Target Announces Settlement Agreement with MasterCard; Estimated Costs Already Reflected in Previously Reported Results
April 15 2015 - 5:30PM
Business Wire
Target Corporation (NYSE: TGT) today announced that it has
entered into a Settlement Agreement with MasterCard International
Incorporated relative to the data breach that Target experienced
during the fourth quarter of 2013.
Under the agreement, alternative recovery offers will be made by
MasterCard to eligible MasterCard issuers worldwide that issued
MasterCard-branded payment cards claimed to have been affected by
the data breach, and MasterCard will recommend that such eligible
issuers accept their offers.
Target has agreed to fund up to $19 million pre-tax in
alternative recovery payments, depending on the extent of eligible
issuer acceptances. The settlement is conditioned on issuers of at
least 90% of the eligible MasterCard accounts accepting their
alternative recovery offers, either directly or through their
sponsoring issuers, by May 20, 2015. The estimated costs of this
settlement are already reflected in the data breach liabilities
that Target established during fiscal 2013 and 2014.
Scott Kennedy, President, Financial & Retail Services at
Target, stated “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.”
Assuming that all conditions to consummation of the settlement
have been satisfied, accepting issuers will be paid by the end of
the second quarter of 2015. Each accepting eligible issuer will, on
behalf of itself and any affiliated or sponsored issuer of such
eligible issuer on whose behalf the eligible issuer accepts an
offer, release and indemnify Target and its acquiring banks with
respect to any claims that such eligible issuer and affiliated and
sponsored issuers may have with respect to the data breach,
including but not limited to any claims in the putative class
actions relating to the data breach that are pending in federal
court.
All eligible issuers will soon receive notification from
MasterCard will full details of the Settlement Agreement and how to
accept their alternative recovery offers before the offers
expire.
About TargetMinneapolis-based Target Corporation (NYSE:
TGT) serves guests at 1,795 stores and at Target.com. Since 1946,
Target has given 5 percent of its profit to communities, that
giving equals more than $4 million a week. For more information,
visit Target.com/Pressroom. For a behind-the-scenes look at Target,
visit Target.com/abullseyeview or follow @TargetNews on
Twitter.
Target CorporationMedia Contact:Dustee Jenkins,
612-696-3400orInvestor Contact:John Hulbert,
612-761-6627
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