How Data Breaches Affect Consumer Credit

Vyacheslav Mikhed and Michael Vogan

No 17-6, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We use the 2012 South Carolina Department of Revenue data breach as a natural experiment to study how data breaches and news coverage about them affect consumers? interactions with the credit market and their use of credit. We find that some consumers directly exposed to the breach protected themselves against potential losses from future fraudulent use of stolen information by monitoring their files and freezing access to their credit reports. However, these consumers continued their regular use of existing credit cards and did not switch lenders. The response of consumers exposed to the news about the breach only was negligible.

Keywords: identity theft; fraud alert; data breach; consumer protection; credit reports (search for similar items in EconPapers)
JEL-codes: C23 D12 G02 G22 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2017-03-23
New Economics Papers: this item is included in nep-ict, nep-mkt and nep-pay
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