Recovering card losses after third-party breaches
Some credit unions have received settlements; should you take your situation to court?
Payment card data breaches, in which credit and/or debit card information is stolen from a third-party, have been occurring at an alarming frequency the last several years. According to the non-profit Identity Theft Resource Center, the number of data breaches in the United States alone increased from approximately 200 in 2005 to more than 1,300 in 2017.
Each of these incidents can affect tens (if not hundreds) of millions of consumers. For example, Target reported that a 2013 breach of its systems compromised more than 40 million payment cards. A data breach reported by Home Depot the next year affected approximately 56 million cards. More recently, Equifax acknowledged in 2017 that a data breach exposed highly sensitive personally identifiable information for over 145.5 million people.
But while consumers are often the focus of media attention surrounding payment card data breaches, it is the financial institutions that issued the affected payment cards who bear the brunt of the harm. Credit unions have been at the forefront of recent litigation to recover these costs, bringing class actions against the merchants whose allegedly lax security controls resulted in payment card information being stolen.
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