Experian and TalkTalk have set aside a combined £50m to pay for the damage to their businesses from recent data breaches, which saw millions of customer records compromised.
According to its latest earnings report, Experian seems to have come out of the October security breach, which exposed the data of up to 15 million of T-Mobile customers, relatively lightly – so far.
It has pencilled in “one-off costs” of $20m (£13m) came as a result of its response to the hack, which included notifying affected individuals, offering them free credit monitoring services and informing the appropriate government agencies of the attack.
However, this is likely to be just the tip of the iceberg as the firm also confirmed it has received a number of class action lawsuits in response to the incident and warned investors it is “currently not possible to predict the scope and effect” of the lawsuits as well as government investigations.
Even so, Experian believes it will be able fall back on “applicable insurance recoveries”, for the rest of the costs.
The news follows reports that T-Mobile was named alongside Experian as the subject of at least five US lawsuits seeking class-action status for negligence and violations of consumer protection laws.
Meanwhile, the cyber-attack on TalkTalk could cost it up to £35m in one-off costs, the company has said, even though it revealed last week that “just” 157,000 of its 4 million customers have had their personal details compromised.
Speaking to the BBC, chief executive Dido Harding said: “The estimated one-off costs are between £30m and £35m – that’s covering the response to the incident, the incremental calls into our call centres, obviously the additional IT and technology costs, and then the fact that over the last three weeks until yesterday our online sales sites have been down, so there will be lost revenue as a result.”
There have been no legal challenges as yet to TalkTalk, but where there is a data loss there is always a lawyer ready to make a few bob; whether its cyber insurance – if it has any – will cover these costs remains to be seen.
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