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CU System
TJX Cos. settles with MasterCard
FRAMINGHAM, Mass. (4/4/08)--TJX Cos. Inc. has entered into an agreement with MasterCard International Inc. to settle a lawsuit related to the largest data breach in history. The TJX breach compromised as many as 94 million cards, including those issued by credit unions. The agreement calls for MasterCard to make alternative recovery offers to its eligible card issuers who issued payment cards claimed as compromised in the breach. MasterCard will recommend that eligible MasterCard issuers accept such offers. TJX will fund up to a maximum $24 million (pre-tax) in alternative recovery payments, depending on the extent of acceptance by card issuers. The settlement sets one condition: Issuers of at least 90% of the accounts claimed in the breach must accept the alternative recovery offers by May 2. Accepting issuers will release and indemnify TJX and its acquiring banks on their claims, the claims of their affiliated issuers, and those of their sponsored issuers as MasterCard issuers related to the intrusion. That includes claims in putative class actions in federal and Massachusetts state courts. The Framingham, Mass., discount retailer announced the settlement Wednesday in a press release (Business Wire April 2). The funds to pay the alternative recovery payment settlement were put aside in reserves that TJX established earlier for costs related to the computer intrusion. TJX had already entered a separate settlement with Visa U.S.A. in December, where 95% of financial institutions eligible for U.S. Visa accounts potentially affected accepted an alternative recovery offer. That deal had required 80% of the institutions eligible to accept the alternative recovery offer (News Now Dec. 21). Some credit unions and banks opted not to take the settlement in the Visa case and have separate lawsuits pending. For example, SELCO Community CU in Eugene, Ore., and AmeriFirst Bank in Alabama are appealing the dismissal of their class action lawsuit against the retailer (News Now March 26).
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