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Edition: U.S. Article Comments (0) Follow Reuters Facebook Twitter RSS YouTube Read Japan says may extend nuclear evacuations | 2:21am EDT China tells U.S. to quit as human rights judge 10 Apr 2011 Texas wildfires destroy homes, buildings 10 Apr 2011 Gaddafi accepts peace plan but rebels say he must go | 3:40am EDT U.S. gallon of gas jumps to $3.76, could see $4-survey 10 Apr 2011 Discussed 131 Reid says Republicans want shutdown to close clinics 124 U.S. to reach debt limit by May 16: Geithner 113 Obama, Congress struggle to find budget deal Watched African Union leaders meet with Gaddafi Sun, Apr 10 2011 Wall St. dominated by oil swing Fri, Apr 8 2011 Rebels near Brega, Gaddafi on tv Sat, Apr 9 2011 Analysis: Alliance Data may face high Epsilon breach costs Tweet Share this By Ross Kerber and Brenton Cordeiro BOSTON/BANGALORE (Reuters) - Alliance Data Systems Corp could face costs and lost sales of $100 million or more as it tries to recover after hackers stole reams of names and email addresses from its Epsilon... Email Print Related News WRAPUP 5-U.S. retailers surprise with March sales strength Thu, Apr 7 2011 As boomers age, a soul-searching budget battle Thu, Apr 7 2011 Verizon customers exposed in massive U.S. data breach Wed, Apr 6 2011 Analysis: Data breach shows new "spear-phishing" risk Tue, Apr 5 2011 US data breach hits Target, Marriott customers Tue, Apr 5 2011 Analysis & Opinion Tech wrap: Wozniak open to active role at Apple BP should be back on bid alert Related Topics Technology » Stocks A woman uses a computer in the lounge area of the 27th Chaos Communication Congress (27C3) in Berlin, December 27, 2010. Credit: Reuters/Thomas Peter By Ross Kerber and Brenton Cordeiro BOSTON/BANGALORE | Mon Apr 11, 2011 3:24am EDT BOSTON/BANGALORE (Reuters) - Alliance Data Systems Corp could face costs and lost sales of $100 million or more as it tries to recover after hackers stole reams of names and email addresses from its Epsilon marketing unit. The estimate by technology analysts is slightly less than 4 percent of the Dallas company's revenue last year, but it underscores the rising threat from hackers and comes as Washington considers imposing tougher data-security rules. The figure is also much higher than the direct costs financial analysts expect Alliance Data to pay for measures such as system upgrades and audits, showing how complex quantifying data security expenses can be. Alliance Data first disclosed the breach on April 1, followed by a wave of customer notifications from Epsilon clients, including Citigroup Inc and JPMorgan Chase & Co. Alliance Data has said the breach will have a minimal impact on its finances, without giving many specifics. It says its biggest risk is the potential loss of clients. TD Ameritrade Holding Corp, said on Friday it has temporarily stopped using Epsilon to send emails to customers, at least until it learns more about the breach. "We felt it prudent," spokeswoman Kim Hillyer said. Several technology experts interviewed by Reuters based their estimates on past breaches, such as the roughly $160 million Massachusetts retailer TJX Cos Inc spent after thieves stole millions of payment-card numbers. The records stolen from Epsilon involved only names and email addresses, which are less valuable and will not require expensive steps such as the re-issuance of consumer credit cards. But other costs will resemble past cases and include new security software and technology audits, said Josh Shaul, Chief Technology Officer of Application Security in Massachusetts. "When you add it all up, this one isn't going to be cheap," Shaul added. 40 BILLION E-MAILS Shaul said the scale of the Epsilon breach could far exceed previous cases. Epsilon sends more than 40 billion emails a year. Security site threatpost.com counts over 50 companies that have notified customers of the breach, including Best Buy Co Inc. Michigan data-security consultant Larry Ponemon estimates Alliance Data faces a cost of at least $20 per compromised record, including lost future business. Ponemon and other analysts say a conservative estimate is that thieves obtained the names or email addresses of 100,000 customers at each of 50 clients. At $20 per record, that amounts to $100 million. That estimate is cautious another way. In a widely followed study released in March, Ponemon calculated the average cost of U.S. breaches at $214 per record in 2010, up from $204 in 2009, reflecting that many include financial data. 1 2 Next Technology Tweet this Share this Link this Digg this Email Reprints We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. 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