BY LAURA ENOCK
Data breaches make for difficult times for credit unions. There is a need to remind members of the severity of the security breach, advise them on steps to take for better protecting themselves, and reassure them that their money is still safe with the credit union. All the while, you know it’s your organization that will have to bear most of the costs connected to any data breach. Credit unions need to keep their financial future secure in order to protect their members.
With disasters like Target and, more recently, Home Depot in the news, and the possibility of more security problems in the future, how to respond to data breaches needs to be a topic of conversation occurring among the leadership team at every credit union. Having to weigh the competing concerns of member satisfaction and institutional financial security with incomplete information is a very difficult challenge to address.
This was the position that North East Texas Credit Union (NETCU) encountered after the Home Depot breach. It knew some of its debit card numbers were at risk. It didn’t know how long it would be before Home Depot released the list of compromised numbers. NETCU faced significant risk of fraud and the knowledge that it would be liable for around 80 percent of the losses incurred as a result of that fraud.
Inaction in a situation like this was not an option. After the events of the Target data breach, NETCU knew it could not withstand another round of fraud losses like it had previously experienced. It knew its membership could not afford the loss and inconvenience of more fraudulent charges.