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The proposed $19 million settlement between MasterCard and Target over the 2013 data breach has fallen through after not enough banks accepted the deal. Under the settlement announced last month, Target agreed to set aside $19 million for banks and credit unions that had issued MasterCards that were affected by breach. Banks and credit unions that accepted the deal would have been able to use the money to cover operating costs and fraud-related losses stemming from the breach. But the settlement needed 90% of the card issuers to accept the offer by May 20 in order for it to go into effect.
Both MasterCard and Target confirmed this week that not enough banks and credit unions accepted the offer by the deadline, thereby voiding the settlement. This means that MasterCard-issuing banks and credit unions no longer have the option to accept a portion of the proposed $19 million settlement pool to settle their claims against Target. As a result, all of their claims continue to be the subject of the consolidated class action pending in federal court in Minnesota. It is not known right now whether Target and MasterCard will go back to the drawing board to craft a new settlement, or if Target will abandon its attempt to obtain a private settlement and instead try to resolve the MasterCard claims through the pending federal court lawsuit.