Target Reaches $19 Million Settlement with MasterCard Over Breach

   By Lisa Beilfuss 
 

Target Corp. said Wednesday that it reached a settlement with MasterCard International Inc. to reimburse financial institutions for costs they incurred from the retailer's 2013 data breach that compromised 40 million credit and debit card accounts.

Under the settlement, which follows months of negotiations and confirms a Wall Street Journal report late Tuesday, Target has agreed to fund up to $19 million in recovery payments to issuers including Citigroup and Capital One. The agreement is conditioned upon issuers of at least 90% of the eligible MasterCard accounts accepting reimbursements, either directly or through their sponsoring issuers, by May 20.

"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," said Scott Kennedy, Target's president of financial and retail services.

Issuers will be repaid by the end of July for costs that stemmed from the reissuance of credit and debit cards as well as from some of the fraud that resulted from the stolen customer information.

The company said the estimated costs of the settlement are reflected in the data breach liabilities that Target established during fiscal 2013 and 2014.

As the Journal earlier reported, the retailer is holding similar negotiations, according to people familiar with the matter, with Visa Inc., which is larger than MasterCard.

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