After what was reportedly months of negotiations, it seems Target and MasterCard are narrowing down on a settlement that will see financial institutions reimbursed to the tune of around $20 million. The settlement is intended to reimburse FIs for the costs incurred as a result of the massive data breach that closed out 2013.
According to sources close to the matter, a deal could be announced this week, notes The Wall Street Journal.
The settlement is intended to cover the costs issuers faced because of the mass reissue the breach necessitated. The settlement is also intended to cover some of the fraud that came about because of the payment information jailbreak.
The reimbursed funds will be distributed to MasterCard issuing banks – including Citigroup, Capital One Financial and JPMorgan Chase & Co. This deal will only apply to MasterCard customers, as Visa is still involved in its own separate negotiations.
This potential settlement follows Target’s March agreement to pay out as much as $10 million in a settlement with members of a class action lawsuit resulting from the breach.
“We’ve seen the same story, but we do not comment on speculation,” MasterCard said when asked about The Journal’s report.
Negotiations have reportedly been complicated by the fact that the Target breach ended up being the first in a series of POS hacks that left consumer data up for grabs on the black market. Target has argued that, given the massive scale of breaches at other mega-retailers like Home Depot that followed the Target breach in 2014, massive card replacements would have happened in any event.
The news of the settlement was officially announced by both MasterCard and Target early evening on April 15.
“We are hopeful that Target’s agreement to pay up to $19 million to settle the claims of MasterCard and its issuers will result in a high level of issuer acceptance. Target intends to continue to defend itself vigorously against any assessments made by MasterCard on behalf of MasterCard issuers that do not accept their offers,” Scott Kennedy, President, Financial & Retail Services at Target, said in a news release.
Target has agreed to pay the amount by May 20.
“We believe this settlement provides our issuers a reasonable resolution of the Target data breach event,” Eileen Simon, chief franchise integrity officer at MasterCard, said in a news release. “The timely reimbursement of costs and losses under the agreement delivers MasterCard issuers a faster and more certain resolution to the event, while reinforcing our commitment to maintain the integrity of industry security standards.”