HOUSTON, Feb. 8 /PRNewswire/ -- Early last month, it was announced that Heartland Payment Systems ("Heartland") had negotiated a $60 million settlement with Visa to obtain releases of liability from financial institutions issuing Visa payment cards compromised by the Heartland Data Breach first announced in January 2009. Visa sent customized settlement information packets to the affected financial institutions on January 14, 2010. In order to accept the settlement, a financial institution was required to affirmatively complete and return the settlement paperwork to Visa by January 29, 2010. The offers–at least those reviewed by class counsel–appeared to be less than 10 cents on the dollar for most financial institutions (and some at less than 1 cent on the dollar).
Last week, as expected (given the fact that the vast majority of the compromised cards were issued by a relative handful of mega banks), Visa announced that financial institutions representing 97% of the compromised payment cards accepted the proposed settlement. However, that leaves roughly 2.5 million cards and tens of millions of dollars in costs and absorbed fraudulent charges outside of the settlement for the Visa cards alone (not to mention the roughly 50 million compromised Master Card accounts). Visa and Heartland have now "renewed" and extended the settlement offers until February 8, 2010, for those financial institutions that did not previously accept them.
Joe Sauder of Chimicles & Tikellis LLP, one of the Co-Lead Interim Counsel for the financial institutions in the federal court class action case in Houston, commented, "If Visa truly had the financial institutions' interests at heart," Sauder continued, "Why didn't Visa give everyone 30 days at the outset to decide whether to accept the offer? We have asked this question since Visa first announced the settlement. There was no reason to set an arbitrary and unreasonably short deadline."
Mike Caddell of Caddell Chapman, LLP, another of the Co-Lead Interim Counsel for the financial institutions, added: "The bottom line is that the "renewed" deals Heartland and Visa are currently offering are precisely the same deals offered two weeks ago, the calculus remains the same for the financial institutions based on their own unique damages experiences and, most important, these "renewed" settlement offers will in no way impact the federal class action in Houston–we are committed to going forward and intend to vigorously litigate this action.
