WASHINGTON (12/17/07)—Credit unions and other U.S. Visa card issuers have until Wednesday to decide how to proceed in recouping credit and debit card replacement costs following a security breach at discount retailer TJX Cos. According to Credit Union National Association (CUNA) General Counsel Eric Richard, affected issuers have five options related to a $40.9 million settlement with Visa Inc. and the company's credit card payments processing bank, Fifth Third Bancorp, in a lawsuit over the largest customer data breach in U.S. history. Three options involve recovery through Visa, while two involve litigation, said Richard, who participated in a conference call with state credit union and Visa representatives last week. The options include:
* Alternative recovery offer through the Visa/TJX settlement agreement; * Account data compromise recovery; * Visa compliance process; * Potential class action litigation; or * Individual litigation.
To take effect, at least 80% of U.S. Visa card issues must approve the settlement by Dec. 19. By accepting the deal, they would agree to waive their right to sue TJX and Fifth Third, in exchange for payment of their breach-related costs by Dec. 27. Affected credit unions should have received their offer from Visa on Dec. 6. If the 80% threshold is not met, Visa, TJX, and TJX’s acquirers have the option to withdraw the alternate recovery offer. The agreement does not include other credit card associations such as MasterCard. Richard said while CUNA was not in a position to assess an individual credit union’s situation, the trade association drafted a summary of each option, along with preliminary pros and cons. Use the resource link below to access the CUNA summary.