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Attorneys General Oppose TJX Data Breach Settlement

Special sale said to help stores more than victims

by Martin H. Bosworth
ConsumerAffairs.com

November 23, 2007

Massachusetts Attorney General Martha Coakley called the proposed three-day event "nothing more than a retail sale, which would primarily benefit the defendant, TJX Companies."

Coakley, writing on behalf of nine other state Attorneys General, petitioned U.S. District Court Judge William Young to reconsider the sale, or "at the very least, subject the Special Event to heightened scrutiny before approval."

Coakley argued that the sale would not offer any real benefit for members of the class-action suit, whether they were victims of fraud resulting from the breach or simply had their cards replaced.

Coakley, who was a victim of identity theft in an unrelated case last year, said that TJX should not abuse the public's good will "for a sale that enhances its bottom line, nor should the class’s attorneys reap large fees for an unquantifiable and dubious benefit."

TJX proposed the settlement in September 2007 to ward off multiple class-action lawsuits against it for letting as many as 94 million customers be exposed to hackers in a data breach that occurred over several years. In addition to the three-day sale, TJX has offered store credit vouchers to victims of the breach who provide documentation to substantiate their claim.

TJX also proposed reimbursing claimants who had to replace drivers' licenses as a result of the breach, but the claimants must provide written documentation of the claim.

The proposed settlement would not affect separate lawsuits filed against TJX by numerous banks and financial trade associations, who want to hold TJX liable for the costs of replacing the millions of credit and debit cards exposed as a result of the breach.

Although the TJX company's initial estimates were that 46 million customers may have been affected by the breach, internal court filings in the bank lawsuit showed the numbers closer to 94 million, with costs to card issuers such as Visa ranging from $65 to $80 million.

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