Target reached Settlement to Reimburse $20 million MasterCard Data Breach
Target Corp is about to reach a settlement with MasterCard Inc to reimburse financial institutions about $20 million for costs incurred from the retailer's massive data breach in 2013.
Target said in a statement on Wednesday that the amount under the settlement with MasterCard Inc covers costs that banks incurred to reissue credit cards and debit cards to customers as a result of the breach.
MasterCard has to coordinate with its bank and credit union partners to settle claims from the data breach. The settlement surrounds at least 90 percent of eligible credit card accounts receiving settlement offers.
The newspaper reports that the $20 million encompasses costs that banks incurred to its customers as a result of the breach, as well as some of the fraud that resulted from the exposure of customer information.
Target proclaimed that in 2013, at the minimum 40 million credit cards were maltreated by the breach during the holiday shopping season, and the attack might have resulted in the theft of personal information, such as email addresses and telephone numbers, from as many as 110 million people.
Target revealed in a recent financial filing that it has incurred $252 million of breach-related expenses.
The payout would be roughly the same as TJX Cos. paid to MasterCard issuers in 2008 for a data breach that exposed more than 100 million cards to fraud. TJX is the parent of discount retailer TJ Maxx and other chain stores.
The negotiations appeared to be eminently difficult because the Target breach was followed by a wave of other high-profile breaches, including one at Home Depot Corp. that was even larger.
During the discussions, Target representatives argued that they shouldn’t be compelled to reimburse banks for reissuing cards that would have needed to be reissued anyway due to the other breaches, according to people familiar with the negotiations.
Target reached Settlement to Reimburse $20 million MasterCard Data Breach Reviewed by neelam aftab on 6:58 AM Rating: