Credit Unions: Target's Credit Card Breach Will Cost Consumers, Financial Industry
ONTARIO, Calif., Dec. 20, 2013 /PRNewswire/ -- With more than 40 million credit cards potentially affected by the security breach at Target, credit union officials say it's time for federal and state officials to take action to prevent the cost of such breaches from being passed along to consumers and the financial services industry.
"When retailers have security breaches in their credit card information, they see it merely as an inconvenience, but there's also a significant financial impact on consumers and financial institutions," said Diana Dykstra, president and CEO of the California and Nevada Credit Union Leagues. "Every consumer now has to keep an eye on their credit information, and there likely will be headaches for both consumers and the financial services industry, with the potential need to replace millions of cards. It's an embarrassment for a retailer, but the breach costs fall on the shoulders of consumers and their financial institutions, like credit unions."
Dykstra says each card costs credit unions $5-$10 to reissue and deliver. This expense is greatly exacerbated by the immense cost incurred by credit unions to reimburse their members who have lost funds due to fraudulent transactions. "California and Nevada credit unions have been inundated by thousands of calls from members concerned about their credit information in the wake of the Target incident," she added.
The card data breach at Target should prompt the public and lawmakers to engage in a dialogue about the antiquated magnetic strip card technology. Today's dialogue around card security should emphasize the need of retailers and financial institutions in the United States to adopt the more secure chip and pin card technology. Chip and pin card technology is already widely used in other countries and has proven to be far less vulnerable to security breaches.
"It's time to make sure retailers tighten the security of their systems," Dykstra said. "A powerful incentive would be to hold them responsible for the cost of these breaches instead of consumers and financial institutions. This is a bipartisan issue our state and federal elected officials need to address."
For more information, go to www.WeOwnOurBank.com.
About the California and Nevada Credit Union Leagues: With headquarters in Ontario, CA, the California and Nevada Credit Union Leagues are the trade associations representing the interests of more than 400 credit unions in California and Nevada, and their 10 million members.
SOURCE California and Nevada Credit Union Leagues