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Target settles with states over data breach

$18.5M settlement largest multistate award

Jon Springer, Executive Editor

May 24, 2017

1 Min Read
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Scott Olson/Getty Images

Target Corp. on Tuesday said it has reached an $18.5 million settlement with 47 states the over the 2013 data breach that exposed payment data of more than 41 million of its customers and contact information for 60 million shoppers.

The agreement represents the largest multistate data breach settlement achieved to date, according to New York Attorney General Eric T. Schneiderman.

The states' investigation — led by the Attorneys General of Connecticut and Illinois — found that in November of 2013, hackers accessed Target's gateway server through credentials stolen from a third-party vendor. The credentials were then used to exploit weaknesses in Target's system, which allowed the attackers to access a customer service database and to install malware on the system that was used to capture consumer data, including full names, telephone numbers, email and mailing addresses, payment card numbers, expiration dates, CVV1 codes, and encrypted debit PINs.

Target announced the breach in December of that year. The event forced Target to overhaul its data security and was said to be a factor in the departure of then-CEO Gregg Steinhafel, who resigned in May of 2014.

In addition to the monetary payment to the states, the settlement agreement requires Target to develop maintain a comprehensive information security program and to employ an executive or officer who is responsible for executing the plan. The company is required to hire an independent, qualified third party to conduct a comprehensive security assessment.

Consumers will get no proceeds from the settlement announced Wednesday, although Target is reportedly in the process of a $10 million settlement in a consumer class-action lawsuit connected to the breach. The retailer separately paid out $39.4 million in 2015 to banks and credit unions affected by the breach.

About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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