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Hannaford Card issuers responsible for breach costs
SCARBOROUGH, Maine (3/27/08)--Banks, credit unions and other card issuers likely will bear the multi-million dollar costs of reissuing credit and debit cards compromised by the data breach at Hannaford Bros., said the Maine-based grocery chain. A spokesperson for Hannaford said the supermarket chain fulfilled its responsibility by identifying and fixing the breach, and by notifying its customers, credit card companies, and financial institutions (Associated Press via Fosters.com March 26). Carol Eleazor, vice president of marketing at the company, said the financial institutions and the card companies are the ones who "manage the card usage." Hannaford Bros. works with them but doesn't make any calls or participate in any other way in the decision on how to deal with the compromised card, she told media. According to a Tampa newspaper, two more class action lawsuits were filed in Tampa--bringing the total filed so far to four, including two filed earlier this month in Maine (Tampa Times March 25). The breach also has brought prompted more data protection bills in state legislatures. Town & Country FCU, based in South Portland, Maine, expects to issue about 14,000 new cards at a cost of $10 to $12 per card, which would total at least $140,000. The costs include staff administrative time, mailing notifications to members, and the reissuing the physical card (Fosters.com March 26). The breach, which affected 4.2 million cards in New England, New York and Florida, was discovered Feb. 27 and made public March 17. The breach, which covers transactions at grocery stores from Dec. 7 to March 10, is unusual because it involved hacking encrypted data while it was in transmission after consumers swiped their cards at the stores' readers. Since 2005, more than 223 million consumers have seen their data exposed in unauthorized data breaches, reported the Privacy Rights Clearinghouse. So far about 2,000 actual incidents of fraud have been reported, said Hannaford.
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