Wendy's to pay $50M in data breach case

The fast food giant Wendy’s has reached an agreement to settle a lawsuit involving multiple credit unions over a data breach in 2016.

Wendy’s will contribute $50 million into a fund that would compensate financial institutions “that issued payment cards that were alerted on cards in connection with the data breach,” according to a press release from the Credit Union National Association on Wednesday. CUNA is also a plaintiff in the suit.

Wendy’s will also be required to adopt certain data security measures.

“We are pleased that Wendy’s has agreed to settle claims involving this data breach,” Jim Nussle, CUNA’s president and CEO, said in a statement. “The settlement provides a substantial financial recovery to credit unions that were harmed by the data breach.”

Jim Remington

The settlement is for the case First Choice Federal Credit Union versus the Wendy’s Co. that involved a data breach at certain locations for the franchise in 2016.

Jackson, Mich.-based American 1 Credit Union temporarily blocked all credit and debit card transactions at Wendy's locations upon receiving reports from members about alleged fraudulent activity on reissued cards. The Michigan Credit Union League urged its local congressional delegation to crack down on retailers to meet the same security measures expected of financial institutions.

Affected financial institutions will be able to file reimbursement claims without supplemental documentation. Payments will be based on the total number of alerted on cards for this breach.

Plaintiffs who sat for a deposition are eligible for another $7,500 while the remaining plaintiffs could receive $2,500, though these measures need approval from the U.S. District Court for the Western District of Pennsylvania.

There have been a number of widespread breaches at retailers and other businesses in recent years. CUNA is still a plaintiff in a class action lawsuit against Equifax for another breach that transpired during the fall of 2017. The Equifax case involved data from roughly 145 million consumers being exposed.

“We will continue to fight for recoveries on behalf of credit unions who bear the financial burden of merchant data breach costs,” Nussle said in a statement. “CUNA continues to pursue federal data security laws, making it much harder for merchants to compromise American consumer’s payment card information.”