Summary
TJX Companies, Inc. (TJX) announced on April 2, 2008, a settlement agreement with MasterCard International Incorporated to resolve disputes arising from TJX's previously disclosed computer intrusion. This agreement aims to address potential claims from TJX, MasterCard, and worldwide MasterCard issuers related to the theft of MasterCard payment card data. The settlement involves MasterCard making alternative recovery offers to eligible MasterCard issuers who submitted claims related to the data breach. TJX will fund up to $24 million pre-tax for these payments, with the costs already factored into a reserve established in the fiscal year ending January 26, 2008. The effectiveness of the settlement is contingent upon at least 90% of eligible issuers accepting the settlement offers by May 2, 2008. Upon consummation, issuers accepting the settlement will release TJX from further claims related to the intrusion and alleged data security non-compliance.
Key Highlights
- 1TJX entered into a settlement agreement with MasterCard on April 2, 2008, to resolve disputes stemming from a prior computer intrusion.
- 2The settlement addresses potential claims from TJX, MasterCard, and worldwide MasterCard issuers regarding stolen payment card data.
- 3MasterCard will offer alternative recovery options to eligible issuers who filed claims related to the data breach.
- 4TJX will fund up to $24 million pre-tax for these recovery payments.
- 5The estimated costs of this settlement are already accounted for in TJX's existing reserve for the computer intrusion.
- 6The settlement requires acceptance by issuers representing at least 90% of the affected MasterCard accounts by May 2, 2008.
- 7Accepting issuers will release TJX from claims related to the computer intrusion and alleged data security non-compliance.