By Jay Fitzgerald
Boston Herald General Economics Reporter
Wednesday, April 25, 2007

The Massachusetts Bankers Association wants TJX Cos. to pay for the massive security breach that left more than 45.7 million credit and debit cards vulnerable to potential fraud.

The association, along with banking groups in Connecticut and Maine, plans to file a federal class-action lawsuit today against Framingham-based TJX for engaging in what the bankers groups argue was “negligent misrepresentation” and unfair trade practices by claiming its computer system was safe.

The association, which said it expects other banks and groups to join its suit, charged that TJX's system wasn't safe, as shown by its own acknowledgement in January that hackers may have swiped millions of card numbers in what some are calling the largest computer data theft in history.

“Suffice to say, we will be seeking damages in the tens of millions of dollars,” said MBA president Daniel Forte, adding banks lost money replacing cards and covering losses from unauthorized spending on stolen card accounts.

A spokesman for TJX, which operates the T.J.Maxx, Marshalls and other stores, said the company would not comment on pending or expected lawsuits. TJX has been hit with a number of lawsuits already over the data theft.

Jon Hurst, president of the Retailers Association of Massachusetts, blasted the planned suit by bankers, saying it was banks that created the entire “plastic payment” system in the first place.

Banks already charge customers hefty ATM and other banking fees in order to pay for fraud cases - and they even charge “interchange fees” that are supposed to help defray the cost of thefts, Hurst said.

“They're looking to collect money on multiple levels,” he said.

Banks filed a similar and largely unsuccesful suit againt BJ's Wholesale Club after that retailer also got nailed by cyber bandits several years ago. Forte said the new TJX suit will stand a better chance because it will stress unfair trade practice charges.  

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