Target Could Be Liable for $3.6 Billion from Security Breach - By Kevin Parrish
This is just the beginning.
Target said on Friday that it is actively partnering with the United States Secret Service and the Department of Justice on the ongoing investigation into the malware that affected Target’s point-of-sale system in U.S. stores. The company can’t say anything further, as the Secret Service wants the details of the forensics and investigation under wraps.
"We take this crime seriously. It was a crime against Target, our team members, and most importantly, our guests. We’re in this together," said CEO Gregg Steinhafel days ago. "We recognize this issue has been confusing and disruptive during an already busy holiday season. We want to emphasize that the issue has been addressed and let guests know they can shop with confidence at their local Target stores."
According to SuperMoney, Target may be facing a fine of $90 for each cardholder’s compromised data, equaling a hefty if not scary $3.6 billion USD liability. That’s in addition to civil litigations, fines from banks and credit card institutions, the cost of re-fortifying its network and related security evaluations, and more.
TechCrunch explains that the $90 fine stems from the PCI Council, which was formed in 2006 by Visa, American Express, JCB, Discover and MasterCard. This group oversees the new Payment Card Industry Data Security Standard, or PCI SDD. This standard defines how organizations manage cardholder information. If retailers are found violating the standard, they’re fined $50 to $90 per cardholder data compromised.
On Thursday Target confirmed that hackers managed to access its computers and stole the credit and debit information of around 40 million customers who shopped at Target, which has nearly 1,800 stores nationwide, between November 27 and December 15. The thieves retrieved customer names, credit card numbers and expiration dates.
As of Friday, two separate class action lawsuits were filed in U.S. District Court in Minnesota, filed on behalf of three Target customers who claim they’re suing for all affected customers. They are accusing the company of negligence, and claim that the company failed to notify customers as soon as it learned of the theft.
"In one of the largest-ever commercial breaches of private information, Target failed to secure the payment information of its customers over the busy holiday shopping season,” reads one of the suits, filed by Minneapolis attorney E. Michelle Drake. "As a consequence of Target's conduct, Plaintiffs and the classes are exposed to fraudulent charges, identity theft, and damage to their credit scores."
If the whole hacking ordeal wasn’t bad enough, KrebsOnSecurity reports that the stolen credit card information is being sold in the underground black markets for between $20 and $200. Even more, one security team was able to purchase a portion of the numbers before Target admitted to the data breach. That seemingly backs up the lawsuit claiming that Target didn’t acknowledge the problem in a timely manner.
That said, the fines Target will likely face with the PCI Council will merely be the proverbial tip of the iceberg.