Six of Seven Bank Groups Settle with TJX
January 7, 2008,
As off-price retailing titan The TJX Cos. continues to work its way out of its computer security breach fiasco, the $118 million reserve charge it took (in fiscal second-quarter results) against settlement charges seems to be covering the liability expenses to date.
TJX denied all wrongdoing. The class action by the banks is still subject to a pending motion for reconsideration, TJX noted, "and a possible appeal by the non-settling plaintiff bank."
The 2,572-store company in November reached a settlement with Visa that stipulated $40.9 million pre-tax "in alternative recovery payments" to issuing institutions, on condition that issuers of at least 80% of the eligible Visa accounts accepted the offer by Dec. 19. That condition was surpassed when, on Dec. 20, TJX said issuers representing more than 95% of the eligible U.S. Visa accounts had accepted the offer.
"We are pleased with the overwhelming response from issuers and appreciate the cooperation TJX has shown during this process," said Ellen Richey, head of global risk management for Visa Inc. "The alternative recovery solution Visa and TJX delivered to the marketplace demonstrates how payment system participants can resolve differences for the benefit of the entire system."
Under the agreement, the financial institutions were to receive their payments from TJX by Dec. 27, 2007.