Data Breach Resulted in Millions of Dollars in Expenses for Target

August 12, 2014 by No Comments

In the aftermath of the large credit and debit card breach Target Corp.Mortgage calculator faced in 2013, the company has reported $148 million worth of expenses, $38 million of which will be offset by insurance coverage.

The December 2013 data breach affected a total of 70 million customers and has left the company scrambling to gain back consumer trust. As new information becomes available, like the company’s breach–related expenses, Target is focused on being transparent with its customers to provide clarity on the situation and ease worried minds.

Having reported $61 million in expenses to the Security and Exchange Commission for its fourth quarter of 2013 back in March, Target then declined to estimate total breach-related costs when filing with the SEC in May.

While this report includes anticipated claims from debit and credit card companies, potential legal and administrative fees were not accounted for, and the company appears to be facing many lawsuits from different parties.

Many complaints have been filed against Target, both by consumers and financial institutions. Banks and credit unions claim the breach cost them $203 million in replacement debit and credit cards for customers who were affected by the breach.

The company has also been targeted by government agencies at both the state and federal level. Target is under investigation by the SEC, Federal Trade Commission and state attorneys general.

In the wake of investigations and lawsuits, Target will continue to forge ahead with public statements on financial expenses and other breach–related news under new leadership.

Interim President and Chief Executive Officer John Mulligan, who stepped in after Gregg Steinhafel resigned amid the company’s data breach, will be replaced by Brian Cornell, former PepsiCo Inc. CEO, on August 12.

On August 20, Target is due to give a briefing on its second quarter earnings and estimated earnings for the duration of the fiscal year.

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