Credit union respondents to a NAFCU survey spent an average
of $226,000 and an estimated 1,600 hours last year on debit and credit card
fraud issues resulting from merchant data breaches, according to the
association’s February Economic and CU
Respondents to the survey report confirmed
that merchant data breaches are becoming an epidemic. “On average, 17.5 percent
of survey respondents’ debit cards and 10.3 percent of credit cards were
exposed in retailer breaches last year,” the report says.
In the event of a merchant data breach and “even in
situations where retailers are to blame for jeopardizing customers’ financial data,
credit unions are the ones that bear the cost to make their members whole,” it says.
NAFCU estimates that merchant data breaches cost the credit
union industry over $31 million in 2014.
The survey respondents said the costs were primarily
attributed to reissuing cards (40.6
percent), followed by fraud investigation
and losses (32.7 percent) and monitoring costs (25 percent).
In response to merchant breaches that occurred last year,
88.5 percent of survey respondents notified their members, 65.4 percent issued
new cards upon request, 57.7 percent placed a fraud alert on the account and
53.8 percent issued new cards unilaterally.
NAFCU was the first financial trade organization to call for
national data security
standards for retailers in the wake of the massive Target breach, and the
association continues to push for legislative action.