TJX Announces Settlement Agreement With Visa USA and Visa Inc.
The TJX Companies has announced that "it has entered into a Settlement Agreement with Visa U.S.A. Inc. and Visa Inc. Under the agreement, an alternative recovery offer will be made to eligible U.S. Visa issuers that issued payment cards potentially affected by TJX’s previously announced unauthorized computer intrusion(s), and Visa will recommend the offer."
TJX has agreed to fund up to a maximum of $40.9 million pre-tax in alternative recovery payments depending on the extent of the acceptance of the alternative recovery offer. The settlement is conditioned on acceptance of the alternative recovery offer by December 19, 2007 by issuers of at least 80% of the eligible Visa payment card accounts. The estimated costs of this settlement are already reflected in the charge related to the computer intrusion(s) that TJX took in its fiscal 2008 second quarter.
Carol Meyrowitz, President and Chief Executive Officer of The TJX Companies, Inc., stated, “We believe this Settlement Agreement provides a fair resolution of these issues, and look forward to a high issuer acceptance of the proposal. At TJX, we have learned a great deal about the risks of cyber attacks and have responded aggressively to take our own security to even higher levels. We also have learned about the heightened security risks that exist across the entire U.S. retail and banking industries as a result of today’s high tech criminals. We believe that cooperative action is required by all banks, payment card companies and merchants to better protect customer payment card data, and we look forward to working together with Visa to further this goal.”
Once the settlement is completed, accepting issuers will be paid by December 27, 2007. Each accepting issuer will waive certain rights to any other recovery through litigation or otherwise and provide certain releases of TJX and its U.S. acquiring banks. The agreement contains a number of other provisions including Visa’s suspension and rescission of specified fines, TJX's agreement to serve as a spokesperson in support of the goals of the Payment Card Industry – Data Security Standards and the security of payment card information as well as Visa's agreement to provide TJX the opportunity to pilot any new payment card security technology. In addition, the Settlement Agreement provides for certain releases by TJX, Fifth Third and Visa.
The TJX Companies, Inc. is the leading off-price retailer of apparel and home fashions in the U.S. and worldwide. The Company operates 851 T.J. Maxx, 778 Marshalls, 287 HomeGoods, and 130 A.J. Wright stores, as well as 34 Bob’s Stores, in the United States. In Canada, the Company operates 190 Winners and 71 HomeSense stores, and in Europe, 225 T.K. Maxx stores. TJX’s press releases and financial information are also available on the Internet at www.tjx.com.
Add your comment... (note that all comments are reviewed before they're published)