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CU System
Heartland settlement offer to CUs expires Friday
WASHINGTON (1/27/10)--Credit unions have until 5 p.m. PT Friday to accept the joint Visa Inc./Heartland Payment Systems data breach settlement offer sent out Jan. 14, reminds the Credit Union National Association (CUNA). CUNA staff met Tuesday with representatives of Visa to discuss the joint settlement, which stemmed from efforts to recoup losses and costs incurred when financial institutions, including credit unions, reissued thousands of consumers' debit and credit cards compromised during Heartland's 2008 data breach. Issuing financial institutions can access the offer by using the Visa link. Credit unions with questions can call 888-847-2488, email esupport@visa.com with general questions, or contact their Visa account executive. The companies announced the maximum $60 million settlement in which Visa-branded credit and debit card issuers may recover losses earlier this month (News Now Jan. 11). The agreement is contingent on acceptance by financial institutions representing 80% of the eligible issuers' U.S. accounts that Visa considered as under risk of being comprised. The general industry buzz is that it's likely that the 80% threshold will be met. Participation in the settlement program supplants any other recoveries that may be available to issuers through Visa and requires accepting issuers to release Heartland, its sponsoring bank acquirers and Visa from any liability--legal or financial--related to the Heartland intrusion. The settlement offer has brought a complaint filed against Heartland's acquiring banks by attorneys appointed by the court to represent the proposed class of Visa issuers against Heartland in a pending class action lawsuit in Houston (News Now Jan. 21). The attorneys say the proposed Visa/Heartland settlement has four weaknesses:
* It may offer little compensation to payment card issuers; * It gives credit unions and banks little time to decide whether to participate; * It releases Heartland and other parties (the acquiring banks) from liability; and * It is being touted for reasons that "are not entirely accurate."
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