Despite efforts on all sides to keep costs at a minimum, financial institutions are still dealing with the costs from Target’s data breach.
According to reports by the Consumer Bankers Association and the Credit Union National Association, the data breach’s costs have surpassed $200 million for financial institutions. That number is expected to grow, since only 21.8 million of the 40 million stolen credit and debit cards have been replaced to date, the trade associations said.
Both associations have had significant increases in their calculations of what financial institutions will end up paying out in an effort to restore customer accounts since the initial finding. The Credit Union National Association reported an increase from $25 million to $30.6 million since its original estimate. The Consumer Bankers Association, which represents the nation’s largest financial institutions including many regional banks, figured $172 million as the cost of card replacement, an increase from its original indicators that suggested $153 million.
Making matters more grim, the associations did not figure any fraudulent charges made against the accounts when calculating the costs to financial institutions. If those charges were added to the collective costs of the data breach the estimated impact would far surpass the recorded $200 million, since consumers are not held liable.
The massive retailer’s holiday data breach took place between Nov. 27 and Dec. 15 of 2013. It was originally believed to have affected about 40 million Target accounts including credit and debit cards. After further investigation, Target officials revealed that hackers stole not only card information, but personal information – including names, phone numbers, as well as email and mailing addresses – from as many as 70 million other customers.
Since the effects of the data breach have put so much monetary stress on financial institutions, Beasley Allen Law Firm filed a class action lawsuit on Dec. 30 on behalf of Alabama State Employees Credit Union, which is representing the Plaintiffs – credit unions, banks and other financial institutions – against defendant Target Corporation. Beasley Allen lawyers Jere L. Beasley, W. Daniel “Dee” Miles, III; Larry A. Golston and Andrew E. Brashier are representing the Plaintiffs.