TJ Maxx Breach: How To Value Damage to CUs’ Reputation

FRAMINGHAM, Mass. – The Massachusetts CU League is expected as soon as today to sign on to a lawsuit filed yesterday by the bankers asking that TJX pay expenses for the hundreds of credit unions and banks harmed by last year’s data breach at the nation’s largest discount store chain. James Blake, president of HarborOne CU and chairman of the Massachusetts League, who was burned in earlier breaches at BJ Wholesales and DSW Shoes, said he will bring a new claim into the civil litigation–claims for reimbursement for the damage done to his credit union’s reputation. “No one’s put a figure on it, but we’re going to,” Blake told The Credit Union Journal yesterday. Blake said his credit union’s reaction to protect members–the recall of cards–not only cost HarborOne more than $100,000 in the TJX case, but untold losses to its reputation. Like most credit unions, HarborOne routinely recalls cards that may have information stolen, even if there have been no incidents of fraud. But this approach, he lamented, serves to scare members and potential members and put his $1.4 billion credit union in a bad light publicly, as the average consumer does not know who is responsible for the repeated cards recalls. In a suit filed yesterday in federal court in Boston, the banker groups from Massachusetts, Maine and Connecticut claim damages from TXX, the parent of TX Maxx, Marshalls, HomeGoods and several other chains, in the “tens of millions of dollars.” Dan Egan, president of the Massachusetts CU League said cards at as many as 60 credit unions throughout the three states he represents (New Hampshire and Rhode Island and Massachusetts), and countless others around the country accrued costs by notifying members and recalling and reissuing cards.