MINNEAPOLIS (12/3/15)--The U.S. District Court of Minnesota gave preliminary approval Wednesday to the $39 million proposed settlement reached between Target Corp. and the credit unions and other financial institutions that sued the retailer for its role in the massive 2013 data breach.
A final approval hearing has been scheduled for May 10, 2016, to determine whether the settlement should be approved as fair, reasonable and adequate. Additionally, within 20 days of this order, the settlement administration must send notice of the deal to all members of the settlement class for which it has an address.
A website also will be created for class members that will list the terms of the settlement, member rights, dates and deadlines, and a toll-free telephone number that members can call to obtain further information.
According to an announcement by financial institution counsel Wednesday, the settlement payment of up to $39,357,939.38 will include:
A CUNA investigation found that credit unions incurred more than $30.6 million in costs related to the breach, and it continues to press lawmakers to pass legislation that would require merchants to uphold stronger data security standards.
If approved, the settlement will become the first class-wide data breach deal reached on behalf of financial institutions, according to the press release. It also said the settlement would apply to all U.S. financial institutions that issued payment cards identified as compromised as a result of the data breach at Target.
However, financial institutions that previously released claims against the retailers by participating in a settlement deal offered by Visa or MasterCard would not be included in the settlement.
“This settlement is a strong and important result for those financial institutions that sustained losses as a result of the Target data breach, providing compensation well beyond what the card brand networks offered,” said co-lead plaintiffs’ counsel Charles Zimmerman of Zimmerman Reed PLLP and Karl Cambronne of Chestnut Cambronne PA. “It also sets an important precedent that financial institutions should not always have to bear the burden of extensive costs related to merchant data breaches over which they have no control.”
Once the settlement is final, eligible financial institutions will be able to submit a claim form to receive a cash payment, which will be in addition to funds already received through Visa’s Global Compromised Account Recovery (GCAR) program, MasterCard’s ADC program or any other card brand reimbursement program.
Class members will receive the official court-authorized notice and claim forms by mail, or through the settlement website. Payments to settlement class members will be made after the court approves the settlement and all appeals have been completed.