TJX settles with banks for $525,000

Settlement will reimburse four banks for some of their expenses related to the data security breach disclosed by the retailer in 2007

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TJX Companies Inc. said it will pay $525,000 to settle a lawsuit by several financial institutions as a result of the massive data breach of its computer system.

The settlement, announced Wednesday, will reimburse AmeriFirst Bank, HarborOne Credit Union, SELCO Community Credit Union and Trustco Bank for a portion of their expenses related to the retailer's breach. The banks agreed to release all their claims against TJX, which denied all wrongdoing.

Framingham, Mass.-based TJX, the parent company of T.J. Maxx and Marshall stores, disclosed in January 2007 that its systems were hacked, exposing at least 45.7 million credit and debit cards to possible fraud.

In June, the company agreed to pay $9.75 million to settle a lawsuit brought on by attorneys generals from 41 states. Under the terms of the settlement, the company was to pay $2.5 million to create a data security fund for states and a settlement amount of $5.5 million and $1.75 million to cover expenses related to the states' investigations.

In that settlement, TJX also said it agreed to certify that TJX's computer system meets detailed data security requirements specified by the states; and encourage the development of new technologies to address systemic vulnerabilities in the U.S. payment card system.

In December 2007, TJX agreed to pay Visa card issuers up to $40.9 million to cover costs related to the breach.

Federal officials arrested Albert Gonzales, 28, of Miami, in connection with the TJX breach and last month indicted him and two Russians on charges related to breaches at Heartland Payment Systems Inc., and other retailers.

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