April 24, 2007 / 9:59 PM / 12 years ago

Banks to sue TJX over credit card security breach

BOSTON, April 24 (Reuters) - Groups representing 300 banks plan to file a class-action lawsuit against U.S. retailer TJX Cos. Inc. over a security breach involving data from millions of credit and debit cards, an industry body said on Tuesday.

The lawsuit to be filed in U.S. District Court in Boston by the Massachusetts Bankers Association on Wednesday will seek at least “tens of millions of dollars” in damages, said Bruce Spitzer, a spokesman at the association.

The Connecticut Bankers Association, the Maine Association of Community Banks and individual banks are joining the lawsuit as co-plaintiffs, the association said.

“Our members say hot credit cards are still coming in, so we’re not ready yet to assess the full extent of costs and thereby the damages,” Spitzer said. “At a minimum it’s going to be tens of millions of dollars.”

Massachusetts-based TJX (TJX.N), which operates the T.J. Maxx and Marshalls chains, said last month that information from 45.7 million credit and debit cards was stolen in a computer security breach over 18 months through mid-January.

Other information, including names, addresses and personal ID numbers for about 451,000 people who returned merchandise without a receipt, was also stolen.

Preliminary estimates of the costs range up to $25 per card, the Massachusetts Bankers Association said.

“Also, consumers have zero liability and banks absorb the cost for any liability that occurs and that has been happening also,” said Spitzer.

TJX has said it believes its computer system was accessed by an unauthorized user in July 2005, then on subsequent dates in 2005 and from mid-May 2006 to mid-January 2007. It has said that no customer data was stolen after Dec. 18, 2006.

In March, six people in the Miami, Florida area were arrested in connection with the purchase of hundreds of thousands of dollars worth of gift cards from Wal-Mart Stores Inc. and Sam’s Club with credit and debit cards suspected of coming from the TJX breach, according to media reports.

In response to the security lapse, Massachusetts lawmakers are considering a bill that would make retailers such as TJX and other companies liable when hackers breach their security systems and steal credit card data.

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