Community banks have reissued more than 4 million debit and credit cards after the card breaches at Target and Neiman Marcus, an effort that has kept fraud on customer accounts to a minimum.
The Independent Community Bankers of America said Wednesday that only 1 percent of community bank customers have reported fraud on their accounts following the notorious hacks, while the banks swallowed $40 million to reissue the cards.
The ICBA doesn't expect the cost of card reissuance to go up significantly going forward, but a material increase in fraud costs is still possible because some consumers may have yet to report it on their accounts, says Viveca Ware, an ICBA staff expert.
Last month, JPMorgan Chase CEO Jamie Dimon said his company had replaced 2 million debit and credit cards as a result of the security breaches, but warned in an investor call that "this story is not over, unfortunately."
The response by banks comes after Target announced in December that it suffered a data breach from the day after Thanksgiving until Dec. 15 that exposed 40 million credit card and debit card accounts. Hackers also got the personal information of up to 70 million individuals.
Neiman Marcus disclosed in January that 1.1 million card accounts had been compromised in a data breach at its stores. Michaels and White Lodging have followed with their own disclosures of data hacks.
Last week, retailers and banks, represented by their subsequent trade groups, agreed to a partnership to figure out ways to better protect consumer data from breaches. They are working together to find safer ways to share consumer information, to identify technologies that reduce cyberattack risks and involve all parties in the payment process to combat security threats.
The collaboration comes after both sides took turns blaming each other for security risks in front of Congress.
Has your community bank reissued your card?
Follow me on Twitter: @JannaHerron.