A deal between retail company Target and financial services company MasterCard has been scrapped to resolve lawsuits stemming from the Target's data breach in 2013. Under the settlement, Minneapolis headquartered Target will set aside about $19 million for credit unions and banks. The breach in 2013 had compromised about 40 million credit and debit card accounts.
The money by Target will be used by banks and credit unions to cover operating costs and fraud-related losses due to the breach. The settlement needs about 90% of the issuers to agree to the offer.
According to Purchase, New York, headquartered MasterCard would only say on Friday that less than 90% issuers have approved the deal. The company will not disclose it how close it got to the 90% threshold.
In a statement, the company said that it will continue to resolve the matter. Target said that it had been notified by MasterCard of the development. The company declined to reveal anything on the matter.
Shares of Target rose about 2 cents to $79.41 in afternoon trading, while shares of MasterCard surged about 8 cents to $92.98. Lawyers for banks that filed lawsuit against Target said that the settlement by the company is an attempt to put out pending legal claims for pennies-on-the-dollar.
In a statement, Lead attorneys Charles Zimmerman and Karl Cambronne said, "We will continue to push for proper compensation for their clients". On Friday, the National Association of Federal Credit Unions issued a statement where it called for full compensation for its affected members.
The massive breach was revealed by Target in December, 2013. It happened during the peak of the holiday shopping season. After the disclosure, some shoppers started fearing for the security of their private data.