Target agrees to pay $10M to settle data breach lawsuit

Target confirmed on Wednesday that it has agreed to pay $10 million in a proposed settlement of a class-action lawsuit related to a huge data breach in 2013 that consumers said compromised their personal financial information.

Under the proposal, which requires federal court approval, Target will deposit the settlement amount into an interest bearing escrow account to pay individual victims up to $10,000 in damages.

The claims will be submitted and processed primarily online through a dedicated website, according to the court documents.

The proposed settlement also requires the Minneapolis-based company to appoint a chief information security officer, keep a written information security program and offer security training to its workers.

It must also maintain a process to monitor for data security events and respond to such events deemed to present a threat.

"We are pleased to see the process moving forward and look forward to its resolution," said Target spokeswoman Molly Snyder.

CBS News, which earlier reported the settlement, said a court hearing on the proposed settlement was set for Thursday in St. Paul, Minnesota.

Target has said at least 40 million credit cards were compromised in the breach during the 2013 holiday shopping season and may have resulted in the theft of as many as 110 million people's personal information, such as email addresses and phone numbers.

A U.S. judge in December cleared the way for consumers to sue the retailer over the breach, rejecting Target's argument that the consumers lacked standing to sue because they could not establish any injury. 

Also on Wednesday, Target announced plans to raise the minimum wage it pays to its U.S. workers to $9 per hour, following similar moves by rivals Walmart and TJ Maxx. 

The wage increase follows last week’s announcement that Target was laying off 1,700 workers and eliminating another 1,400 unfilled positions as part of a restructuring plan aimed at saving $2 billion over the next two years. 

Wire services