Too many people respond with a shrug and maybe change their password. That’s asking for trouble.
3 min
How do consumers respond when their online accounts are exposed to hackers? Many of them simply don’t.
Data breaches at major firms have become all too common, with more than 110 million user accounts exposed in just the second quarter of 2023. Yet our research found that nearly two-thirds of U.S. consumers would return to a site after they were notified of a breach—with only the bare minimum of precautions, like changing their passwords.
Almost a quarter of the roughly 200 people we surveyed said they would return to the compromised website with no changes to their behavior at all. Only 10% said they wouldn’t go back.
Even people who had cybersecurity training within the past 90 days—in other words, people who should be primed to protect themselves—took risks. In this subsequent study, over a quarter of roughly 500 people said they would return to the breached website while taking the absolute minimum security measures, and only about 9% would take more-complicated steps such as setting up two-factor authentication. And they would do that only if they experienced real financial consequences, like fraudulent charges on their credit cards.
Why wouldn’t people protect themselves? Many of the consumers we surveyed believed that there were few—if any—alternatives to the websites they used frequently, and all websites seemed to be affected by data breaches. Why bother beefing up security? Likewise, some people said they would stick with a compromised site because they had put so much time and effort into their presence on it—a classic sunk-cost fallacy.
Since doing nothing may put your finances and personal information at risk, what should you do in case of a breach? Based on my experience as a researcher in this domain and guided by input from customers recovering from data breaches, I recommend the following actions.
Take each data-breach notification seriously. Immediately change passwords on the affected sites and sign up to follow the updates from the breached firm. This is also a good time to ensure your passwords are unique and not being used across several sites.
Find out what kind of breach it is. Some breaches violate your privacy—such as stealing your playlist or viewing preferences—but may not be as damaging as other hacks. So they may just require a simple password change on the affected site. Even the breach of encrypted password data, such as in the LastPass data breach, while serious, isn’t an immediate threat.
On the other hand, things like compromised credit-card numbers, financial data and personally identifiable information need stronger attention. Even seemingly innocuous breaches of social-media networks may reveal data that can be used to impersonate you and perhaps be used to invade the privacy of those around you. For instance, hackers might be able to figure out your “forgot password” questions on websites by learning where you grew up, the names of your pets and more.
Set up push notifications for financial data. When you’re notified of data breaches that involve credit cards or payment information, review the transactions on the affected accounts, going back to the previous payment period. Whether or not there has been unusual activity, protect yourself by adding mobile push notifications for credit-card transactions—an option offered by most credit cards, online-payment mechanisms and banks. Most notifications happen in real time, so consumers affected by data breaches can quickly identify and contest improper charges.
Use free credit monitoring. Some credit cards and banking firms such as Discover and Chase provide free monitoring of consumer credit and provide monthly updates of noteworthy events and changes. Some go further and provide benefits such as removal of your personally identifiable information found on public sites, including data brokers. Using these services is an easy way to identify and report fraudulent activity, as well as protect against identity theft—so review this data regularly if your information has been exposed.
Enable dual-factor authentication on all of your accounts. This is a good practice in general but is especially important for anyone affected by data breaches. With dual-factor authentication, you enter your password as usual but then confirm your identity using a personal device, typically a mobile phone. This limits someone from logging into the account with a stolen password.
Along with enabling dual-factor authentication, there are a number of steps you should take in the event of a social-media breach.
First, change the password and log in with the new one. Check the login-activity page to see if anyone other than you has logged in, and then look for the option to delete all other active sessions—so every other device that is currently logged in is effectively logged out.
Also review all direct messages, posts, and comment activity on the account, and report anything suspicious. If it affects other people, let them know. Finally, pause or temporarily deactivate the account, if that is an option, to make it even tougher for hackers to get access.
Rajendran Murthy is the J. Warren McClure Research Professor of Marketing at the Rochester Institute of Technology’s Saunders College of Business.
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What a quarter-million dollars gets you in the western capital.
Alexandre de Betak and his wife are focusing on their most personal project yet.
Multinationals like Starbucks and Marriott are taking a hard look at their Chinese operations—and tempering their outlooks.
4 min
For years, global companies showcased their Chinese operations as a source of robust growth. A burgeoning middle class, a stream of people moving to cities, and the creation of new services to cater to them—along with the promise of the further opening of the world’s second-largest economy—drew companies eager to tap into the action.
Then Covid hit, isolating China from much of the world. Chinese leader Xi Jinping tightened control of the economy, and U.S.-China relations hit a nadir. After decades of rapid growth, China’s economy is stuck in a rut, with increasing concerns about what will drive the next phase of its growth.
Though Chinese officials have acknowledged the sputtering economy, they have been reluctant to take more than incremental steps to reverse the trend. Making matters worse, government crackdowns on internet companies and measures to burst the country’s property bubble left households and businesses scarred.
