Data breach could cost Target over $1 billion

According to the Consumer Bankers Association (CBA), the Target data breach has cost US banks over $172 million in reissued

According to the Consumer Bankers Association (CBA), the Target data breach has cost US banks over $172 million in reissued and replaced credit and debit cards.

CBA has substituted an average of 17.2 million cards, resulting in each card costing about $10 to replace. The price breaks down into several segments including the card itself, informing the card holders of a card reissuing, shipping and activating the card, which brings with it customer support and care.

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CBA CEO Richard Hunt also added the amount spent does not include handling of fraudulent use resulting from the compromised information that soon made itself to the black market. Hunt emphasizes the importance of data security, and warns other retailers of the snowball effect following a data breach.

A report done by analysis firm Jefferies, predicts Target will eventually receive a “breach bill” of over $1 billion from payment card industry companies. This is given if 4.8 million-7.2 million of the affected 40 million cards shows traces of fraudulent activity.

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Targets credit card terminals were breached during the holiday season, starting November 29th (Black Friday) and lasted 3 weeks.  A total of 40 million cards were affected by the breach and reports of other retailer such as Neimun Marcus were also breached during this time frame.

Security firm IntelCrawler found the source of the malicious software that was responsible for the card information being compromised. According to IntelCrawler, the person behind the software was a 17 year old Russian teenager.

 

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