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Target costs credit unions $30 million

By David McMillin · Bankrate.com
Thursday, January 23, 2014
Posted: 11 am ET

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.

Are you worried about your credit union account?

Reach me on Twitter: @davidmcmillin.

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11 Comments
vb
January 28, 2014 at 12:18 pm

They want this to happen so you will eventually MAKE them put a chip in your hand or your forehead.

SHAWN
January 26, 2014 at 10:18 pm

I WORKED FOR TARGET.LEFT FOR MEDICAL REASONS.NOT GOING BACK. WHAT i saw and heard prior to this problem MADE ME SICK TO MY STOMACH. THE ONLY REASON I CANT SAY MORE IS THEY PROBABLY KNOW WHO I AM. IF YOU HAVE PRESCRIPTIONS FILLED AT ONE OF THEIR STORES YOU MAY WANT TO KEEP AM EYE ON THEM.

thisiscrazy
January 26, 2014 at 9:50 pm

we need to stiffen the penalty for white collar crime. life in prison sounds good to me. who's going to pay for this? we are. if countries like Russia ETC don't want to adopt to stiff laws then they should be sued and have to pay up. i'm sick and tired of crooks they need to do hard time. send a message

Ted
January 26, 2014 at 8:33 pm

Pointing fingers at each other will not stop the techies from stealing again.Target and CU,s need to huddle and and figure out better ways to make sure there are no more breaches,and protect the consumer. I bet next time this happens Target will lose lots of customers,and CU,s will start some kind of fee to their customers to offset the losses.

disgusted
January 26, 2014 at 7:18 pm

@ Michele who said Target "stood up and said we have a problem." Yeah, they did, but they didn't say anything until the middle of December when this started weeks earlier. YOUR information, over 100 million peoples' worth of information, including DOB, SS#, street address, phone number - everything needed to be "you" was taken and all that information was on the black market during the time Target said nothing. So now they're offering customers a year of credit reporting. Just a year. And Target has waited to notify potential victims. I haven't shopped in Target in about 2 years. Guess what I got in my email YESTERDAY - the notice saying my information might have been compromised. So now we're talking a good 2 months that someone could have sold MY information and someone could be pretending to be me. Target had lousy security, they made it super easy for these criminals to get in, leave some lovely malware, get back out and sit and wait for all those numbers and information to start pouring in. Target didn't even know until the Secret Service told them! We need accountability from Target, from all retailers as well as banks. Not going to reimburse Credit Unions? Oh, I don't think so. Only going to offer one year of credit reporting when identity theft can happen a lot later. Oh, I don't think so.

Wow American
January 26, 2014 at 5:27 pm

WOW new card will make all issues disappear. Wake up criminals get smarter and find out where the weakness is. Chip was here before and will not stop the fraud. Companies should be held maybe they will check an id or see more then just profits.

Nothappy
January 26, 2014 at 4:29 pm

This a bigger problem than Target. I hold the banks, credit unions and retailers responsible for not adopting the smart chip credit cards versus the highly vulnerable magnetic strips. It seems Target needs to step out and set an example by investing in the smart chip technology for their own cards and card readers. If the government can mandate HDTV technology and energy efficient lightbulbs why can't they mandate smart chip technology. It's a no brainer!

midumptster
January 26, 2014 at 2:54 pm

Unless retailers are held responsible for their failures, we will continue to have problems. Lack of incentive.
Fiscal responsibility will make retailers more proactive. Instead of a smack on the hand, they need to be hit where it hurts - their bottom line.
Target tried to keep this hidden from the public. While we were unaware our info had been stolen, the criminals were already selling credit cards with the info they stole from Target.
More secure cards are necessary but it is only a matter of time until criminals figure out a way to circumvent it.

Bailjumper
January 26, 2014 at 1:24 pm

Maybe it is about time Target steps up and reimburses these credit unions, instead of saying "it's not my problem". Until this country adopts the more secure credit card the rest of the world uses, problems will be abound.

MICHELE
January 24, 2014 at 2:51 pm

Target stood up and said we have a problem. We have had these breaches where we are notified but the consumer has no idea which restaurant/merchant is the issue(we know who). The problem is much bigger and more costly than just Target. I applaud them for saying they had a problem. No, I don't work for Target. I work at a CU that see's this all the time. Scary.

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