May 2, 2007

NEWS: TJX to be Sued by Banks

The Bankers Associations of the states of Massachusetts, Connecticut, and Maine, along with at least three individual financial institutions, announced last week their intent to bring a suit against TJX Cos. for the company’s alleged negligence in allowing a data breach that exposed some 45 million credit and debit cards to fraud and potential identity theft. The newest suit, which seeks class-action status, is not the first that TJX is facing over the now globally notorious theft, but may just turn out to be the largest, so far. The three state Bankers Associations alone represent over 300 unique financial institutions. It joins scores of other suits originating in several U.S. states, as well as in Canada.

Consumers, investors, and banking institutions are turning to TJX to recoup the huge costs they incurred in replacing the cards and covering fraudulent charges made to the accounts of those millions of consumers impacted by the incident. Since TJX disclosed the security breach some three months ago, now (and after holding onto the news for months, say reports), they have been clobbered with accusation of unfair trade practices, negligence in managing private customer data, and misrepresentation of the scope of the problem when it first emerged.

Experts say that TJX is probably staring down tens of millions of dollars in suits right now. A TJX spokesperson stated that the company does not publicly address pending litigation.


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