Target’s data breach from 2013, which saw 40 million customers have their credit card details leaked, will cost the US discount retailer a further $148m, according to its most recent quarterly financial report.
An entire section of the statement discusses the breach.
“In second quarter 2014, the Company expects to record gross breach-related expenses of $148 million, partially offset by the recognition of a $38 million insurance receivable.”
However, the situation is far from being resolved. Target said in its statement:
“It is reasonably possible that the Company may incur a material loss in excess of the amount accrued.”
This could be the case due to Target being aware that further clams may be made, putting $148m aside to cover payments.
The statement says that the firm can’t presently give an estimation as to the potential loss exposure.
This has indicated that further bad news is on its way for shareholders, but that may not be limited to Target, thanks to the increasing prevalence of significant breaches.
The Target incident serves as an example not only of the short-term effects of a breach, but also the effects one can have in the years after. The cost could potentially be fatal to a business, but if it manages to survive, the damage to its reputation may set a company back years. That is why it is imperative, in this day and age, that business owners open cyber security vacancies sooner rather than later, and keep their data as secure as possible.
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