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TJX settles data breach charges, avoids fines

TJX said last March that at least 45.7 million cards were exposed to possible fraud in a breach of its computer systems. TJX said last March that at least 45.7 million cards were exposed to possible fraud in a breach of its computer systems. (Winslow Townson/Associated Press/File 2008)
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Associated Press / March 28, 2008

WASHINGTON - More than a year after millions of T.J. Maxx and Marshalls customers found out their credit card information had been hacked into, the discount stores' operator agreed to have its information audited but avoided paying federal fines.

TJX Cos. was one of three firms that agreed to settle charges that each "failed to provide reasonable and appropriate security for sensitive consumer information," federal regulators said yesterday in two unrelated data-breach decisions.

Data broker Reed Elsevier PLC and its Seisint subsidiary also avoided fines but have agreed to obtain third-party audits biennially for 20 years under a separate settlement with the Federal Trade Commission.

The agreements, which will be finalized after a 30-day public comment period, also require the companies to implement comprehensive information security programs. "These cases bring to 20 the number of complaints in which the FTC has charged companies with security deficiencies in protecting sensitive consumer information," FTC chairwoman Deborah Platt Majoras said.

TJX said last March that at least 45.7 million cards were exposed to possible fraud in a breach of its computer systems. Court filings by banks that sued TJX estimated the number of cards affected at more than 100 million.

In the other case, personal information about hundreds of thousands of people held by Netherlands-based Reed Elsevier's LexisNexis unit may have been accessed in 2005 by unauthorized individuals using stolen passwords and IDs to access Seisint databases.

Sherry Lang, TJX's senior vice president for investor and public relations, said the company disagreed with the FTC's allegations, but agreed to the settlement "which is consistent with the agreements between the FTC and other retailers that have been victimized by cyber crime."

The Framingham, Mass., company's 2,500 stores include the T.J. Maxx and Marshalls chains. TJX shares fell 29 cents to $33.27, while Reed Elsevier fell 83 cents to $49.97.

A spokeswoman for LexisNexis, which acquired Seisint in 2004, said it has resolved the issues identified by the government.

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