Now, multinational companies are taking a hard look at their Chinese operations and tempering their outlooks. Marriott International narrowed its global revenue per available room growth rate to 3% to 4%, citing continued weakness in China and expectations that demand could weaken further in the third quarter. Paris-based Kering , home to brands Gucci and Saint Laurent, posted a 22% decline in sales in the Asia-Pacific region, excluding Japan, in the first half amid weaker demand in Greater China, which includes Hong Kong and Macau.
Pricing pressure and deflation were common themes in quarterly results. Starbucks , which helped build a coffee culture in China over the past 25 years, described it as one of its most notable international challenges as it posted a 14% decline in sales from that business. As Chinese consumers reconsidered whether to spend money on Starbucks lattes, competitors such as Luckin Coffee increased pressure on the Seattle company. Starbucks executives said in their quarterly earnings call that “unprecedented store expansion” by rivals and a price war hurt profits and caused “significant disruptions” to the operating environment.
Executive anxiety extends beyond consumer companies. Elevator maker Otis Worldwide saw new-equipment orders in China fall by double digits in the second quarter, forcing it to cut its outlook for growth out of Asia. CEO Judy Marks told analysts on a quarterly earnings call that prices in China were down roughly 10% year over year, and she doesn’t see the pricing pressure abating. The company is turning to productivity improvements and cost cutting to blunt the hit.
Add in the uncertainty created by deteriorating U.S.-China relations, and many investors are steering clear. The iShares MSCI China exchange-traded fund has lost half its value since March 2021. Recovery attempts have been short-lived. undefined undefined And now some of those concerns are creeping into the U.S. market. “A decade ago China exposure [for a global company] was a way to add revenue growth to our portfolio,” says Margaret Vitrano, co-manager of large-cap growth strategies at ClearBridge Investments in New York. Today, she notes, “we now want to manage the risk of the China exposure.”
Vitrano expects improvement in 2025, but cautions it will be slow. Uncertainty over who will win the U.S. presidential election and the prospect of higher tariffs pose additional risks for global companies.
For now, China is inching along at roughly 5% economic growth—down from a peak of 14% in 2007 and an average of about 8% in the 10 years before the pandemic. Chinese consumers hit by job losses and continued declines in property values are rethinking spending habits. Businesses worried about policy uncertainty are reluctant to invest and hire.
The trouble goes beyond frugal consumers. Xi is changing the economy’s growth model, relying less on the infrastructure and real estate market that fueled earlier growth. That means investing aggressively in manufacturing and exports as China looks to become more self-reliant and guard against geopolitical tensions.
The shift is hurting western multinationals, with deflationary forces amid burgeoning production capacity. “We have seen the investment community mark down expectations for these companies because they will have to change tack with lower-cost products and services,” says Joseph Quinlan, head of market strategy for the chief investment office at Merrill and Bank of America Private Bank.
Another challenge for multinationals outside of China is stiffened competition as Chinese companies innovate and expand—often with the backing of the government. Local rivals are upping the ante across sectors by building on their knowledge of local consumer preferences and the ability to produce higher-quality products.
Some global multinationals are having a hard time keeping up with homegrown innovation. Auto makers including General Motors have seen sales tumble and struggled to turn profitable as Chinese car shoppers increasingly opt for electric vehicles from BYD or NIO that are similar in price to internal-combustion-engine cars from foreign auto makers.
“China’s electric-vehicle makers have by leaps and bounds surpassed the capabilities of foreign brands who have a tie to the profit pool of internal combustible engines that they don’t want to disrupt,” says Christine Phillpotts, a fund manager for Ariel Investments’ emerging markets strategies.
Chinese companies are often faster than global rivals to market with new products or tweaks. “The cycle can be half of what it is for a global multinational with subsidiaries that need to check with headquarters, do an analysis, and then refresh,” Phillpotts says.
For many companies and investors, next year remains a question mark. Ashland CEO Guillermo Novo said in an August call with analysts that the chemical company was seeing a “big change” in China, with activity slowing and competition on pricing becoming more aggressive. The company, he said, was still trying to grasp the repercussions as it has created uncertainty in its 2025 outlook.
Few companies are giving up. Executives at big global consumer and retail companies show no signs of reducing investment, with most still describing China as a long-term growth market, says Dana Telsey, CEO of Telsey Advisory Group.
Starbucks executives described the long-term opportunity as “significant,” with higher growth and margin opportunities in the future as China’s population continues to move from rural to suburban areas. But they also noted that their approach is evolving and they are in the early stages of exploring strategic partnerships.
Walmart sold its stake in August in Chinese e-commerce giant JD.com for $3.6 billion after an eight-year noncompete agreement expired. Analysts expect it to pump the money into its own Sam’s Club and Walmart China operation, which have benefited from the trend toward trading down in China.
“The story isn’t over for the global companies,” Phillpotts says. “It just means the effort and investment will be greater to compete.”
Corrections & Amplifications
Joseph Quinlan is head of market strategy for the chief investment office at Merrill and Bank of America Private Bank. An earlier version of this article incorrectly used his old title.
