Summary
TJX Companies, Inc. (TJX) has entered into a material definitive agreement, a settlement agreement with Visa U.S.A. Inc., Visa Inc., and Fifth Third Bank to resolve disputes related to a past computer intrusion. This agreement outlines an alternative recovery offer to eligible U.S. Visa issuers whose card data may have been at risk during specific periods in 2002-2003 and 2006. The core of the settlement involves TJX funding up to $40.9 million pre-tax for these recovery payments, a cost already accounted for in the company's previously announced charge for the computer intrusion in fiscal 2008's second quarter. The settlement's effectiveness is contingent upon acceptance by issuers representing at least 80% of eligible accounts by December 19, 2007. This resolution aims to prevent further litigation and streamline compensation for affected Visa issuers.
Key Highlights
- 1TJX, Visa, and Fifth Third Bank entered into a settlement agreement to resolve disputes stemming from a prior computer intrusion.
- 2An alternative recovery offer will be made to eligible U.S. Visa issuers whose card data was potentially compromised.
- 3TJX will fund up to a maximum of $40.9 million pre-tax for these alternative recovery payments.
- 4The estimated costs of this settlement have already been reflected in TJX's fiscal 2008 second quarter charge for the computer intrusion.
- 5The settlement requires acceptance by issuers of at least 80% of eligible accounts by December 19, 2007, though this condition can be waived.
- 6Accepting issuers will waive their rights to other recovery actions against TJX, Visa, and Fifth Third Bank.
- 7Visa has agreed to suspend pending fines on Fifth Third Bank and has accelerated the restoration of TJX's interchange fee rates.