TJX settles with MasterCard for $24 million
Discount retailer TJX,
parent of T.J. Maxx and Marshalls, has agreed to a $24 million
settlement with MasterCard over a security breach that left tens of
millions of credit card accounts at risk to identity theft.
The company said the pre-tax payout will go to banks that issue
MasterCard credit cards and were impacted by the breach for things such
as reissuing cards and fraud compensation. TJX said the settlement is
covered by the more than $200 million it previously budgeted for the
TJX said issuers with at least 90 percent of the eligible accounts must
agree to the settlement by May 2 for it to take effect. Issuers must
have previously filed claims and agree to the recovery program"s terms
to be eligible for compensation funded by the agreement, according to
Under the terms of the agreement, MasterCard card issuers who meet
certain restrictions will be eligible to receive financial restitution
in the second quarter of 2008, according to MasterCard. Card issuers
also must agree to release MasterCard and TJX from “all legal and
financial liability associated with the TJX data breach,” the bank card
company said in a release.
"Beyond the millions of dollars we have spent to add significant
security to our computer system, we are installing security measures
which exceed those of many other retailers and current industry
requirements," Carol Meyrowitz, president and chief executive officer
of TJX, said in a prepared statement.
She added that the company looks "forward to a high level of issuer acceptance" of the settlement.
The TJX breach affected about 94 million accounts, according to court
filings. TJX has admitted that the breach exposed 45.7 million credit
card numbers to hackers.
In November, TJX agreed to pay Visa
a $40.9 million settlement that will fund reimbursement to banks that
issue Visa cards and were affected by the breach. Those banks agreed
not to sue TJX as part of the settlement.
TJX also last week agreed to a settlement
with the Federal Trade Commission over the breach. In that settlement,
TJX agreed create a comprehensive security program and undergo a
third-party audit of its security program every two years for the next