The Minneapolis-based retailer is one step closer to the end however after it reached a $39 million settlement to repay banks that issued credit or debit cards compromised in the data breach, an email news release said Wednesday.
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The agreement still has to be approved, first at a preliminary hearing Wednesday and then at a final hearing next year.
While cardholders aren’t responsible for unauthorized purchases, lenders are on the hook to cover the cost of fraud and expense of reissuing cards when a breach occurs.
“Financial institutions should not always have to bear the burden of extensive costs related to merchant data breaches over which they have no control”, the plaintiffs’ lawyers Charles Zimmerman and Karl Cambronne said in a joint statement. While consumer class action suits filed against breached retailers have failed to gain ground, banking institutions’ right to file a class action suit against Target had been upheld by the court (see Target Breach Suit Won’t Be Dismissed and Why Target Could Owe Banks).
The company will pay banks that claim to have reimbursed for fraudulent charges, and had issued new debit and credit cards.
Hackers compromised more than 40 million payment cards used at Target during a three-week period during the 2013 holiday season. A proposed $19 million settlement with MasterCard had been rejected this past spring.
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The agreement includes a payment of up to $20.3 million to settlement class members who aren’t covered by other pacts. (NYSE:MA) program, which was linked to the breach.
