Target Reached a Settlement with MasterCard Issuers for $39.4 Million

December 4, 2024 by
Target Reached a Settlement with MasterCard Issuers for $39.4 Million

After settling Visa card issuer claims in August, Target has taken another step closer to resolving its 2013 data breach issues claims by agreeing to pay $39 million to banks and credit unions.

Out of the $39.4 million, $20.25 million will be paid to banks and credit unions, where the remaining $19.11 million will be paid to reimburse MasterCard issuers. It’s worth noting that Target agreed to pay $67 million Visa card issuers.

Paul Magnuson, the U.S. District Judge in St. Paul, Minnesota reported to have preliminarily approved the settlement offer. Commenting on the settlement offer from Target, he said the offer is “fair, reasonable and adequate.” However, the final approval hearing will is scheduled on May 2016.

So far, Target has paid $290 million to various claimants in settlements and legal fees due to the breach.

Back in April 2015, Target reached an agreement with MasterCard Inc but a month later card issuer rejected the deal, claiming the agreed amount was too small to make up for the losses they suffered due to target’s inadequate security measures to prevent the data breach.

The 2013 data breach compromised around 40 million credit and debit cards. Several media reports claimed later that around 110 million personal records were also stolen that contained email address and phone numbers. However, Target officially claims that only 70 million people lost their personal data due to the event.

In response, Target has taken a number of steps to secure personal data of its customers. Target was the first major US retailer to start accepting chip-based cards.

Target filled the settlement on Wednesday in response to the class action claims from banking institutions and other lenders who held Target guilty. The claimants stated in the class action that due to the Target data breach, they had to reimburse fraudulent charges and issue new credit and debit cards.

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