TJX Companies, Inc.

September 24 2007

Framingham, MA: (Sep-21-07) Several class action lawsuits were brought against TJX Companies, Inc., a discount retailer, following a massive security breach of customer data that affected at least 45 million credit and debit cards. On Jan. 17, 2007, TJX disclosed a breach of its computer systems by an unknown hacker or hackers who accessed card data from transactions as long ago as 2003. On March 28, TJX said at least 45.7 million of its shoppers' cards had been compromised. Independent organizations that track data thefts say the TJX case is believed to be the largest in the US based on the number of customer records compromised. TJX officials stated that about three-quarters of the 45.7 million cards had either expired by the time of the theft, or the stolen information didn't include security code data from the cards' magnetic stripes. However, TJX also has said the intruders could have tapped the unencrypted flow of information to card issuers as customers checked out with their credit cards.

The lawsuits, filed in the United States, Canada, and Puerto Rico, reached settlement, with company officials claiming that the estimated costs of the deal being included in a $107 million reserve included in its second-quarter report for fiscal 2008 and its estimate of $21 million in costs expected in fiscal 2009. The $107 million figure also includes costs from other lawsuits not included in the customer class actions. The settlement also includes Cincinnati-based Fifth Third Bancorp, which processed some payment card transactions for TJX and was named in some of the customer lawsuits. The settlement was reached without any admission of liability, and sought to avoid the risks and costs of litigation. [BUSINESS WEEK: TJX DATA BREACH]


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