Target settles claims over 2013 data breach

The company has unveiled it is also working on a similar deal with MasterCard. The agreements would cover credit cards and debit cards issued by thousands of financial institutions under the Visa and MasterCard brands.

Discussions with MasterCard come after issuers unexpectedly rejected a USD 19 million settlement that Target had negotiated with MasterCard. That deal, reached in April 2015, required the approval of 90% of banks representing cardholder accounts that were affected by the breach.

Card issuers have long complained about the process by which they are reimbursed for data breaches and the fraud that results from them. They say that the reimbursement doesnt begin to cover the costs associated with issuing new cards and adding more call-center staff to handle customer questions.

The exact amount of fraud that resulted from the Target breach is still unknown. Trade groups representing community banks and credit unions estimate that they spent more than USD 350 million to reissue credit and debit cards and deal with other issues tied to the Target breach and the subsequent Home Depot hack.