TJX Hacking Cost Outnumber the Q2 Profit of 2008
TJX Cos. Inc. has been charged $118 Million for a security breach which outnumbered the company's high second-quarter earnings of 2008, reported on 14th August'07. TJX is a Massachusetts-based off-price retailer. Hack in security breaches caused a drop of good of 57% to $59 Million in the Q2 of 2008. It would raise the total charge to $196 Million, or if calculated after taxes, then $118 Million during the same period, according to Framingham.
Class action suits were filed against the company by many states, including Massachusetts, on account of identity thefts that started way back in 2003. Customer information have been stolen from the TJX Cos. computers and the hackers have managed to get away with over 45.6 Million debit and credit cards' information, the cost of which has hiked to over $255 Million. The incurred cost also including repairing the company's computer system, dealing with lawsuits, investigations, and other claims stemming from the breach that has been going on from more than a year before discovering the problem in December 2006.
The hacking of TJX began at a Marshalls clothing store (it is near St. Paul in Minnesota), by exploiting Wi-Fi weaknesses. The thieves used a telescope-shaped antenna and a laptop at the store to obtain the data transferred between the hand-held-price checking devices, the store's computers and cash registers. It ultimately led them to the central database where they began to rob the system of crucial consumer data repetitively, as believed by the Minnesota Investigators.
TJX is surrounded by disputes with many credit and debit card issuers, few of which are replacing the customers' cards with new numbers even after eight months of the disclosed theft. Carol Meyrowitz, Chief executive, TJX, said that they have been working to strengthen the company's computer security systems and have been learning about the increasing computer hackings, reported by Boston on 15th August 2007.
Bill Bartow, the Vice President of marketing at security vendor Tizor inc. in Maynard, stated that the incident is an eye-opener about the negligence of the improper working of the current security systems, according to the news in computerworld published on 15th August 2007. He also believes that the current cost estimated by TJX about the intrusion could rise even higher.
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» SPAMfighter News - 29-08-2007