How You React to Data Breaches Affects Your Money

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Hackers violating the privacy of millions of consumers has become numbingly common. There are lots of good reasons to be afraid of these data breaches; there are just as many good reasons to get really, really angry. No one only reacts one way or the other, but our overall response to these massive hacks may have implications for everything from personal spending to the stock market.


Researchers at Binghamton University have just released a study charting the differences in how we feel fear and anger after a data breach. How did you react last fall when Facebook admitted that 50 million accounts had been compromised? If that freaked you out, you may have zeroed in on the size and scope of the breach, and the bigger, the more unnerving. If you got angry, however, you probably didn't care how big the hack was — the fact that it happened at all is infuriating enough.

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Both scenarios could affect your willingness to hand over money or personal information to a company that's experienced (or admitted to) a hack. But this response also carries a warning for Wall Street. News of a massive data breach can play havoc with stock prices. The Binghamton team found that buyers and sellers who both create and recoil from "negative shock" in the markets are overall responding fearfully.


The proper response from a company, then, is reassurance, and an explanation as to how it's moving to correct the issue and protect its data. And no matter whether investors are afraid or furious, it's also a good moment for a really transparent apology.