Press
Updated results show Target breach costs credit unions more
(February 13, 2014) — The Credit Union National Association (CUNA) has updated its projections on the cost of the Target stores data breach, estimating that credit unions have thus far incurred costs of $30.6 million, and reissued around 4.6 million credit and debit cards. These projected costs are predominantly for card reissuance and other administrative expenses resulting from the breach, however CUNA predicts that fraud losses, likely to be incurred in the future, will greatly add to the total.
“Although Target is ultimately responsible for this data breach, credit unions must solely cover these costs of their card program administration. It’s time for retailers like Target to step up and accept their fair share of the costs associated with these types of data breaches,” said CUNA President and CEO Bill Cheney.
“Credit unions are owned by their members, and because of that cooperative structure, the costs of these types of breaches fall directly to credit union members. Congress should act to stop this cycle, and hold merchants accountable.”
The results of the CUNA survey show that, on average, the Target breach has cost credit unions about $5.68 per card affected by the security lapse. Other expenses have come from administrative costs. Around 37% of credit unions reported having increased staffing, and additional overtime shifts as a result of the data breach. Smaller credit unions typically must pay more to replace cards, according to CUNA’s Cheney. “Unlike trillion-dollar banks, with their economies of scale, smaller credit unions face a more expensive proposition in replacing their cards – but they must cover those costs alone,” Cheney said.
CUNA’s data comes from a survey of credit unions which began on January 3rd. Over 1,112 credit unions have responded. CUNA previously estimated that the overall costs would be between 25-30 million dollars. As noted, these costs most likely include only small amounts of fraud losses, which are likely to occur later and could be substantial.