January 03, 2014

Alabama CU first to file class action against Target

Alabama State Employees Credit union, of Montgomery, last week became the first financial institution to file a class action suit against Target Corporation in the wake of its massive data security breach in November and December.

The suit seeks redress for losses involving reimbursement of members and the issuing of new checks and debit and credit cards, according to CU Journal. The $212 million-asset credit union's suit is the second class action against the corporation; a group of affected consumers sued Target on Dec. 20. The same law firm is involved in both suits.

CNBC cited NAFCU's call for retailers to take responsibility in an article on Friday, "Customers paying the price after Target breach."

NAFCU was the first financial services trade group to call on Congress to hold merchants responsible for data security breaches. Berger wrote the leaders of the House and Senate Dec. 19 seeking action. Passage of data security requirements for merchants is a key element of NAFCU's five-point plan for credit union regulatory relief.

In early December, Target confirmed that nearly 40 million credit card and debit card accounts were compromised between Nov. 27 and Dec. 15. Target later admitted that consumers' encrypted PIN data was also compromised in breach, although it maintained the data was encrypted heavily enough to still be safe.

NAFCU members are encouraged to contact the association's regulatory affairs team if they experience any regulatory issues related to the Target data breach.