The big data breach that affected Target in 2013 is still hurting the company, this time to the tune of $67 million. The retailer has struck a deal with financial institutions that were affected by the breach; the settlement is made with Visa on behalf of those institutions, and a deal akin to this one is said to be the works with MasterCard. The data breach, which unfortunately happened during the holiday shopping season, left about 40 million MasterCard and Visa credit and debit cards exposed to fraud — it was one of the worst security lapses affecting a big-name retailer in years.
The $67 million Target will pay as part of the agreement will help cover the costs that banks were hit with as a result of the security breach. According to the Wall Street Journal, trade groups on behalf of credit unions and some community banks spent in excessive of $350 million having to reissues cards and patch up other troubles that surfaced as a result of the breach, and the Home Depot breach that followed.
Both Visa and Target have confirmed that a deal is in place, but they have not announced the terms of the deal, says WSJ. Some of Visa’s biggest card issuers are said to be in support of the deal. The smaller card issuers are said to have been notified about the deal today, including details on how much compensation they will receive.
The WSJ says sources have revealed Target’s payment covers the max amount stipulated by Visa’s regulations. In addition to it, Target is said to be offering issuers reimbursement for fraud resulting from the applicable transactions…if those issuers don’t proceed to sue Target. According to Target, meanwhile, the cost of this settlement has already been covered by its previous years’ financial results.
Hit up the timeline below for more details on the Target breach!
SOURCE: Wall Street Journal