TJX, the US retailing giant, has agreed to reimburse banks nearly $41m in losses stemming from the theft of as many as 100 million credit- and debit-card accounts in the world's largest data breach.
The tentative deal, which still must be approved by issuers representing 80 per cent of affected Visa cards, calls for TJX to pay up to $40.9m in costs for reissuing cards and covering fraud losses. TJX, parent company of Marshalls, TJ Maxx and other stores, also agreed to promote security standards that issuers have long tried to get merchants to adopt.
In return, banks agree not to sue TJX or its partners and Visa will suspend a portion of the fines it levied against TJX as a result of the breach.
The settlement, which was announced here, came a day after some 300 banks suing TJX lost their bid to have the lawsuit treated as a class action, a status that would have greatly lowered the cost of pursuing the case.
Visa is the largest payment card network. TJX has yet to disclose a deal with MasterCard, which also sustained losses as a result of the breach.
In January, TJX revealed that intruders penetrated its network defenses and over a 17-month span stole personal information relating to 45.7 million accounts. Evidence presented in the banks' lawsuit suggested the number of accounts exposed in the heist was actually 100 million.
TJX has been roundly criticized for running a network that was riddled with security holes. Among other things, the company protected wireless networks with Wired Equivalent Privacy, an encryption scheme that can be broken in less than an hour using off-the-shelf hardware and software. ®