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Target settles with MasterCard over data breach

Staff writer |
Target Corporation has entered into a Settlement Agreement with MasterCard International Incorporated relative to the data breach that Target experienced during the fourth quarter of 2013.

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Under the agreement, alternative recovery offers will be made by MasterCard to eligible MasterCard issuers worldwide that issued MasterCard-branded payment cards claimed to have been affected by the data breach, and MasterCard will recommend that such eligible issuers accept their offers.

Target has agreed to fund up to $19 million pre-tax in alternative recovery payments, depending on the extent of eligible issuer acceptances. The settlement is conditioned on issuers of at least 90% of the eligible MasterCard accounts accepting their alternative recovery offers, either directly or through their sponsoring issuers, by May 20, 2015. The estimated costs of this settlement are already reflected in the data breach liabilities that Target established during fiscal 2013 and 2014.

Scott Kennedy, President, Financial & Retail Services at Target, stated “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.”

All eligible issuers will soon receive notification from MasterCard will full details of the Settlement Agreement and how to accept their alternative recovery offers before the offers expire.


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