Credit Unions Pay Price for Wendy's Data Breach
Lansing, MI (June 28, 2016) The Michigan Credit Union League, its member credit unions and the Credit Union National Association (CUNA) are advocating for stronger accountability for merchants and card network companies after a data breach at Wendy’s® Restaurants forced a number of Michigan credit unions to cover the associated costs.
According to CUNA, industry sources estimate the fraudulent charges have been even larger than in other recent data breaches such as those at Target and Home Depot which combined cost credit unions more than $90 million.
On Wednesday, CUNA announced it was joining a data breach lawsuit against the restaurant chain.
One of the Michigan credit unions impacted by the breach, Belle River Community Credit Union CEO Vicki McIntosh said her credit union paid $8,000 in fraudulent charges. In addition, the credit union paid out $1,000 in out-of-pocket costs to issue new cards as a result of the breach which was Wendy’s reportedly first discovered in fall of 2015. The costs equated to one month of the $20.2 million asset credit union’s net income.
McIntosh, Michigan credit union leaders, and the Michigan Credit Union League CEO Dave Adams have called on lawmakers to require retailers to be held to the same federal data breach standards of which credit unions are subject to, and to enforce the laws currently in place.
“The current system is broken—retailers big and small experience a breach and months go by without any notice to credit unions of which cards are compromised which results in a spike in fraud losses—and once again local credit unions are left holding the bag,” MCUL CEO Dave Adams said. “Again, we call on lawmakers and regulators to use their full authority to ensure both retailers and card network companies are doing their part to protect customer’s information instead of leaving credit unions to continually shoulder the burden.”
According to Wendy’s,® malware has been discovered on some franchise restaurants' POS systems. The company is still investigating the total number of locations impacted.
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