St. Paul, MNIt’s been a tough couple of years for Target Corp (Target). The retailer’s expansion into Canada failed miserably. What’s more, the massive data breach that hit the retailer in 2013 resulted in class-action lawsuits. Those data breach lawsuits appear to be on their way to being settled, after a US District Court Judge last month granted preliminary approval to a $10 million settlement.
A hearing for final approval is scheduled for November 10. The preliminary approval, however, provides a pathway for data breach plaintiffs to file for losses against the settlement fund.
Retailers and other organizations, such as Home Depot and Anthem Health, have been blindsided by data breaches after hackers blew past firewalls and other protocols aimed at protecting data, making off with sensitive information that carries significant value in the data aftermarket. Target’s data breach woes occurred in 2013, when details and data from as many as 40 million credit and debit card accounts were exposed.
A host of data breach lawsuits quickly followed, as consumers having grown to trust retailers and corporations to mind the data store and keep sensitive information safely hidden from cyber criminals, suddenly found themselves exposed. Fearing identity theft and negative impacts to their credit history, consumers sued Target in droves.
According to court documents and a report from the Associated Press (AP), the Target class-action data breach settlement, granted preliminary approval by US District Court Judge Paul Magnuson, could see claims beginning to flow by April 30. Affected consumers can claim up to $10,000 in losses provided they can properly document unreimbursed losses. Once those claims are sorted out and duly paid, the remainder of the fund will be disbursed to consumers of Target who are prepared to swear under oath any circumstance of a qualifying loss in the absence of documentation.
Those who have already been fully reimbursed for their losses are not eligible for the settlement fund.
Magnuson threw out a bouquet to Target for moving to settle the matter relatively quickly. “Target really needs to be commended for being willing to step up,” Magnuson said.
In the end, according to AP, the settlement could cost Target as much as $25 million, once legal fees and administrative costs are factored in. This comes in tandem with the shut-down of the failed Canadian expansion, and an announcement in early March that Target would cut about 3,100 jobs through the elimination of 1,400 unfilled positions and the laying off of about 1,700 employees.
Keeping sensitive data safely away from cyber criminals is becoming an increasing challenge as hackers are getting more sophisticated. To that end, the Target data breach settlement includes a provision that Target hire a chief information security officer, maintain a written information security program and provide security training to its workers. Target would also be required to maintain a process to monitor for data security events and quickly respond to such an event deemed to present a threat.
In the meantime, consumers and others concerned over the security of sensitive information, and who unwittingly become caught up in a data breach, have little recourse but to pursue compensation through the courts when a data breach rears its ugly head. With more retail commerce, and the storage and transference of sensitive data online, the continuing threat of cyber hacks and data theft suggests that data breach lawsuits will remain part of the legal landscape for an inordinate period of time.
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