Target and Visa Finalize Deal to Settle Data Breach Costs (Aug. 18, 2015)
Target Corp. has reached a deal with Visa Inc. to reimburse credit and debit card issuers for costs incurred following a massive data breach disclosed during the 2013 holiday shopping season that exposed personal data of more than 100 million consumers. Financial institutions spent more than $350 million coping with losses from the breach, including reissuing millions of credit and debit cards, some trade groups contended. The agreement was contingent on a subset of Visa issuers entering into direct settlements with Target and Visa, Target confirmed to Paybefore in a statement.
“Visa has worked to help Target reach a resolution for the expenses incurred by financial institutions as result of the 2013 compromise,” Visa said in a statement. “Nevertheless, the fact remains that data breaches are an unfortunate situation for all parties involved—especially consumers. This agreement attempts to put this event behind us, and increase the industry’s focus on protecting against future compromises with new technologies.”
In May, a separate proposed $19 million settlement deal related to the breach, between MasterCard and Target, fell through. That deal required the approval of at least 90 percent of MasterCard issuers the breach affected and most refused to accept its terms.
Target on Wednesday will announce earnings for its second fiscal quarter. The costs of the settlement are already reflected in Target’s previously reported fiscal 2013 and 2014 results, the company said.