Settlement Reached in Home Depot Data Breach Lawsuit
A court has granted final approval in the settlement over the Home Depot data breach that affected 56 million credit and debit cards in 2014.
Home Depot has agreed to pay $25 million into a settlement fund for distribution through a claims process to financial institutions that have not released their legal rights.
To put this in context with other recent large-scale data breaches, the Kmart data breach of 2014 resulted in a $5.2 million settlement fund and an agreement to implement payment card data security measures for a minimum of three years.
The Target data breach of 2013 resulted in a $10 million settlement fund, of which experts speculate over how much was actually paid.
The significantly larger settlement Home Depot has agreed to in comparison to these other recent data breach settlements should inspire confidence in the strength of credit union advocacy and the justice system’s willingness to respond.
The Michigan Credit Union League (MCUL) joined the class action lawsuit in pursuit of equitable relief for Michigan credit unions, who have endured significant financial losses, and to hold retailers accountable to higher security standards.
The disbursement of the settlement fund will be administered through a two-tier system:
- Financial institutions that file a valid claim will be eligible to receive a fixed payment estimated to be $2 per compromised card without having to submit documentation of their losses and regardless of whether any compensation has already been received from another source
- In addition, financial institutions that submit proof of losses are also eligible for a supplemental award of up to 60% of their documented, uncompensated losses from the data breach
The terms of this proposed settlement were approved by all plaintiffs involved. Once the court preliminarily approves the settlement, notice will go out to financial institutions (approximately 30 days after approval) and the period for filing claims to receive cash payments under the settlement will begin. The attorneys expect the court to schedule a hearing to consider whether to finally approve the settlement in approximately four or five months from preliminary approval.
Last year, MCUL joined the class action lawsuit against Wendy’s, after their significant security lapse affected credit unions in Michigan, and we have since joined the lawsuit against Arby’s. Ideally, we need a change in federal legislation regarding how retailers are held accountable for data breaches. Until then, MCUL, alongside CUNA, will continue to be aggressively involved in future data breach lawsuits in order to protect credit unions, increase retailers’ security standards and make legislative progress.Go to main navigation