Target settles with Visa over data breach

August 19 23:42 2015

A year and a half after an estimated 40 million credit and debit card accounts were hacked during the 2013 holiday shopping season, Target has reached a settlement with Visa. “Target is pleased that we have reached a settlement agreement with Visa related to the data breach we experienced during the fourth quarter of 2013,” the company said in a statement on Tuesday. The settlement, which was reached on Monday, is for up to $67 million, and depends on how many issuers accept the agreement, according to a person familiar with the details who was not authorized to speak publicly about the deal.target-storefront

Target settled with consumers in March in a $10 million agreement, while a $19 million settlement with MasterCard fell through earlier this year when it to failed to have enough financial institutions accept the offer. MasterCard says it has a revised offer from Target that it’s in the process of presenting to issuers for consideration. In the Visa case, Target has already received agreement from a group of issuers representing the majority of Visa cards affected.

“Visa has worked to help Target reach a resolution for the expenses incurred by financial institutions as [a] result of the 2013 compromise,” Visa said in a statement. “This agreement attempts to put this event behind us, and increase the industry’s focus on protecting against future compromises with new technologies.” One of the lead lawyers for the plaintiffs though said the settlement is not enough to cover the costs issuers incurred from the breach. “This settlement with Visa is Target’s latest effort to avoid fully reimbursing financial institutions for the losses suffered as a result of its data breach,” said Charles Zimmerman, co-lead counsel for the plaintiffs.

Visa declined to say how much Visa card issuers lost due to the breach. Target said the costs of the settlement are already reflected in its 2013 and 2014 fiscal year results. As of Jan. 31, 2015, Target had incurred $252 million in expenses related to the data breach, according to the company’s 2014 annual report.

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