By James Schlett
August 29, 2008
GLENVILLE - TrustCo Bank Corp is resorting to litigation to recoup costs
it incurred after reissuing thousands of credit cards to customers
affected by the security breach at the parent company of the T.J. Maxx
and Marshalls chains.
The Glenville bank holding company last month filed a lawsuit in
Schenectady County Supreme Court against TJX Companies, shedding light
on the financial burdens hackers are indirectly imposing on local banks
and credit unions. The TrustCo Bank parent is suing the Framingham,
Mass.-based TJX to recover the costs stemming from the cancellation and
reissuance of MasterCard debit cards to affected customers. The breach,
which TJX discovered in mid-December 2006, ended up costing the bank up
to $20 per affected account.
The suit highlights the challenges financial institutions face as they
try to cope with increasingly daring hackers who steal customer
information from retailers. After the Scarborough, Maine-based Hannaford
Bros Co. supermarket chain became a victim of hackers, TrustCo in March
reissued 13,000 cards.
"TrustCo will continue to suffer monetary harm for the costs and
expenses ... as additional fraud alerts and fraud charges are occurring
and are discovered," the bank's suit states.
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