Data breach at TJX leads to fraudulent card use

26.01.2007
Credit and debit cards that were compromised in the recently disclosed security breach at TJX Companies Inc. are being fraudulently used in several states in the U.S. and even overseas, the Massachusetts Bankers Association (MBA) said Thursday.

The association, which represents 205 banks in the commonwealth, said that the compromised cards have so far been used to make fraudulent purchases in Georgia, Florida, Louisiana, Hong Kong and Sweden.

"TJX has not made clear the number of cards involved in the breach, but Massachusetts banks continue to receive information from the card companies about cards that have been exposed," the MBA said in a statement. To date, about 60 banks have reported on cards that were compromised in the breach. The number is expected to rise because fewer than half of the member banks have reported in so far.

TJX last week disclosed that somebody had illegally accessed one of its systems and made off with card data belonging to an unspecified number of customers in the U.S., Canada, Puerto Rico, the U.K. and Ireland. The retailer, which owns chains such as TJ Maxx, Marshalls and Bob's Stores, didn't disclose the number of shoppers that may have been affected by the breach, which took place in May 2006 but wasn't discovered until last month.

In its statement Thursday, the MBA said that it is "strongly supporting" legislation that would require credit card companies, such as MasterCard International Inc. and Visa U.S.A. Inc., to quickly disclose the source of a retail breach. Typically, credit card companies have not disclosed this information to card-issuing banks when informing them of a security incident.

"By not disclosing which firm caused the breach, or quickly disclosing it, consumers are needlessly troubled and might feel compelled to take unwarranted action if they're left in the dark," MBA CEO Daniel Forte said in the statement. As a result, it is crucial for credit card companies to identify the source of a breach and whether they should be held liable -- especially if the retailer was storing information in violation of the Payment Card Industry data security standard, he said.