June 22, 2009
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News: TJX Settles $9.75 Million Suit
TJX Cos. Inc., the owner of big box retailers T.J. Maxx, Marshalls, and Home Goods has entered into a 41 state settlement covering one of the largest credit card data breaches in retail history. The suit which was filed in January 2007 accused TJX of negligence for failing to provide adequate security of customers' debit and credit card information. The suit also maintained that the company acted with little regard to customers by not reporting the data breach for a month after learning of the compromise. According to the lawsuit, the breach compromised more than a million debit and credit card customers' personal financial information, violated their privacy rights, and exposed them to fraud and identity theft.
Hackers infiltrated the retailer's security system between July 2005 and November 2007 to access customers' personal information stored in the main server at TJX's Framingham, Mass. Headquarters. The hackers were able to access millions of debit and credit card numbers as well as well as consumers' names, addresses, social security numbers, military ID numbers and drivers' license numbers. TJX received massive criticism over the incident which lead to the resignation of the then TJX group president Alexander Smith. According to the terms of the settlement, the company will pay a total of $9.75 million to 11 states. The settlement also requires TJX to implement a comprehensive information security system that would safeguard consumers' debit and credit card information in the future.
TJX must also upgrade all wireless systems in their retail stores; minimize the amount of time they store debit or credit card data on their network; install security measures to separate sensitive information from other portions of their computer system; and implement security password management to protect the sensitive information. The terms of the agreement also require TJX to obtain an independent assessment of its information security system and report regularly on the system's performance. TJX Cos. Inc is traded on the NYSE under the symbol TJX.