American Express says exposure to Target breach 'minimal'

Thu Jan 16, 2014 7:28pm EST
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By Aman Shah

(Reuters) - Credit card company American Express Co (AXP.N: Quote), which reported strong quarterly results on Thursday, said it had seen 'minimal exposure' to the data breach at Target Corp (TGT.N: Quote) stores during the U.S. holiday shopping season.

American Express said it had fraud controls in place on accounts affected in the theft, one of the biggest card breaches on record.

About 40 million credit card records and 70 million other records containing data on Target's customers were stolen in the breach disclosed in December.

"The closed-loop is a big advantage for us, especially in situations like this," Chief Financial Officer Jeff Campbell said on a post-earnings conference call, referring to the company's system of issuing its own cards in addition to processing transactions.

Earlier in the day, American Express reported a two-fold jump in fourth-quarter profit as its affluent customers spent more in the U.S. holiday season and fewer users defaulted on payments.

"We ended the year on a strong note, with card member spending up 8 percent despite mixed reports during the holiday shopping season," Chief Executive Ken Chenault said in a statement.

Concerns over debit and credit card safety have increased after Target, the third-largest U.S. retailer, disclosed the breach that lasted 19 days through December 15.

Cards on American Express's platform are seen as safer than those on Visa Inc (V.N: Quote) and Mastercard Inc (MA.N: Quote) platforms due to the 'closed loop' system.   Continued...

American Express and American Express corporate cards are pictured in Encinitas, California October 17, 2011. REUTERS/Mike Blake