Target Corp. has announced that it entered into a settlement agreement with MasterCard International Inc. relative to the data breach that the retailer experienced during the 2013 fourth quarter.
As part of the agreement, MasterCard will make alternative recovery offers to eligible issuers worldwide that issued MasterCard-branded payment cards that claims said were affected by the data breach, and MasterCard will recommend that such eligible issuers accept their offers, Target asserted.
Target has agreed to fund up to $19 million pre-tax in alternative recovery payments under terms of the agreement, depending on the extent of eligible issuer acceptances. The settlement is conditioned on issuers of at least 90% of the eligible MasterCard accounts accepting the alternative recovery offers, either directly or through their sponsoring issuers, by May 20, Target stated. The data breach liabilities that Target established during fiscal 2013 and 2014 already reflect the estimated costs of the settlement, said Target.
Scott Kennedy, Target president, financial and retail services said, “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.”