Minnesota Law – Q: What is the liability if there is a security breach and an access device has been compromised?

A: Whenever there is a breach of the security of the data system of a person or entity, in violation of MN Statute 325E.64, the violating person or entity shall reimburse the financial institution that issued any access devices affected by the breach for the costs of reasonable actions undertaken by the financial institution as a result of the breach in order to protect the information of its cardholders or to continue to provide services to cardholders, including but not limited to, and cost incurred in connection with:

  • the cancellation or reissuance of any access device affected by the breach;
  • the closure of any deposit, transaction, share draft, or other accounts affected by the breach and any action to stop payments or block transactions with respect to the accounts;
  • the opening or reopening of any deposit, transaction, share draft or other accounts affected by the breach;
  • any refund or credit made to a cardholder to cover the cost of any unauthorized transaction relating to the breach; and
  • the notification of cardholders affected by the breach.

The financial institution is also entitled to recover costs for damages paid by the financial institution to cardholders injured by a breach of the security of the system of a person or entity that has violated MN Statute 325E.64. Costs do not include any amount recovered from a credit card company by a financial institution. The remedies under MN Statute 325E.64, Subd. 3 are cumulative and do not restrict any other right or remedy otherwise available to the financial institution.

Find more common real estate questions and answers in the Desktop Reference Guide!

The Minnesota Association of REALTORS® is the largest professional trade association in the state with more than 17,000 members who are active in all aspects of the real estate industry. 

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