Bad-news data letters push consumers to stray (Leaked Personal Info)

http://www.msnbc.msn.com/id/9581522/

Millions of consumers say they've dumped companies that leaked their confidential information last year, according to estimates based on a new survey. The results come after a brutal year for privacy, with dozens of companies admitting they’ve exposed 60 million consumers’ private information.

In a nationwide tally conducted by The Ponemon Institute, about 1 in 9 Americans indicated they've received notice from a firm revealing their personal information has been lost in the last 12 months — an estimated 23 million adults. About 40 percent of them almost missed the notice, believing the letter was either junk mail or a telemarketing call, according to the survey. But the most significant finding in the study, according to author Larry Ponemon, is the customer "churn" that resulted from the disclosures. About 1 in 5 of those surveyed said they had "discontinued" their relationship with the company involved. Another 40 percent said they were thinking about doing the same thing. The study had a margin of error of plus or minus 3 percent.

"If millions of adults shifted their company loyalty after a disclosure letter, that's an eye opener," said Rob Douglas, a banking consultant who operates PrivacyToday.com.

While consumers don't always follow through on such claims to dump their companies out of frustration, even the threat should be enough to get the attention corporate executives, who spend millions in marketing dollars to acquire new customers.

"Even if it's just 1 or 2 percent churn, it could be devastating to a company," Ponemon said.