Wednesday, April 29, 2015

Target Proposes Settlement With MasterCard

Target has agreed to pay MasterCard-issuing banks and credit unions as much as $19 million to reimburse for losses related to the Holliday season 2013 hack that resulted in up to 40 million accounts being breached. For more information on data breach, see my previous blog postings.
The settlement covers the costs of reissuing credit and debit cards after the breach, as well as fraudulent charges on those cards. In order for the agreement to proceed, at least 90% of eligible MasterCard issuers must acquiesce to the settlement. The deadline to accept the offer is May 20th.
Target disclosed in a recent financial filing that it has incurred $252 million of breach-related expenses.
Last month, Target also settled a class-action lawsuit with individual cardholders for $10 million.
Target’s high-profile breach pushed banks, retailers and card companies to increase security by speeding the adoption of microchips in U.S. credit and debit cards. Some argue chip cards are safer, because unlike magnetic strip cards that transfer a credit card number when they are swiped at a point-of-sale terminal, chip cards use a one-time code that moves between the chip and the retailer’s register. The result is a transfer of data that is useless to anyone except the parties involved. Chip cards are also believed to be nearly impossible to copy.