MasterCard has reached a settlement with Heartland Payment Systems to resolve claims by MasterCard and its issuers in connection with Heartland's previously announced data security breach.
The settlement agreement calls for Heartland to fund up to $41.4m of ‘alternative recovery offers’ to be made to eligible MasterCard card issuers to settle their claims for operational costs and fraud losses alleged to have been incurred by them as a result of the breach.
Under the terms of the settlement, MasterCard card issuers that filed claims for reimbursement of operational expenses or to recover fraud losses on certain accounts processed by Heartland during 2008 will be eligible to receive a specified dollar payment with receipt expected during the third calendar quarter of 2010, if they choose to accept their offers.
Wendy Murdock, chief franchise officer for MasterCard, said: “We feel that this settlement represents an appropriate and fair resolution for our issuing financial institution customers and will enable them to avoid uncertainties and delays associated with potentially protracted litigation.”