NEW YORK – Target has proposed to pay $10 million to settle a class-action lawsuit brought against the retailer following a massive data breach in 2013.
Individuals affected by the breach could get up to a maximum of $10,000, the proposal says.
Target’s data breach in 2013 exposed details of as many as 40 million credit and debit card accounts and hurt its holiday sales that year. The company offered free credit monitoring for affected customers and overhauled its security systems.
The proposed settlement would also require Minneapolis-based Target Corp. to appoint a chief information security officer, keep a written information security program and offer security training to its workers. It would be required to maintain a process to monitor for data security events and respond to such events deemed to present a threat.
“We are pleased to see the process moving forward and look forward to its resolution,” Target spokeswoman Molly Snyder said in an emailed statement.
The company said in court documents filed in Minnesota that the funds for reimbursements will be kept in an interest bearing escrow account. Claims will mostly be submitted and processed online through a dedicated website.
The chain has worked hard to lure back customers that were hesitant to shop there after the incident. Over the 2014 holiday season, Target offered free shipping on all items. It recently announced that it was cutting its minimum online purchase to qualify for free shipping in half to $25. And on Wednesday the retailer said it will now allow returns for up to a year for its private and exclusive brands.
Target’s bounce back from a turbulent stretch including the data breach and exit from Canada has been met with optimism on Wall Street. The retailer’s stock traded above $80 for the first time Monday, reaching another in a string of all-time highs that it began to log just before the crucial holiday shopping season began in December.
Earlier this month, Target said it would lay off about 1,700 people, eliminate another 1,400 unfilled positions and cut up to $2 billion in costs. It will also focus more on technology to boost online sales growth. The latter move will involve about $1 billion aimed at beefing up business from shoppers who are more likely to shop online.
A court hearing on the proposed settlement is set for Thursday in St. Paul.