By Jonathan Stempel
(Reuters) -
Target Corp and Trustwave Holdings Inc, which provides credit card
security services, have been sued by two banks for "monumental" losses
they say card issuers will face because of the retailer's holiday season
data breach.
In a complaint
filed on Monday in Chicago federal court, Trustmark National Bank and
Green Bank NA accused the defendants of failing to properly secure
customer data, enabling the theft of about 40 million payment card
records plus 70 million other records, including addresses and phone
numbers.
The banks said they
lost money from alerting customers to the breach, reimbursing fraudulent
charges and reissuing cards. These losses could increase, they said, if
criminals ultimately use several million stolen cards as some analysts
project.
While the complaint
seeks unspecified damages of at least $5 million, New York-based
Trustmark and Houston-based Green Bank said losses could top $1 billion
for card issuers they hope to represent in a class action, and $18
billion for banks and retailers combined.
Target already faces dozen of lawsuits over the breach. Monday's case
may be the first to focus on Trustwave, a privately held Chicago-based
company to which the banks said Target had outsourced some data security
services.
Molly Snyder, a
Target spokeswoman, said the retailer did not discuss pending
litigation. Trustwave spokeswoman Abby Ross said that company had a
policy of not confirming its customers' identities or discussing pending
legal matters.
The data breach occurred from November 27, the big shopping day known as Black Friday, to roughly December 15.In a Tuesday report issued ahead of a U.S. Senate committee hearing on protecting consumer data from cyber attacks, Senate staffers said Target "missed a number of opportunities" to stop the breach.
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