PURCHASE, N.Y.--(BUSINESS WIRE)--MasterCard today announced it has reached a settlement with Target Corporation to resolve claims by MasterCard and its issuers related to the retailer’s 2013 data breach.
Under the agreement, Target will make available up to $19 million in alternative recovery offers to eligible banks and credit unions across the globe. These funds will settle their claims for operational costs and fraud-related losses on MasterCard-branded cards believed by MasterCard to have been affected by the data breach. Upon accepting the offer, each issuer will release MasterCard, Target and its acquiring banks from all claims related to the data breach.
“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.”
The settlement is contingent on, among other things, issuers representing at least 90 percent of the eligible MasterCard accounts accepting their alternative recovery offers, either directly or through their sponsoring issuers, by May 20, 2015.
Issuers that choose not to accept this offer will have their claims determined by MasterCard internal processes. They may receive more or less than the amounts offered in this settlement depending on various factors, including MasterCard’s final determinations of their claims and the outcome of any litigation that Target may file to challenge claim awards to issuers outside of this settlement.
If the settlement is carried out, accepting issuers will be paid by the end of the second quarter of 2015.
Within the week, all MasterCard issuers eligible to participate in the settlement will receive details on the settlement agreement, including how to accept their alternative recovery offers.
MasterCard (NYSE:MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.