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Network World - Retailer TJX yesterday detailed the mounting legal woes and financial costs spawning from a data-breach disclosed in January that’s believed to have resulted in the compromise of at least 45.6 million credit and debit cards.
In its quarterly filing with the Securities and Exchange Commission, TJX acknowledged that the computer intrusion still under investigation has cost it $20 million during the first quarter alone, and that costs were expected to continue to mount in future quarters.
In addition, stated TJX, “We face potential liabilities from customers, banks, payment card companies and governmental entities with respect to the computer intrusion.”
TJX says it’s facing several “putative class-action lawsuits” filed in Massachusetts, Illinois, Ohio and elsewhere. These lawsuits are said to represent individuals, financial institutions and others claiming injury and shareholder interest associated with the computer intrusion. Some lawsuits also name Fifth Third Bancorp as a defendant because it processed payment-card transactions for TJX.
TJX is also facing a lawsuit from the Massachusetts Bankers Association representing banks pressing to have their losses associated with the data breach covered by TJX.
TJX stated in the filing that the $20 million in costs tied to the data breach was spent on investigating the security lapse, strengthening computer security and communicating with customers about the compromise of sensitive financial data.
TJX, which has 125,000 employees, operates hundreds of T.J. Maxx and other stores in the United States and the United Kingdom. In the quarterly filing, TJX reported net sales for the quarter ending April 28 were $4.1 billion, up from $3.8 billion the same quarter a year ago. Net income for the quarter was down from $163.8 million a year ago to $162.1 million in the first quarter of this year.
Read more about security in Network World's Security section.