top of page
  • Writer's pictureSophia Satapathy

Major E-commerce Data Breaches and Associated Risks: Learn and Stay Informed


Data breach thumbnail

Your personal data—at risk while shopping online? These days, direct-to-consumer (D2C) shopping offers unparalleled convenience—with just a few clicks, products are delivered right to your door. But have you ever wondered what happens to all that personal information you hand over during online purchases and account registrations? 

Many companies collect far more than just payment details. Your name, address, email, phone number, and browsing habits all get scooped up into databases. While sharing data is necessary for orders, only some things must follow you around forever. Did you know that data breaches are increasingly common, jeopardizing your privacy through no fault of your own? 

In this article, we’ll explore the privacy threats lurking in the shadows of D2C shopping and give you tools to minimize risks associated with E-commerce data breaches, so you can enjoy online ordering without constant security worries.

Key Risk #1: Data Breaches 

One of the biggest privacy threats when sharing your personal information online is the risk of a data breach. A data breach occurs when a hacker or other unauthorized party gains access to a company’s customer databases. They can steal names, addresses, phone numbers, payment details, and any other information stored by the retailer. Unfortunately, data breaches have become very common in recent years. In 2021 alone, over 1,800 breaches were reported, according to the Identity Theft Resource Center.

Some of the largest retail breaches have exposed millions of customer records. For example, in 2013, attackers could infiltrate Target’s systems and steal financial info and contact details for over 40 million holiday shoppers. This breach had serious consequences, as fraudsters went on to make fraudulent purchases and open credit cards in their victims’ names. As a result, Target had to pay over $18 million in a class-action settlement. Shoppers affected spent countless hours freezing accounts, disputing charges, and monitoring their credit reports for identity theft.

If a breach occurs where you’ve made purchases, it’s important to protect yourself. You may consider signing up for credit monitoring services that alert you to applications for new lines of credit in your name. Some companies offer identity theft protection that can help resolve issues if your information is misused. It’s also wise to periodically review credit reports and financial statements for suspicious activity. While you can’t control a hack, being proactive helps mitigate damage if your data is exposed through no fault in a breach.

Key Risk #2: Profiling and Targeted Ads 

In addition to payment details, many retailers extensively track your browsing habits, locations visited, and items viewed or purchased both online and offline. This wealth of data provides insight into customers’ interests, budgets, and lifestyles. However, it also gets shared with third parties you may not have even heard of before. Data brokers assemble all this collected information into detailed digital dossiers about consumers, which they then sell to advertisers.

Through profile analysis, advertisers can deduce deeper insights into people’s behaviors and predict future purchasing patterns. The concern is that personal data is used to show relevant ads and potentially determine eligibility for loans, insurance, or jobs. With profiling, a few searches can put you in a “box” that follows you around the Internet and influences other decisions that impact your life.

While targeted ads have the benefits of showing products people want, the lack of transparency and the inability to opt out of profiling creates an erosion of privacy. Advertisers know intimate details about our lives that we may not even know about ourselves based on what ads we click on. The best approach is to limit the amount of personal information shared online as much as possible. You can also install browser extensions to block trackers and limit ads following you across sites. Protecting your digital fingerprint reduces the potential for privacy invasions and undesired consequences of profiling.

Key Risk #3: Sharing of Personal Data with Third Parties 

In addition to directly collecting your personal information, many retailers share your data with third-party companies. Common types of third parties include analytics firms that track site visits, shipping carriers that deliver orders, and payment processors that handle transactions. However, the third-party networks extend far beyond just these essential partners.

Retailers share information with dozens or even hundreds of third parties through tracking tools and data aggregation. This extensive sharing means your data can end up in the hands of companies you may have yet to hear of and have no direct relationship with the retailer of your provided information. Once shared, these third parties can combine the data they receive with information gathered from other sources, creating highly detailed profiles about individuals.

Very few consumers realize how much their data is shared indirectly through these third-party relationships. Retailers often use broad legal language in their privacy policies to justify extensive data sharing. So, in effect, by providing information to one company, you lose visibility and control over how many other entities across various industries may access and utilize your personal information for their own purposes.

This can include using profile data for targeted marketing and advertising. To minimize third-party profiling risks, experts recommend carefully reviewing a retailer’s privacy policy, limiting personal details provided when possible, and utilizing tools that block third-party trackers and scripts from gathering browsing data. Maintaining an element of privacy from extensive third-party data collection and use is challenging but important.

Key Risk #4: Minimizing Privacy Risks 

While sharing some personal data is necessary for online orders, you have options to minimize risks from potential privacy threats. One strategy is utilizing anonymous email addresses and virtual credit card numbers when purchasing. This prevents sharing real contact and financial information that could be exposed in a data breach.

Another important step is opting out of data sharing and sales whenever possible. Many retailers and third parties allow customers to opt out of having their information used for purposes beyond fulfilling orders. Be sure to check a company’s privacy policy and opt-out instructions thoroughly. You should also regularly monitor bank and credit card statements for suspicious charges and your credit reports for new accounts or inquiries. Catching identity theft early can help mitigate damage.

It’s also worth contacting lawmakers to voice support for comprehensive federal privacy legislation that gives people more control over how companies utilize their details. Currently, privacy laws vary widely by state and sector. Stronger regulations could mandate greater transparency around data collection and sharing practices while providing consumers with opt-out and deletion rights. By protecting privacy proactively and catching issues quickly, you can still enjoy the convenience of online shopping without constant security worries.

Conclusion: Save Yourself from E-commerce Data Breaches

So, some of the major risks consumers face include data breaches that expose their information, extensive third-party data sharing and aggregation, and profiling used for targeted advertising or other purposes. While online ordering offers unparalleled convenience, it’s important to be informed of these privacy threats lurking in the shadows of the digital marketplace. By taking proactive steps like using anonymous accounts, carefully opting out of sharing wherever possible, and routinely monitoring your information for suspicious activity, you can maintain an element of control over your data.

In the future, consider contacting lawmakers to support comprehensive privacy legislation on the federal level, giving individuals more say over how companies utilize personal details. You can also help retailers with strong privacy policies offering transparency and meaningful control options. With awareness and informed actions, consumers can continue enjoying the ease of direct-to-consumer shopping without constant security and privacy worries. Your personal information is worth protecting, so don’t be afraid to put up some guardrails.

FAQs

What information is considered “personal” data?

Data like name, address, phone number, email, date of birth, social security number, payment details, purchase history, health information, biometric data, etc. are all considered personally identifiable information (PII).

How can I limit the personal data I provide?

Use a PO box instead of your physical address, only share alternative/burner contact info like Google Voice number, pay with virtual credit cards instead of your main one, etc.

Can retailers really share my data with anyone?

While laws regulate certain industries, retailers generally have wide rights over consumer data. Read their privacy policy carefully to understand who they may disclose data to.

What if I want a company to delete my data?

You can request companies delete your personal data, though exceptions exist. Make requests in writing and follow up if not fulfilled in a timely manner.

How can I check who has my data?

You can regularly check your credit reports for accounts you didn’t open. You can also use services like DeBunk to scan the Internet for your email/phone number usage.

What can be done about targeted ads?

Use ad blockers and anti-trackers, clear cookies regularly, don’t click on suspicious ads, and opt out of ad services/data brokers, if possible, through their websites.


6 views0 comments

Comments


© 2023 MonoidLabs Private Limited Copyright and rights reserved

1207 /343 & 1207 /1/343/1, 9th Main, 7th Sector, HSR Layout, Bangalore South, Bangalore- 560102, Karnataka 
CIN: U62091KA2023PTC180209

Kuttl

Blog

bottom of page