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Data Breaches and Financial Performance: Lessons Learned from Target

In December we reported the data breach at Target, a US based retailer impacting 40 million customers.  In the meantime the company announced that 70 million of its customers would be at risk.

The company stated that as part of Target’s ongoing forensic investigation, it has been determined that certain customer information — separate from the payment card data previously disclosed — was taken during the data breach.  Thus the data breach is much larger than previously reported.

TargetWhat is at stake for the company?  It knocked off 20% of its quarterly profit for the 4th quarter as sales declined by 2.5% in the fourth quarter. 

“I know that it is frustrating for our guests (customers) to learn that this information was taken and we are truly sorry they are having to endure this,” said Gregg Steinhafel, chairman, president and chief executive officer, Target. “I also want our guests to know that understanding and sharing the facts related to this incident is important to me and the entire Target team.”

Customer will have zero liability for the cost of any fraudulent charges arising from the breach. To provide further peace of mind, Target is offering one year of free credit monitoring and identity theft protection to all guests who shopped our U.S. stores. Guests will have three months to enroll in the program. Additional details will be shared next week.

Source: Target Press Release

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