Retail giant Target is paying $39.4 million in order to satisfy claims that banks and credit unions suffered damages in the wake of a 2013 data breach.
News of the settlement agreement came on Wednesday (Dec. 2), Reuters reported, which noted that the agreement seeks to put to rest class action claims against the firm that there had been charges tied to fraud and also costs stemming from the need to issue millions of new debit and credit cards in the wake of the breach.
As has been widely reported, Target said that the breach led to more than 40 million credit cards being compromised and that many more people — perhaps 110 million in total — had personal information stolen. That compromised information included phone numbers and also email addresses.
As part of the settlement, Target will pay $20 million to a group of banks and credit unions and another $19 million to satisfy claims by MasterCard issuers. The agreement extends to cover all the parties that had cards compromised in the breach and that had not been covered by previous settlements. Those previous settlements included the agreement that was approved last month by a court wherein Target said it would pay Visa card issuers roughly $67 million, with a separate $10 million settlement with consumers.
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In another case, Target had reached a settlement with MasterCard back in April, but it was voted down in May when the card issuers said the settlement amount was not sufficient.
In the most recent pact, preliminary approval has been given by U.S. District Judge Paul Magnuson, who issued a statement from his bench in St. Paul, Minnesota, that the settlement is “fair, reasonable and adequate,” and a final hearing has been approved and scheduled for May 2016.
In November, the retailer said that it has spent as much as $290 million on activities addressing the breach, while insurers will reimburse it as much as $90 million. There are still other probes outstanding.