Target Corporation may have agreed to pay up to $20,250,000 directly to credit unions and other card issuers as part of a settlement over its 2013 data breach, but new court documents indicated that payout could be about $2 million smaller.
According to the Minneapolis-based Dahl Administration, which is charged with managing the settlement payouts, Target will likely pay about $18.1 million to approximately 2,200 card issuers that filed claims by the March 22 deadline.
"Claims have been filed for 7,335,652 out of 10,943,226 identified eligible accounts, which is a 67% filing rate," Dahl reported to the court.
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Though the breach compromised more than 40 million cards, not all of the associated issuers made it into the class-action suit, because many had already taken previous settlement offers. According to Dahl's data review, issuers had already released claims for 76% of the compromised Visa accounts and 45% of the compromised MasterCard accounts. Overall, issuers had released 68% of the Visa and MasterCard claims.
The remaining settlement class included 6,510 card issuers representing almost 11 million compromised Visa and MasterCard accounts, according to Dahl. Those class members had two options: Take a fixed $1.50 per account, or get 60% of any unreimbursed losses they could substantiate with documentation.
About 1,700 issuers took the fixed offer, totaling about $7.4 million in payouts, according to Dahl. Another 476 issuers took the second option, garnering an estimated $10.7 million in payments.
On May 13, a Minnesota District Court judge gave the final blessing to the settlement. The court also awarded a separate $19.9 million in legal fees and expenses to the attorneys.
In an interview with CU Times in back in December, lead plaintiffs' counsel Karl Cambronne of Chestnut Cambronne PA said credit unions and other members of the class-action suit could opt out of the settlement, leaving them to sue Target on their own if they wished.
According to recent court documents, 39 unnamed issuers representing 154,138 accounts indeed opted out of the settlement as of the March 1, 2016, deadline, suggesting Target may not have seen the last of the legal action related to a breach that allegedly began when an employee at one of the retailer's refrigeration vendors opened a phishing email.
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