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Target Breach Has Cost Credit Unions Nearly $30 Million: Association

24
Jan
2014

According to a preliminary report from the Credit Union National Association (CUNA), credit unions across the nation have so far incurred nearly $30 million in costs as a result of the massive data breach that hit Target Corp. between late November and mid-December.

The California and Nevada Credit Union Leagues, which represents more than 400 credit unions in California and Nevada, said that the CUNA survey asked credit unions impacted by the Target data breach to outline the costs and burdens they have seen as a result.

According to the survey, more than 530,000 debit and credit card accounts at California credit unions alone were affected by the breach, representing an estimated $2.7 million in card reissuance and other costs.

The average replacement cost per card is $5.10, the association said.

Those costs likely don’t include potential fraud losses, which could be substantial, CUNA’s survey-result analysis states.

“The impact of this breach—both on consumers and financial institutions, including credit unions — is astonishing,” said Diana Dykstra, president and CEO of the California Credit Union League. “This reinforces the need for national legislation. As it stands now, financial institutions are left holding the bag every time a retailer leaves itself open to a security breach.”

“Credit unions continue to seek solutions to the merchant data breach problem,” a statement from the California and Nevada Credit Union Leagues said. “Credit unions are advocating for increased security at the retail level, more consumer notification as to where and how their information was breached, and reimbursement from the merchant for the breach to the financial institution — providing equity for the mutual cost of protecting consumers’ financial data.”

Earlier this month, Target said it had not yet been able estimate the costs, or a range of costs, related to the data breach. However, the company said expenses related to the massive breach may include liabilities to payment card networks for reimbursements of credit card fraud and card reissuance costs, liabilities related to REDcard fraud and card re-issuance, liabilities from civil litigation, governmental investigations and enforcement proceedings, expenses for legal, investigative and consulting fees, and incremental expenses and capital investments for remediation activities.

“These costs may have a material adverse effect on Target’s results of operations in fourth quarter 2013 and/or future periods,” the company said.

Related: Nieman Marcus: Hackers Stole Details of 1.1 Million Customer Credit Cards

Related Analysis:How Cybercriminals Attacked Target

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Managing Editor, SecurityWeek.Previous Columns by Mike Lennon:Target Breach Has Cost Credit Unions Nearly $30 Million: AssociationNieman Marcus Says Hackers Stole Details of 1.1 Million Customer Credit CardsImproved Cyber Security Could Save Global Economy Trillions: World Economic ForumVMware Expands Mobility Offerings With $1.54 Billion Acquisition of AirWatchCisco Revamps Security Training Programs, Adds Cybersecurity Specialist Certification

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