Cleaning up the financial mess that followed the data breach at Target stores over the holidays could run the nation's banks and financial institutions "hundreds of millions of dollars, and possibly even billions" – and now they want the retail giant to help pay those costs.
The Star Tribune reports the Consumer Bankers Association on Tuesday said the anticipated cost associated with replacing 15.3 million debit and credit cards compromised by the breach is soaring. U.S. banks have spent more than $153 million so far.
While some banks have replaced cards when customers have asked or when they were fraudulently charged, others have been proactive. Wells Fargo has begun to replace cards and TCF Financial Corp. and U.S. Bancorp have adopted a “replace them all” approach to cards that Target shoppers used during the 19-day breach.
The industry group says it costs an average of $10 for banks to replace a card. Banks must also cover the cost of the customer service involved with helping customers cancel and then obtain replacement cards. Giesecke & Devrient, one of the world’s largest card manufacturers, said it’s added shifts to keep up with the orders.
Target spokeswoman Molly Snyder told the newspaper that she can’t address the reimbursement process “as that is between Target and the banks.” Target has told customers they will not be responsible for unauthorized charges.
The theft affected as many as 110 million people. Investigators say Target was hacked when malware inserted at the discounter's check-out stations stripped consumer information. Lawsuits have been filed across the country that accuse Target of failing to protect that information.
Meanwhile, another credit card scam snaring consumers has come to light as a result of the breach.
CBS News advises all credit card holders to look for a charge for $9.84 on their statements. The Better Business Bureau issued a fraud alert following numerous consumer complaints about that unexplained charge.
It's thought that the charges have been spotted as consumers are more vigilant in eyeballing their bills in the wake of the Target breach. The fraud relies on consumer carelessness; shoppers will often flag a large unexplained charge, but smaller charges go unnoticed or unchallenged.
Consumers who spot an unexplained $9.84 charge should call the card issuer.
"It’s likely that your card or card number is in the hands of a crook," the story said. "You need a new card and to place a fraud alert on your credit file.