Credit unions estimate $30 million hit from Target breach
11 February 2014 | 5125 views | 0
The National Association of Federal Credit Unions' (Nafcu) estimates that the recent Target data breach could end up costing the credit union community nearly $30 million.
Nafcu chief economist and director of research David Carrier says the average cost for the Target data breach among members was $45,000.
"Credit unions are being hit by a double whammy in terms of numbers of possible data breaches and costs while they continue to pick up the tab for retailers who are not subject to the same high level of data security standards," he says.
Respondents to a Nafcu survey on data security incidents were alerted to a possible breach 263 times on average in 2013, and the average amount spent on data security measures was $158,600. Almost half (42%) of respondents confirmed that their reputation had been harmed due to a merchant data breach.
Nafcu was the first financial services trade association to weigh in on this issue on Capitol Hill and urged Congress to take action and set national data security standards for retailers and merchants.
The Target data breach has so far cost US banks over $172 million in re-issued plastic cards, according to recent figures from the Consumer Bankers' Association.
A recent analysis by Jefferies suggested that Target could be on the receiving end of a $1 billion breach bill from the payment cards industry, working on the assumption that 4.8 million to 7.2 million of the 40 million cards affected by the breach could see fraudulent activity.