Target reaches $19 million settlement with MasterCard

In a statement on its website, Target Corporation announced that it has agreed to a $19 million settlement with MasterCard International Incorporated to reimburse the card issuer for costs related to the retailer’s 2013 data breach.

The alternative recovery settlement, which hasn’t been submitted to the court for approval yet, must be approved by 90 percent of the eligible issuers of MasterCard-branded payment cards, according to Target.

Scott Kennedy, president of financial and retail services at Target, commented, “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.”

Target noted in the statement that the financial obligations for the deal have already been reflected in the store chain’s previously established data breach costs. By accepting the settlement, card issuers would agree to relinquish any other claims against Target for operational costs of reissuing cards and refunding customers affected by fraudulent charges.

“We believe this settlement provides our issuers a reasonable resolution of the Target data breach event,” said Eileen Simon, chief franchise integrity officer, MasterCard. “The timely reimbursement of costs and losses under the agreement delivers MasterCard issuers a faster and more certain resolution to the event, while reinforcing our commitment to maintain the integrity of industry security standards.”

If all conditions of the settlement are met, the two corporations predicted that payment could be issued to all eligible issuers by the end of the second quarter of 2015.