THE BURNED OVER DISTRICT

U.S. banks have spent more than $153 million so far replacing 15.3 million debit and credit cards after the huge data heist from Target Corp., and the numbers are only growing.

The Consumer Bankers Association announced the numbers Tuesday, saying that as more retailers announce breaches the price tag for banks could grow to "hundreds of millions of dollars, and possibly billions."

It's time for Target to step up to the plate and pay some of the costs for one of the largest data thefts recorded in the United States, the industry group said.

"I cannot think of another breach where 1 out of 3 Americans were affected," said Richard Hunt, head of the Consumer Bankers Association. "They've been silent since their first and only response to this. They've been hiding behind the retail trade associations."

The association's members include many of the country's largest banks, and Hunt's punch reflects long-standing tensions between the banking industry and retailers over who is responsible for the growing cost of card fraud...

The Consumer Bankers Association estimates that it costs an average of $10 for banks to replace a card, which is higher than the $4-$5 figure often cited.

The 15.3 million cards replaced to date is a relatively small number, given that U.S. shoppers carry 1.5 billion credit and debit cards, noted David Robertson, publisher of The Nilson Report.

But the customer service required for banks to help anxious customers, particularly with debit cards, is sizable. "That's what adds up," Robertson said.

The unanticipated spike in orders for new cards has sent card manufacturers into overtime. There's been talk of some processing delays and scattered shortages of card stock. Card manufacturers say they're coping well.

Giesecke & Devrient, one of the world's largest card manufacturers, said it's been adding shifts and hours to get the orders processed, as well as shifting jobs to facilities around the globe to balance the load.

// posted by montag @ 1:08 PM