Retail
Home Depot Offers $13 Million to Settle Data Breach Claims
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Home improvement giant Home Depot Inc. (NYSE: HD) filed papers with the federal district court in Atlanta offering to pay up to $19.5 million to compensate consumers who were harmed by the 2014 data breach that affected more than 50 million U.S. shoppers. Of the total offer, some $13 million will pay for customers’ out-of-pocket losses and Home Depot will spend at least $6.5 million to fund 18 months of cardholder identity services.
Home Depot already has booked about $161 million in pretax expenses related to the data breach, according to a report at Reuters, but that may be just part of the overall cost.
Based on a 2015 study by the Ponemon Institute of 350 companies in 11 countries, the average data breach in the United States costs a company an average of $6.2 million or $217 for every lost or stolen record. The amounts represent an increase from the overall average cost of $5.9 million in 2014 and a per-record cost of $207.
Massive data breaches such as the estimated 56 million credit and debit card numbers stolen from Home Depot could end up costing Home Depot $11.6 billion, based on the Ponemon Institute’s per-record cost for 2014.
Based on 1.27 billion shares of Home Depot stock outstanding, the $13 million for out-of-pocket expenses amounts to about $0.01 per share, and of that settlement, plaintiff’s lawyers are expected to receive some $8.7 million.
Home Depot’s stock traded down about 0.8% midday Wednesday, at $125.69 in a 52-week range of $92.17 to $135.47. The consensus price target on the stock is $142.19.
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