Retail
Home Depot Data Breach May Have Hit 60 Million Customers
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A data breach recently disclosed by Home Depot Inc. (NYSE: HD) may have been one of the largest of all time. In total, the number of customers affected reached 60 million, according to a new piece of research. The figure shows just how vulnerable the online records of most Americans may be.
BillGuard experts report:
Based on our data, Home Depot’s statements, (security blogger Brian) Krebs’ analysis, and industry analysis, we believe that approximately 60 million accounts were exposed in the Home Depot breach, and estimate that $2-3 billion in fraud is likely to strike these compromised accounts overall.
The factors contributing to this, and the basis for our estimate for each:
Number of cards likely exposed to the hackers: 60 million, based on BillGuard users’ exposure and adjusted to the overall cardholding population. This is consistent with New York Times reporting based on a source familiar with the investigation.
Percentage of those accounts that will likely experience fraudulent use of their stolen card: 10-15%, based on BillGuard data from this breach and previous breaches. This is roughly consistent with analyst data from Jeffries, but considerably lower than fraud occurrence data presented by Javelin.
Average amount of fraud posted to defrauded accounts: $332, based on BillGuard data from this breach and previous breaches.
By way of contrast, Home Depot’s revenue last year was $78 billion.
It is too early in the process of evaluating the massive hack to say what Home Depot’s liability may be, at least as it might be set in a court of law, but the exposure could harm its bottom line as it did with Target Corp. (NYSE: TGT). As was also the case with Target, top management at Home Depot has a great deal to account for. The press has already speculated about the fate of senior management.
The news is yet one more reason Americans have to be wary about offering any personal data to retailers. However, most consumers have little choice, as the use of credit cards has become virtually universal, and no better system is likely to be put in place in the foreseeable future.
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