TJX settles another class action over data breach
Friday, September 4, 2009
TJX Companies yesterday announced a settlement agreement that will result in the dismissal of a class action initiated by financial institutions as a result of the data breach of TJX's network security during 2005 and 2006 that exposed approximately 40 million credit card numbers.
Under the settlement, TJX paid $525,000, which primarily reimbursed the settling banks for a portion of their expenses, excluding attorneys' fees, incurred in pursuing the class action. Under the agreement, AmeriFirst Bank, HarborOne Credit Union, SELCO Community Credit Union and Trustco Bank agreed to release all of their claims against TJX.
TJX has denied all wrongdoing, but the company earlier this year settled with 41 states for $9.75 million. State attorneys general sued the company in 2007 alleging that TJX's data security systems contained vulnerabilities that allowed hackers to compromise the system.
The hacker charged in the TJX data breach, Miami resident Albert Gonzalez, has reportedly entered into a plea agreement with prosecutors to serve 15 to 25 years. Gonzalez has also been indicted for allegedly hacking the systems of Heartland Payment Systems, Hannaford, 7 Eleven and two other retail companies.
TJX's settlement with the states requires the company to upgrade all wireless systems in TJX retail stores to wired or WPA systems; and to segment customer data from the rest of the company's systems through firewalls and other protections.
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