The Target data breach has racked up a hefty tab for credit unions around the country. According to the preliminary results from a survey conducted by the Credit Union National Association, the breach has already cost not-for-profit institutions $25 million to $30 million.
The scary part?
That figure most likely doesn't even include losses from fraudulent activity, which CUNA believes will begin to show up later. Of the 936 credit unions that participated in the survey, 98 percent already had reissued debit cards and credit cards or have plans to do so in the future. Many of them reported a rise in overtime hours and call center volumes, too.
While the breach happened at Target, the retailer isn't automatically responsible for reimbursing banks and credit unions that have to deal with the hassles and expenses of mailing out millions of new credit cards and debit cards.
“Contrary to what some may think, these expenses will not be reimbursed to credit unions and their members by Target or other retailers,” says Bill Cheney, president and CEO of CUNA. "Retailers such as Target are rarely held responsible for reimbursing financial institutions for the costs that the data breach has incurred on them and, in the case of credit unions, their members."
Despite the lack of liability, some credit unions already are looking to recoup those costs.
"CUNA has been taking a leading role in connecting credit unions that are interested in pursuing litigation with lawyers who are bringing these cases," CUNA spokesman Ben Fishel said in an email. "A number of cases have already been filed, and we believe more may be filed in the future."
Banks and credit unions alike have rushed to protect themselves and their customers and members whose cards were compromised.
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