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Working Paper
Prior Fraud Exposure and Precautionary Credit Market Behavior
We study how past experiences with privacy shocks affect individuals’ likelihood to take precautionary behavior when faced with a new privacy shock in the context of credit markets. We focus on experiences with identity theft and data breaches, two kinds of privacy shocks that either directly lead to fraud or put an individual at an elevated risk of experiencing fraud. We show that immediately after the announcement of the 2017 Equifax data breach, individuals with either kind of prior fraud exposure were more likely to freeze their credit report and close credit card accounts than ...
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Did the Target data breach change consumer assessments of payment card security?
Previous research has found that perceptions of payment security affect consumers? use of payment instruments. We test whether the Target data breach in 2013 was associated with a change in consumers? perceptions of the security of credit cards and debit cards and with subsequent changes in consumers? use of payment cards. Using data from the Survey of Consumer Payment Choice (SCPC), we find that, controlling for possible confounding effects of demographic differences between the two groups, ratings by consumers who assessed the security of personal information of debit cards shortly after ...
Working Paper
How Data Breaches Affect Consumer Credit
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 ...