Home Depot spent $43 million on data breach in just one quarter

[Audrey McNeil <audrey () riskbasedsecurity com>]

http://www.networkworld.com/article/2852473/home-depot-spent-43-million-on-data-breach-in-just-one-quarter.html

Home Depot spent US$43 million in its third quarter dealing with the
fallout of one of the largest ever data breaches, highlighting the costly
nature of security failures.

The retailer said in a regulatory filing on Tuesday that it expects $15
million of that cost will be reimbursed by a $100 million network security
and privacy liability insurance policy.

The $43 million was spent on investigations, providing identity theft
protection services to consumers, increased call center staffing and other
legal and professional services.

Attackers stole 56 million payment card details and collected 53 million
email addresses of people who shopped at Home Depot’s stores between April
and September in the U.S. and Canada. They gained access to Home Depot’s
network by using the login credentials of one of the retailer’s vendors.

The retailer warned that it expects “to incur significant legal and other
professional services expenses associated with the data breach in future
periods.”

Home Depot is also facing 44 actions filed in courts in the U.S. and
Canada. It expects more claims may be filed on behalf of customers, payment
card brands, payment card issuing banks and shareholders.

Payment card networks may make claims seeking to recover incremental
counterfeit fraud losses and costs for reissuing cards, Home Depot wrote.
Its liability will depend on whether it was noncompliant with data security
standards, which contributed to the breach.

An independent auditor found that its network which handles payment card
data was compliant with data security standards in the fall of 2013, Home
Depot wrote. But it was undergoing certification for 2014 when the data
breach occurred, it said.

“The forensic investigator working on behalf of the payment card networks
may claim the company was not in compliance with those standards at the
time of the data breach,” Home Depot wrote.

Retailers are required to follow the Payment Card Industry’s Data Security
Standards (PCI-DSS), which are a set of guidelines for securing card data.
If found noncompliant, a business can face liability.

The PCI Security Standards Council has been warning retailers that passing
an annual audit may not be sufficient and that compliance monitoring should
be an ongoing project. Network changes, it has said, could mean a business
can fall out of compliance.

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