The aggregate cost of the massive data breaches at Target and Home Depot rose to nearly $200 million by the end of last year. Target has shelled out $162 million and Home Depot has ponied up $33 million, to-date.
During fourth quarter 2013, Target experienced a data breach in which an intruder gained unauthorized access to its network and stole certain payment card and other guest information. The Company incurred breach-related expenses of $4 million in fourth quarter 2014 and fullyear net expense of $145 million, which reflects $191 million of gross expense partially offset by the recognition of a $46 million insurance receivable. Fourth quarter and full-year 2013 net expense related to the data breach was $17 million, reflecting $61 million of gross expense partially offset by the recognition of a $44 million insurance receivable.
FROM HOME DEPOT:
In the fourth quarter, our gross data breach expenses were approximately $20 million. After estimating our insurance recovery, we recorded approximately $5 million of net data breach related expenses in the quarter. For the year, our gross data breach expenses were approximately $63 million, and after expected insurance recovery our net data breach expenses were approximately $33 million,” she said, later noting that the 2015 guidance for the company did not include any “expenses that we may incur in the future for data breach-related claims.
More than 1,500 data breaches led to one billion data records compromised worldwide during 2014. These numbers represent a 49% increase in data breaches and a 78% increase in data records that were either stolen or lost compared to 2013.
Gemalto’s Breach Level Index also found identity theft breaches also accounted for one-third of the most severe data breaches categorized by the BLI as either Catastrophic (with a BLI score of between 9.0 and 10) or Severe (7.0 to 8.9). Secure breaches, which involved breaches of perimeter security where compromised data was encrypted in full or in part, increased to 4% from 1%.
In addition to the shift toward identity theft, breaches also became more severe last year with two-thirds of the 50 most severe breaches according to their BLI score having occurred in 2014. Also, the number of data breaches involving more than 100 million compromised data records doubled compared to 2013.
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