TJX Settles Visa Suit About Data Breach
Tuesday, December 18, 2007
According to Consumer Affairs:
""TJX Companies Inc., the corporate parent of retail chains T.J. Maxx and Marshalls, has reportedly agreed to a $41 million settlement with Visa in connection with a massive data security breach."
You can read more about this at Reuters, the Boston Globe, and CNN Money. According to CNN:
"In return, Visa will suspend and rescind a portion of the data breach fines it levied on the retailer's U.S. acquirer that remain eligible for appeal. At least 80 percent of the eligible Visa issuers must accept by Dec. 19 for the settlement to finalize."
You may remember, the TJX breach happened in 2006 (some say 2005) and wasn't reported until the end of 2006. First, some 45 million records were stolen, but the number was increased to about 90 million records. According to the news report, the credit-card-issuer companies incurred about $65 to $80 million in expenses to replace the stolen consumers' credit cards. Obviously, the card issuers want to be reimbursed by TJX for those expenses since TJX was lax about its data security. If the banks and card issuers have to absorb this expense, then everyone else will effectively pay for TJX's lax data security through higher credit card fees and rates.
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