A law firm has filed a class-action lawsuit against Target on behalf of two community banks in response to the retailer's massive data breach in late 2013.
The lawsuit is the latest salvo in the battle between retailers and banks over which should be on the hook for such data breaches.
In a letter to Congress last month, the National Retail Federation pointed a finger at banks, saying banks need to adopt more card-secure technology. In a statement today, the NRF said retailers are willing to do their part, but banks and card companies must also "take major steps to shore up the current fraud-prone payments system."
"Rather than resort to blame and shame, the parties should work together to ensure that the data breach is remedied and steps are taken to prevent and mitigate future breaches," NRF Senior Vice President and General Counsel Mallory Duncan said in a statement.
Meanwhile, banks argue that retailers should cover more of the cost of the breaches. In a document on data breaches, the American Bankers Association said, "When a retailer speaks of its customers having 'zero liability' from fraudulent transactions, it is because our nation's banks are providing that relief, not the retailer that suffered the breach."
Both groups are expected to air their views during congressional hearings about data breaches this week.
The class-action lawsuit, filed Jan. 29 by the Provost Umphrey Law Firm on behalf of the Community Bank of Texas and FNBT.com, argues that "the security breach was the direct and foreseeable result of Target's failure to implement and maintain reasonable and industry-standard security measures to protect its customers' credit card, debit card, and personal information."
This lawsuit is not the first filed against Target over the data breach. The Wall Street Journal reported last month that about 70 class-action lawsuits have been filed on behalf of affected consumers. And Putnam, Conn.-based Putnam Bank also filed its own suit against the retailer.
Expect this story to continue to play out further in the coming weeks. In the meantime, Bankrate reporter Janna Herron has tips for consumers to be vigilant about their finances so they can protect themselves from data breaches.
Who should foot the bill for the data breaches? Do you even care, as long as it's not you?
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