Data breaches are never a laughing matter, whether they happen to you as an individual, to a company or to a government agency of some kind. In all cases, there is always a cost to be borne by somebody and often that cost gets passed down to customers by those who had to fix the original breach.

Here we’re going to cover some of these consumer borne costs and show you just how data breaches on business can directly impact your pocket and we’re going to do it with the example of Target, the retail giant which suffered a breach of 40 million credit card records in the winter of 2013.

The Costs of the Target Breach

When target lost 40 million credit card records, the people affected weren’t just the employees and those 40 million customers, every single Target client was affected indirectly in some way:

The severance package of the CEO, who had to resign after the attack, alone cost 15.9 million dollars. In addition to this, over 1 billion in fines had to be negotiated or paid out to regulatory agencies for Target’s failure to properly secure their customer data. On top of that, Target suffered losses of some $443 million as a result of dealing with the mess caused by their data breach.

And finally, on top of all these costs, there were the fraudulent charges to credit cards themselves, totaling over 2.2 billion dollars.

Your average data breach in any context also carries its own average costs, costs that get multiplied hundreds of times over by numerous repeat breaches, of which there were 617 in 2013 alone. These include:

• $5 as the average cost of a notification per customer (multiply that by millions of customers across several hundred breaches)
• $30 per average card cancellation and credit monitoring per customer
• $2,000 dollars as the cost of an hourly forensic examination (also something you can multiply by thousands of hours across all companies breached)
• Half a million dollars in costs for the average business legal defense
• 1 million dollars in costs for the average single legal settlement!
• 1 million dollars in fines levered against individual companies

The total average costs of just one of the 617 breaches that happened in 2013 were about $5,403,644 and the number of breaches in 2014 is almost sure to grow further still.

Furthermore, the average breach to a business affects about 28,765 records and each of these compromised records costs $188 dollars to fix.

So How do Consumers end up with the bill?

Via Retailers:

Retailers either directly charge their customers higher prices wherever they can get away with it in order to offset credit card losses or they have their losses paid back to them by their insurance providers, who then raise premiums on fraud policies across the board, thus making all companies pay higher insurance fees and pass those costs on to their own customers. It’s inescapable to you as a consumer.

Via Credit Card Providers:

Banks and card providers have to roll back the fraudulent charges made to their cards and then reissue all those cards at a cost of $10 each. And in order to cover both cumulatively massive costs, they then charge higher average interest rates and fee rates on credit to all of their customers; increasing overall card use costs by as much as 7%.

What’s the Total Damage?

The total cost of all data breaches and their resulting fraud is enormous: In just the direct costs passed onto consumers and indirect costs of higher taxes to pay for better law enforcement, we’re talking about expenses of 140 billion per year!

Additionally, the economy also suffers from job losses of as many as 500,000 positions, especially in the high end manufacturing sectors.

Identity Theft

It’s not just the shared consumer costs that can nail all of us as a result of widespread data breaches. There’s also the issue of far too common identity theft, which is often the point of these kinds of attacks on companies. This isn’t a laughing matter either, as the numbers point out:

66% of ID theft victims are victimized financially.

Their average individual losses are over $9,600 dollars.

Only 14% of ID theft victims have to pay out of pocket costs, the banks and card companies pay the expenses of the res but, as we covered above, pass those costs on to everyone else.

10% of ID theft victims spend at least a month resolving their fraud problems, which is an enormous drain on the labor and productivity of society in general.

As you can see, the costs of Data breaches are massive and extremely far reaching. For more details on how they can affect you, visit the website of data security firm Authentify and check out their infographic on the issue.