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Most MasterCard issuers OK Heartland branch settlement
PURCHASE, N.Y. (7/20/10)--More than 99% of MasterCard's issuers eligible for compensation from a data breach settlement with Heartland Payment Systems Inc. have approved the settlement agreement, said the card company Thursday. The $41.1 million settlement announced in May was related to a breach, disclosed in January 2009 but occurring the previous year, that exposed 130 million credit and debit cards. It was the largest breach in history and affected thousands of credit union members as well as consumers. (News Now May 21). The companies needed 80% of eligible MasterCard issuers to agree to accept an alternative recovery offer as part of the approval of the settlement. In January, Heartland agreed to pay up to $60 million to issuers of Visa-branded credit and debit cards (News Now Jan. 11). Earlier it entered settlements of $3.6 million with American Express and $2.4 million in a consumer cardholder class action suit (News Now Dec. 21 and Dec. 29). The MasterCard and Visa settlements require card issuers to waive rights to any other recovery for claims of losses related to the breach and its sponsoring bank acquirers through litigation and other remedies. When the settlement terms were announced in both the Visa and MasterCard cases, attorneys for a small group of credit unions and banks had indicated the settlement amounted to pennies on the dollar.
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