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CUNA Survey Results: Home Depot Data Breach Cost Credit Unions Nearly $60 Million
Friday, October 31, 2014 6:35 AM

Yesterday, Credit Union National Association released its survey results on the September Home Depot data breach. The breach affected 7.2 million credit union debit and credit cards and cost credit unions nearly $60 million to reissue new cards, deal with fraud, and cover other costs.

Cost for Credit Unions

The CUNA results further show that 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, and account monitoring).

Conducted from Oct. 1 to Oct. 24, the CUNA survey is the second this year by the nation's largest trade group for credit unions to gauge the impact of data breaches on credit unions. In January, CUNA conducted a similar survey in the wake of a December 2013 data breach at Target stores. That breach cost credit unions nearly $30 million. The Home Depot breach costs—at $57.4 million, nearly twice as much as the Target breach—affected more credit union debit and credit cards, and the cost per affected card was considerably higher in the case of the Home Depot breach.

Further, the most recent CUNA survey found that, 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 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 that more than four in every five (80.1 percent) of credit unions affected by the breach have reissued or will reissue all affected cards. Nearly one in five (18.5 percent) will reissue or have selectively reissued cards in response to member requests or other factors. The remainder, 1.4 percent, do not plan to reissue any cards.

Card Reissue Action Plans

"Card reissuance is an expensive proposition, representing about a quarter of the total costs to credit unions of these breaches," Hampel said. "But our latest survey found that fraud is the most expensive component of costs, amounting to $4.89 for each card, or 60 percent of the total costs."

Credit unions responding to the survey (835 total) have issued a total of 20.1 million cards outstanding (14.9 million debit cards and 5.2 million credit cards). The total represents 28.2 percent of the 53.0 million debit cards issued by credit unions, 32.5 percent of the 16 million credit cards outstanding, and 29.2 percent of the total of 69 million cards outstanding.

Changes in Call Volume

Click here for more detailed info on the survey results.

Home Depot Data Breach by State in the Cornerstone Region

As of Oct. 24, 2014

 

Estimated Total Credit Cards

Estimated Total Debit Cards

Estimated Affected Credit Cards

Estimated Affected Debit Cards

Estimated Total Affected Cards

Estimated Cost per Affected Card

Estimated Total Cost to Date

Arkansas

35,306

106,921

2,466

12,194

14,661

$8.02

117,579

Oklahoma

131,682

497,299

9,199

56,717

65,916

$8.02

528,645

Texas

880,457

3,915,731

61,504

446,592

508,095

$8.02

4,074,923

TOTALS

1,047,445

4,519,951

73,169

515,503

588,672

$8.02

4,721,147