Dozens of credit unions are walking away from the $60 million payment Visa issuers will get for the costs they incurred for the massive credit card breach at Heartland Payments System.
"My clients will continue to pursue their rights in litigation," said Houston attorney Michael Caddell, who is representing more than 50 credit unions and banks affected by the huge breach.
Heartland and Visa last week announced institutions representing 97% of the cards breached voted to accept the settlement and agreed not to pursue litigation.
But Caddell said the settlement, similar to the 2008 settlement in the TJX breach, amounts to pennies on the dollar for costs incurred to notify affected cardholders, block and reissue cards. He said the 97% figure provided by Heartland and Visa represents the biggest card issuers in the country and hundreds of institutions have opted out of the settlement.
"And remember, that’s just for the Visa issuers. There still hasn’t been any settlement for MasterCard issuers affected by the Heartland case," Caddell told The Credit Union Journal Friday.
Heartland earlier agreed to pay issuers of American Express $3.6 million for their costs.
The credit union plaintiffs in the case include: Pennsylvania State Employees CU, Alabama Rural Electric FCU, GECU, Matadors Community CU, Community West CU, First Castle FCU, Gulf Winds FCU, MIDFLORIDA FCU, and PBC CU.
The Heartland and TJX cases are closely related because they were among as many as a dozen major breaches at large retailers perpetrated by a young hacker named Albert Gonzalez, a one-time U.S. government enforcement agent. Gonzalez and his accomplices also hacked into computer networks at Barnes & Noble, Sports Authority, Hannaford Bros., OfficeMax, Boston Market, DSW, BJ Wholesale Club, as well as Heartland and TJX. The group sold credit card information over the Internet to individuals all over the world, who used it to create their own counterfeit cards, which were used to buy merchandise and withdraw cash from the hacked accounts.
