Credit card security firm says lawsuit filed against it on Target breach without basis

March 31
8:34 AM 2014

The credit card security company that has been sued together with Target Corp on the breach of customers' data said it was not responsible for managing the data security of Target nor did it process the data of the retailer's cardholders as claimed by the lawsuit, Reuters reported.

Trustwave Holdings Inc Chief Executive Officer Robert McCullen wrote to clients and business partners, saying that their role in Target is not the same as what two lenders alleged in a lawsuit filed earlier that sought damages amounting to no less than $5 million, the report said.

The letter, which was posted on the security firm's website, said "Contrary to the misstated allegations in the plaintiffs' complaints, Target did not outsource its data security or IT obligations to Trustwave. Trustwave did not monitor Target's network, nor did Trustwave process cardholder data for Target." The company added that these allegations are baseless.

New York-based Trustmark National Bank and Green Houston-based Bank NA claimed in their lawsuit that the retailer and Trustwave were not able to secure the data of its clients properly which led 40 million payment records and 70 million other records which included information such as addresses and phone numbers to be stolen, the report said.

According to the banks, the breach cost them money because they informed clients of the event, refunded false charges and reissued cards. They claimed that if criminals would use the stolen cards as forecasted by analysts, their losses could escalate. Both banks said the losses could reach $1 billion for the card issuers they seek to represent in a class action lawsuit. For the banks and retailers, the losses could go up to $18 billion, the report said.

The lawsuit filed seems to be the first aimed at Trustwave based in Chicago although Target is already facing a number of cases over the hacking incident that happened during last year's holiday shopping season, the report said.

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