Cost of Target Breach $200M so Far

Wednesday, February 19, 2014 @ 04:02 PM gHale

If manufacturing automation professionals think security is a cost center, they may want to look at the cost of a breach. In one very public case, costs associated with the Target attack have exceeded $200 million so far.

That number comes from data collected by the Consumer Bankers Association (CBA) and the Credit Union National Association (CUNA) who found costs exceed $200 million.

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CBA estimates the cost of card replacements for its members to have reached $172 million, up from an initial finding of $153 million, CUNA has stated the cost to credit unions has increased to $30.6 million from an original estimate of $25 million.

So far, cards replaced by CBA members and credit unions account for more than half of all affected cards. Between members of the CBA and the CUNA, 21.8 million of the 40 million compromised cards ended up replaced. This represents 54.5 percent of the cards Target revealed that ended up compromised due to the December data breach.

“Financial institutions of all sizes have been aggressive in ensuring their customers are protected in response to the Target data breach. CBA’s members have proactively replaced cards, increased fraud monitoring efforts and have expanded call center hours. Consumers should rest assured, our members are taking every step to minimize the impact of this massive breach,” said Richard Hunt, president and chief executive of the CBA.

“Credit unions have replaced or will replace 85 percent of their cards affected by the Target breach at no cost to their members,” said Bill Cheney, president and chief executive of CUNA. “The combined $200 million cost borne entirely by banks and credit unions shows the extent to which financial institutions will go to protect their customers and members.”

The combined $200 million cost does not factor in costs to financial institutions other than credit unions or members of the CBA, nor does it take into account any fraudulent activity which may have occurred or may occur in the future. Fraudulent activity would push the cost of the Target data breach to the industry much higher, as consumers would not be liable.

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