Wendy's $50m Data Breach Settlement Posted by Association of Vermont Credit Unions on 8:56 AM

According to Credit Union Times, Wendy's has reached settlement with a group of credit unions and leagues following a 2-1/2 year litigation over the company's 2015 data breach.

The settlement requires Wendy’s to pay $50 million to a settlement fund set up to compensate financial institutions and pay attorney fees. Subject to court approval, Wendy’s will also pay a $7,500 “service award” to each deposed plaintiff, plus $2,500 to three other financial institution plaintiffs in the class-action complaint.

The plaintiffs’ attorneys will request 30% of the settlement plus reimbursement for their costs and expenses, according to court documents. Financial institutions in the settlement class can file a claim without having to submit proof of their losses, according to a memorandum filed with the court.

The Wendy's breach affected more than 1,000 Wendy’s franchise locations and 18 million payment cards. Plaintiffs alleged that criminals sold much of the exposed data on the black market; criminals then used the data to make fraudulent transactions. That caused credit unions to cancel and reissue cards, reimburse members for fraud, as well as incur other expenses, the plaintiffs claimed.

The litigation against Wendy's was initiated by First Choice Federal Credit Union, a $43m Pennsylvania credit union serving 6,500 members.