Target's Breach Saga Continues As Banks Shoot Down Settlement Agreement
By Christine Kern, contributing writer
Target’s $19 million settlement fails to get approval from affected banks and credit unions.
The long-term impact of data breaches is being clearly highlighted as Target is continuing to settle the damages from its 2014 hack. Retailers need to be paying close attention to the trials that Target is facing in this continuing saga.
Target suffered a massive data breach in late 2013 in which 110 million customer records, including 40 million credit-card numbers, were stolen. So far, no one has been charged.
Most recently, Target’s proposed $19 million settlement with MasterCard over its data breach during the 2013 holiday season has failed to get approval from the affected banks and credit unions, according to Inc. As reported by the Credit Union Times Friday (May 22), neither affected company reached the 90 percent participation rate by the May 20 deadline, and so, the site opined, “a long process” has begun.
Target provided a statement to CU Times that restated the threshold failure, adding that “Target has nothing further to share at this time.”
Card issuers rejected the settlement, arguing that the funds set aside would cover only a fraction of the lawsuits stemming from the holiday data breach. The attack was one of the largest to data and compromised 40 million credit and debit card accounts. MasterCard Inc. did not release details regarding the approval vote, and would only say that not enough issuers approved the deal. It would not reveal exactly how close it got to the 90 percent threshold.
Now, Target and MasterCard must now continue to negotiate a settlement that satisfies at least 90 percent of the affected card issuers. Lead attorneys Charles Zimmerman and Karl Cambronne said in a statement that they will continue to push for "proper compensation" for their clients.
The National Association of Federal Credit Unions also on Friday issued a statement calling for full compensation for its affected members.
“At this stage, we will continue to work to resolve the matter,” MasterCard Inc. said in a statement.