The Green Sheet Online Edition
April 27, 2015 • Issue 15:04:02
Target data breach price tag $252 million and counting
Remediation and legal challenges continue at Target Corp. in the costly aftermath of a December 2013 data security breach that compromised 40 million customers' credit and debit card data, as well as an estimated 70 million consumers' email and mailing addresses. Target, in a recent statement, estimated costs of the breach to exceed $252 million in fines and legal fees, with no clear end in sight.
The newest addition to a litany of filings was disclosed March 26, 2015, with preliminary approval of a $10 million settlement in a class action suit filed by Target customers with awards of up to $10,000 per person. Minnesota District Court Judge Paul A. Magnuson set a final hearing date of Nov. 10, the filing deadline for all claims and objections.
A separate ruling by Judge Magnuson in December 2014 paved the way for banks to sue Target; the ruling stated the banks were the true victims in the data breach, since most consumers are fully reimbursed by banks for fraudulent charges on their credit cards. The Judge stated that the ruling's intent was consistent with "Minnesota's policy of punishing companies that do not secure consumers' credit- and debit-card information."
Claimants must prove beyond doubt
Settlement terms dictate that claimants must provide proof of expenses and/or lost time caused by the data breach. Plaintiffs can use the settlement's web portal to submit official claim forms, which must include at least one of the following complaints to meet reimbursement eligibility requirements:
- Unauthorized charges were made on their credit or debit cards that were not reimbursed.
- Time was lost when they had to deal with unauthorized charges.
- Legal counsel or an identity protection specialist was hired to rectify credit reports or to help restore credit worthiness.
- Late fees or higher interest rates were assessed on the cardholder's account due to unusual account activity.
- The account was frozen, closed, or access to funds was blocked or restricted.
- Additional fees were paid on payment card accounts.
After the initial large payouts are made to claimants, any remaining settlement funds will be evenly disbursed among participating members of the class action suit who did not submit proof of damages. Considering that 40 million people were potentially hacked, if all or even half of those affected chose to participate, the average check would amount to under a dollar per person.
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