MINNEAPOLIS, MN (CN) - Target agreed to pay $10 million to settle a class action over a 2013 holiday season data breach that consumers claimed compromised as many as 100 million credit and debit accounts.
Under the terms of the proposal, which still requires the approval of a federal judge in Minneapolis, Target will deposit the money in an interest bearing escrow account, and ultimately pay individual victims up to $10,000 in damages.
Despite a federal judge's dismissal last December of most of the consumer-negligence claims that had been filed against Target due to the breach, the retailer has continued to struggle in the realm of public perception.
To woo shoppers back to its aisles, Target over the past 15 months has granted one-year free credit card monitoring to in-store shoppers, and has forgiven all fraudulent charges reported by affected consumers.
Investigators believe the security breach was carried out by thieves who installed software on Target's payment terminals to capture credit information. The breach affected over 1,700 of Target's 1,900 stores.
If the settlement is approved by U.S. District Judge Paul Magnuson, who held a hearing on the proposal Thursday afternoon, claims will be submitted and processed primarily through a dedicated website.
The settlement proposal also requires Target to adopt and implement data security measures, including appointing a chief information security officer, maintaining a written information security program, and implementing a process to monitor for so-called "information security events" and to respond to such events determined to present a threat.
Magnuson said at the Thursday hearing that he will preliminarily approve the settlement. People can file claims before he holds a hearing for final approval, in late October or early November.
Magnuson praised Target "for being willing to step up."
In a written statement, Target spokeswoman Molly Snyder said the company is "pleased to see the process moving forward and looks forward to its resolution."
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.