ARLINGTON, Va.—A new poll shows that credit unions spent an average of $226,000 as a result of merchant breaches in 2014, and they expect to recover less than 1% through settlements with retailers.
That is a key finding from NAFCU’s February Economic & CU Monitor, that included results of a special survey on data security.
According to NAFCU members who responded to the data security poll, on average, 17.5% of respondents’ debit cards and 10.3% of credit cards were exposed in retailer breaches last year.
Many survey respondents (68%) were alerted more often in 2014 than in 2013 about a possible breach affecting their members’ financial data. According to NAFCU estimates, merchant data breaches cost the credit union industry over $31 million in 2014.
Costs, according to respondents, were primarily attributed to reissuing cards (40.6%), followed by fraud investigation and losses (32.7%) and monitoring costs (25%).
In response to 2014 merchant breaches, nearly every survey participant (88.5%) notified their members, 65.4% issued new cards upon request, 57.7% placed a fraud alert on the account, and 53.8% issued new cards unilaterally.
Respondents estimated that 1,600 staff hours were spent on average handling debit and credit card fraud issues in 2014.
Turing to economic data, the NAFCU monthly survey shows that credit union member growth in December remained at 3% year over year. Share growth increased to 3.9% year over year. The aggregate net worth ratio increased by seven basis points to 10.98% in December. Loan growth fell to 10.1% year over year in, and survey respondents expect little change to the pace of first mortgage loan growth in 2015.