Target to pay nearly $40M to banks over data breach

Target Corp. has tentatively reached another milestone in its continuing efforts to remediate financial losses caused by its massive 2013 data breach.

According to multiple media reports, Target has reached a settlement with MasterCard Inc. and a number of issuing banks. In papers filed in federal court in Minneapolis, Target said it would reimburse a total of $39 million in the settlement. That figure would include about $20 million for issuing banks not covered in other class action suits against Target and about $19 million to the MasterCard Account Data Compromise program.

The settlement needs to be approved by the court. Preliminary hearings are scheduled to begin Wednesday, Dec. 10, with a final ruling sometime in 2016. A preliminary $19 million settlement with

MasterCard was rejected by issuing banks and credit unions in May of this year. Target also reached an approved $67 million settlement related to the breach with Visa and issuing banks in August 2015.

Target’s data breach, which exposed financial data of as many as 40 million customers, has proven costly for the retailer. The discounter recently estimated it has spent $290 million in breach reimbursements, with insurers expected to reimburse $90 million.

And in addition to the Visa and MasterCard settlements, Target still has pending settlements with two other major payment card networks and also reached an approved $10 million settlement of a class action consumer suit. A lawsuit in Canada was dismissed but is being appealed. Other steps the retailer has taken include installing EMV-compliant payment card readers in all stores.