Markey calls for FTC probe of TJX

Pressure mounted on TJX Cos. yesterday after an Alabama bank filed a class action lawsuit against the Framingham discounter for negligence and breach of contract as Massachusetts Congressman Ed Markey called on the Federal Trade Commission to investigate how the company lost control of potentially millions of customers' credit- and debit-card data.

AmeriFirst Bank, of Union Springs, Ala., filed its suit in US District Court in Boston and also named as a defendant Fifth Third Bank of Ohio, the company that processed debit and credit transactions for TJX. AmeriFirst Bank, which referred calls to lawyers , estimates that thousands of financial institutions will join the suit that accuses the businesses of failing to adequately safeguard private data and delaying disclosure of the breach.

The suit aims to recover losses, including the cost to replace compromised cards, and fraudulent charges made with the exposed cards. AmeriFirst Bank has identified 150 credit and debit cards that have been compromised and will need to be reissued at $20 a card, according to the suit, which is seeking class action status.

Fifth Third Bank declined to comment, and TJX could not be reached yesterday evening.

The bank suit follows several filed by consumers who are seeking class action status against TJX in Massachusetts, Alabama, Puerto Rico, and California. TJX runs more than 2,500 stores worldwide, including T.J. Maxx and Marshalls.

The Massachusetts Credit Union League is also pursuing reimbursement from TJX for costs its members have incurred for reissuing cards and other expenses. Banks have canceled hundreds of thousands of credit and debit cards since TJX disclosed on Jan. 17 that a hacker broke into the company computer system, stealing customer data as far back as 2003.

James W. Blake , chairman of the Massachusetts Credit Union League and chief executive of HarborOne Credit Union in Brockton, sent a letter to TJX chairman Ben Cammarata last week, blasting him for the security breach that so far has compromised about 100,000 credit and debit cards issued by credit unions in Massachusetts.

"As a CEO running a company of your size in 2007, it is beyond comprehension that you would make a decision not to provide the proper level of security within your company to protect the personal and private information of customers," Blake wrote in the Jan. 26 letter.

Blake estimates that the credit unions have racked up at least $100,000 in costs so far and that the figure is expected to rise. The costs do not include expenses related to fraudulent charges made on compromised credit and debit cards, which are still unknown.

TJX declined to comment on the letter.

Meanwhile, Markey, the Malden Democrat who holds a senior position on the committee that oversees the Federal Trade Commission, believes the FTC should review TJX's data loss just as it probed similar cases at other companies.

"Every one of these breaches is an opportunity to learn about what went wrong and how to fix it," said Markey spokesman Israel Klein. "Congressman Markey believes the FTC should look at this just the way they have looked into other data breaches."

An FTC spokeswoman declined to comment on Markey's remarks or say whether the agency is pursuing the matter, citing confidentiality rules. But the agency has struck more than a dozen settlements with companies following data breaches.

The most extensive came a year ago when data provider ChoicePoint Inc. of Georgia agreed to pay $15 million over alleged violations in its security and record-handling procedures. In most other cases, the FTC has just required companies to improve security .

At the end of 2005, for instance, shoe discounter DSW Inc. of Ohio agreed to submit to technical audits for 20 years after hackers compromised the data of more than 1.4 million consumers.

A spokeswoman for TJX declined to comment on Markey's remarks. The Framingham headquarters of TJX is in Markey's district, and it is unusual for politicians to single out a local business for scrutiny.

Ed Mierzwinski, a director of consumer programs for US PIRG, the federation of state advocacy groups, said he welcomed Markey's comments and believes that the FTC will likely now act. "The message that The Hill is watching them always makes them do a better job," he said.

Jenn Abelson can be reached at abelson@globe.com, Ross Kerber can be reached at kerber@globe.com.