Target facing bigger data breach payout as banks reject $19M settlement - Bring Me The News

Target facing bigger data breach payout as banks reject $19M settlement

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And the Target data breach saga rumbles on.

Banks and credit unions blocked a proposed $19 million out-of-court settlement agreement between the Minneapolis-based retailer and MasterCard to cover costs associated with the 2013 breach.

The settlement was earmarked for banks to recoup millions of dollars they incurred replacing credit and debit cards compromised in the breach, and to cover fraud-related charges, the Star Tribune reports.

But the offer was dependent on 90 percent of the card issuers signing off on the offer by Wednesday – which didn't happen, as banks push for full compensation for their costs, the newspaper notes.

It means a possible bigger payout for Target down the line, with the lead lawyers from the banks telling USA Today MasterCard lost an estimated $160 million in the breach, of which $88 million was to re-issue cards and $79 million to cover fraud costs.

The $19 million offer, they say, represented "pennies on the dollar" for the affected banks, The Associated Press reports, while the National Association of Federal Credit Unions also called for full reimbursement.

"We are pleased that financial institutions have resoundingly rejected Target and MasterCard's attempt to avoid fully reimbursing the losses suffered during one of the largest data breaches in U.S. history," attorneys Charles Zimmerman and Karl Cambronne told USA Today.

The breach, which was revealed during the winter shopping season in 2013, resulted in 40 million payment cards being compromised.

The Pioneer Press reports both Target and bank representatives will be back in court in St. Paul to discuss how a class-action lawsuit will proceed, with a trial data set for next year.

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