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Remember those lawyers up in arms over Target's proposed $19M settlement with MasterCard over the retailer's massive 2013 data breach? Well it looks like a good day for them.
The companies had a 90% participation threshold in order to certify the settlement and a May 20 deadline to meet it. The deadline passed without the required participation, so now the settlement is on hold and could be voided.
So what does this mean for the consumers and the banks involved?
Target already settled a class action lawsuit with affected customers for $10M. (We think -- a judge has granted preliminary approval of the deal.) That settlement was compensation for a data breach that saw up to 40 million credit and debit card numbers, along with the personal information of 61 million people, stolen during the height of the 2013 holiday shopping season.
Target's proposed settlement with MasterCard was supposed to cover the costs to banks and payment card issuers who had to re-issue cards as well as pay restitution for fraudulent charges. Attorneys for other financial institutions argued the $19M figure would've ended Target's legal liability for pennies on the dollar, and are pleased the settlement fell through.
Target On Their Back
Most consumers won't be affected by this settlement delay. Target's settlement with customers has been approved and the company has set up a website for shoppers to file a claim if their personal information was compromised. Customers unhappy with that settlement could opt out and file their own lawsuits.
As for Target, MasterCard, and other banks and issuers, the Credit Union Times notes that this setback could be just the beginning of a long process "regarding how to move forward." Any future settlement could be far more expensive for the retailing giant -- a cost it could pass on to consumers.