MONTGOMERY, Ala. — Alabama State Employees Credit Union has filed what appears to be the first class action lawsuit by a financial services company against Target Corp. over costs from the massive card security data breach.
The suit, filed Monday in an Alabama federal court, seeks compensation for financial losses resulting from defrauded deposits of financial institution members and customers, as well as costs associated with closing accounts, reissuing new checks, debit cards and credit cards as a result of Target's data breach.
"Credit unions will stand in the shoes of all the financial institutions that have incurred losses," Wilson Daniel Miles III, an attorney at Beasley Allen Crown Methvin Portis & Miles PC, the Montgomery, Ala.-based law firm that is representing ASECU in the case, told Credit Union Journal. "We will clean up the mess that Target caused."
This is the second class action filed against the Minneapolis retail giant over the data breach that began in late November and continued through at least Dec. 15. It is estimated that more than 40 million accounts were compromised.
The firm also filed a class action suit Dec. 20 on behalf of consumers whose credit and debit card information was compromised at Target stores.
Under Alabama law, $212 million-asset ASECU must initially ask for a minimum of $5 million in damages, but Miles expects the final figure to be in the "hundreds of millions of dollars" after other financial services firms, including some banks, join the class action.
ASECU's complaint states that as a result of the breach of Target's security, the credit union was required to "expend time, energy and expense to address and resolve these financial disruptions and mitigate the consequences by refunding loss deposits; issuing new credit and debit cards; closing compromised or suspected-to-be compromised accounts; opening new accounts; and increased costs in monitoring customer and member accounts to determine which transactions are legitimate or fraudulent."