Target settles with Visa for $67 million over 2013 data breach

News broke this week that Visa, Inc., and Target Corporation have reached a settlement deal relating to Target’s 2013 data breach that would send $67 million back to card issuers affected by fraudulent charges and necessary payment card replacement.

The deal more than triples an earlier settlement valued at $19 million that was rejected by card issuers.

A Visa spokesperson told Advisen via email, “Visa has worked to help Target reach a resolution for the expenses incurred by financial institutions as result of the 2013 compromise. Nevertheless, the fact remains that data breaches are an unfortunate situation for all parties involved – especially consumers. This agreement attempts to put this event behind us, and increase the industry’s focus on protecting against future compromises with new technologies.”

The settlement may reflect recent concerns about confidentiality in the class action litigation with financial institutions. This month, plaintiffs in the case being considered in the United States District Court in Minnesota sought to have certain documents unsealed and added to the quest for class certification – documents Target felt should be kept confidential. The Court referred to a “veritable treasure trove of information contained in the Information Security Documents and citations thereto, which include detailed information about Target’s IT infrastructure, Target’s information security controls, and information about Target’s information security policies and procedures.”

According to Molly Snyder, spokesperson for Target, the costs of the settlement have already been reflected in Target’s financial results for 2013 and 2014.

“Target is pleased that we have reached a settlement agreement with Visa related to the data breach we experienced during the fourth quarter of 2013,” Snyder said. “The agreement is conditioned on a subset of issuers – representing the majority of the Visa cards that Visa determined were at risk as a result of the breach – having entered into direct settlements with Target and Visa. On August 17, Visa certified that the required subset of issuers had entered into settlements for the agreement to become effective. As a result, offers are being extended to the remaining group of eligible Visa issuers using a settlement formula that would enable them to achieve the same economics as the Visa issuers that have already settled with Target and Visa.”