I’ll keep this one about the target breach really short and simple. It’s really just a follow up to the blog I wrote about whether Target and other retailers should invest the money to adopt new technology to preventatively fight fraud. In that blog I asked the question: “Is it worth $100 million to implement chip and PIN technology?” And my answer was a resounding, “YES!”
Just in case anyone needs any more evidence, take a look at Target’s earnings report that was released in February. Target reports that its net earnings were down $520 million in the fourth quarter, down 46 percent from the same period a year earlier. In a huge understatement, Gregg W. Steinhafel, Target’s chief executive, said, “Results softened meaningfully following our December announcement of a data breach.”
In addition to the earnings’ losses, the company still faces unknown expenses related to dealing with the aftermath of the Target breach. Target already reported $61 million of pretax expenses related to the breach in the fourth quarter. It also expects to pay out $44 million in insurance payments for a net cost of $17 million. And it cannot even begin to estimate the breach’s future costs, which could include litigation, fraud claims and investigative fees. Are you sure you still want to ignore the human, cyber and physical security of your data?
John Sileo is an an award-winning author and keynote speaker on identity theft, internet privacy, fraud training & technology defense. John specializes in making security entertaining, so that it works. John is CEO of The Sileo Group, whose clients include the Pentagon, Visa, Homeland Security & Pfizer. John’s body of work includes appearances on 60 Minutes, Rachael Ray, Anderson Cooper & Fox Business. Contact him directly on 800.258.8076.