss of trust affects the ability of the organization to attract new customers
and maintain the ones they have. It is essential to note that the media has made
this issue worse by highlighting its effects on consumers



If the Company cannot access their data or network, they cannot provide the
necessary services to their customers hence influencing their reputation and
productivity in general.



For instance, countries under the European Union are required to comply with the
established General Data Protection Regulation. This law holds Companies liable
for issues such as breaches; if their data is breached, they are required to pay up to
20 million dollars or 4% of their total global revenue. This is enough to put a
Company out of business.

Reflection

Overview
Conclusion

References
Acquisti, A., Friedman, A., & Telang, R. (2006). Is there a cost to privacy breaches? An event
study. ICIS 2006 Proceedings, 94.
https://aisel.aisnet.org/icis2006/94/
Culnan, M. J., & Williams, C. C. (2009). How ethics can enhance organizational privacy: lessons
from the choicepoint and TJX data breaches. Mis Quarterly, 673-687.
https://www.jstor.org/stable/20650322?seq=1
Cheng, L., Liu, F., & Yao, D. (2017). Enterprise data breach: causes, challenges, prevention, and
future directions. Wiley Interdisciplinary Reviews: Data Mining and Knowledge
Discovery, 7(5), e1211.
https://onlinelibrary.wiley.com/doi/full/10.1002/widm.1211

Roberds, W., & Schreft, S. L. (2009). Data breaches and identity theft. Journal of Monetary
Economics, 56(7), 918-929.
https://www.sciencedirect.com/science/article/abs/pii/S0304393209001214
Zou, Y., & Schaub, F. (2018, April). Concern But No Action: Consumers' Reactions to the
Equifax Data Breach. In Extended abstracts of the 2018 CHI conference on human
factors in computing systems (pp. 1-6).
https://dl.acm.org/doi/abs/10.1145/3170427.3188510

Attached. Please let me know if you have any questions or need revisions.

1

Running Head: DATA BREACHES

Data Breaches

Institutional Affiliation

Name

Date

2

DATA BREACHES

Data Breaches

From the analysis, there is a limited amount of research conducted on data breaches and
the management of this crisis in case it occurs. Recent research articles show that most research
articles are publications associated with the technological and legal aspects of data breaches.
Only a small amount indicate interest in data breach research and how the advancements in
technology can be levelled in such a way that it influences positive effects. Previous literature
and research on data breaches can be categorized into two (Culnan, 2009). The first category
focuses on key issues and terminologies related to data breaches and their impacts. This category
seeks to explain and analyse the terminologies related to data breaches and their effects when it
comes to consumers and organizations in general. It also seeks to identify ways in which the
impact of data breaches can be reduced.
The ITR identifies data breach as an incident where a person's name, including their
confidential information such as driver's silence and medical records, are illegally access...


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