Target data breach cost to WI credit unions? $600K and counting
The Target breach resulted in the theft of 40 million debit and credit cards, and encrypted PIN data, and the names, mail and email addresses, and phone numbers of up to 70 million individuals.
The arts-and-crafts stores Michaels subsequently made the news for another big data breach—on the heels of one it experienced only a few years ago—and luxury retailer Nieman Marcus reported a months-long breach simliar to that of Target, compromising the personal information of millions more Americans. An eight-state data breach involving Mariott Hotels soon followed.
As these events unfolded, credit unions received compliance tips to aid their follow up and the NCUA renewed warnings to consumers about increased opportunity for scam artists to play on consumers' fears to conduct telephone scams.
The Credit Union National Association has zeroed in on the Target breach to:
"Even before these high-profile data breaches, credit unions were being under-compensated for the administrative costs that go hand-in-hand with offering plastic cards, and that doesn’t even begin to consider the hassle and impact on consumers," said League President & CEO Brett Thompson.
He is referring to interchange fees paid to debit card issuers, affected recently by federal financial reforms. The 2010 Durbin Amendment to the Dodd-Frank Act severely limited credit unions' ability to recover their actual costs as a result of a data breach. A battle over what fees should be allowed continues to play out in court.
"The massive cost to credit
unions’ member-owners related to the Target breach—let alone
the others that are still unfolding—provide a great example of how
the federal cap on interchange does not factor in enough of the costs
that card issuers face for providing their services," Thompson
"Being able to share an accurate cost impact on Wisconsin credit unions of this single, massive breach will continue to provide a critical piece of the puzzle for our ongoing advocacy," he said.
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