Home Depot breach costs credit unions nearly $60 million,135K GA cards affected

Published: Oct. 31, 2014 at 6:08 PM EDT|Updated: Nov. 30, 2014 at 7:08 PM EST
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More than 7.2 million credit union cards were affected by the recent Home Depot breach, costing credit unions nearly $60 million according to a survey by the Credit Union National Association (CUNA). Nearly 135,000 cards were from Georgia, with an estimated total cost of $1,081,105.

CUNA estimates the total cost to credit unions (to date) of the Home Depot breach is $57.4 million.

The results of the survey show the cost of the violation per card issued by credit unions was $8.02, which included costs for reissuing new cards, fraud and all other costs such as additional staffing, member notification, account monitoring and more.

The compiled data is from 544 responding credit unions across the U.S. The responding credit unions collectively issued 14.9 million debit cards and 5.2 million credit cards, for a total of 20.1 million cards outstanding. That represents 28.2 percent of the 53 million debit cards issued by credit unions, 32.5 percent of the 16 million credit cards outstanding and 29.2 percent of 69 million cards outstanding.

John Kerley, Chief Operating Officer of Cooperative Services, Inc., a service organization owned by 53 credit unions in Georgia said credit unions are taking the brunt of the fiscal damages incurred by data breaches.

"Merchants, which allowed the breaches to occur, have no financial responsibility to make the consumer or the financial institution whole," Kerley said. "Financial institutions are the ones who bare the expense for the merchants' negligence. Financial institutions are held to a much higher standard."

CUNA conducted a similar survey in the wake of a data breach at Target stores in December. That survey found the Target breach cost credit unions nearly $30 million and to date, credit unions have not been reimbursed for the costs they incurred as a result of the Target breach.

"The cost to credit unions of data breaches - which seem to be occurring with increasing regularity - is rising, as the CUNA surveys clearly demonstrate," said CUNA President and CEO Jim Nussle. "The bottom line is that credit union members end up paying the costs, despite the fact that the credit unions they own had nothing to do with causing the breach in the first place."

Nussle added that all participants in the payment process have a shared responsibility to protect consumer data.

"However, the law and the incentive structure today allow merchants to abdicate that responsibility, making consumers vulnerable," Nussle said. "Congress has a role to play in addressing the issue of merchant data breaches by making sure all of the participants are playing by the same set of data security rules and that merchants who hold consumer data and allow that data to be breached, are responsible for the costs incurred by others. Congress must act to protect consumers by taking steps to enhance data security standards for merchants."

CUNA Chief Economist Bill Hampel, who conducted the survey, said the results show more than 80 percent of credit unions affected by the breach have reissued or will reissue all affected cards. Nearly one in five will reissue or have selectively reissued cards in response to member requests or other factors.

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