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SettlementCritical RiskMultistate

Multi-State AGs Secure $18.5M Settlement from Target Over 2013 Data Breach

Target Corp.May 23, 2017New Jersey Attorney General

Penalty Amount

$18,500,000

Consumers Affected

41,000,000

Summary

Target Corp. agreed to pay $18.5 million to resolve a multi-state investigation into the November 2013 data breach that compromised payment card information of over 41 million shoppers. The settlement requires Target to implement comprehensive cybersecurity reforms, including a dedicated Information Security Program, encryption, network segmentation, and third-party assessments.

Remedy

Target must pay $18.5 million, establish an Information Security Program led by a dedicated officer, encrypt consumer payment card data, segment its cardholder data environment, ensure vendor compliance with security standards, adopt chip-and-PIN technology, implement password rotation and two-factor authentication, and undergo a third-party Information Security Assessment with reports available to states.

Monetary PenaltyInjunctionCompliance ProgramAudit Requirement

Contract Impact

In-house legal teams should prioritize reviewing vendor agreements for clauses governing third-party security controls, credential management, and audit rights, as the breach stemmed from compromised vendor credentials. Customer agreements must be examined for data security warranties, breach notification timelines, and limitations of liability related to payment card information. Key clauses to scrutinize include data security requirements, vendor oversight provisions, encryption standards, network segmentation obligations, and incident response plans. Revisions may be necessary to mandate a dedicated Information Security Program with C-suite accountability, require regular third-party security assessments, enforce encryption and segmentation of stored data, and establish mandatory board-level reporting on cybersecurity risks.

Contract Search Terms

Information Security Programencryptionnetwork segmentationthird-party assessmentsvendor managementdata breach notificationexecutive oversightboard reportingdata retention schedulepayment card data security

Violation Types

Entity Details

Entity

Target Corp.

Also known as: Target

Industry

Retail

Multistate Coalition

Official Sources

Source Evidence

Entity Name
"Target Corp."
Fine Amount
"Target’s $18.5 million settlement payout"
Violation Types
"The November 2013 cyber-intrusion was carried out by attackers using credentials stolen from a third-party Target vendor. The States’ investigation found that the stolen credentials were used to exploit numerous security vulnerabilities within Target’s data storage network, allowing the attackers to access a customer data base and install malware on Target’s system that captured payment card information."

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