TJX Proposes One-Day Sale As Part Of Class Action Settlement

When TJX revealed earlier this year that they’d failed to keep safe over 45 million customer credit card accounts, they were hit with both consumer and bank class action lawsuits. Now they’ve submitted a proposed settlement for the consumer class action suit that includes a strange, somewhat insulting offer: a “one-day sale” for victims of the theft. Attorneys general from eight states have filed an objection against the proposal, citing that even if it’s a well-intentioned goodwill gesture, it doesn’t belong as part of any official, legal settlement, which should be designed to benefit the victims rather than the retailer.

In the complaint, Massachusetts Attorney General Martha Coakley argues that a sales event is not a settlement, and that the lawyers for the consumers shouldn’t be able to reap additional fees from the addition of a sales event.

We are unaware of precedent in which a special event, or any type of sale open to the general public, has been deemed a benefit of a class-action settlement and this court should avoid that precedent. We believe this aspect of the proposed settlement demeans the class-action process, which can be used as a meaningful tool to protect consumers.

“The special event is nothing more than a retail sale, which would primarily benefit the defendant, TJX Companies. If deemed a benefit to the class, the retail sale also presumably would benefit class action counsel, whose fees would be impacted by a nominally higher valued settlement,” Coakley wrote. “It is unclear what benefit, if any, the class gains from a retail sale that is open to the general public. TJX should not inure the good will of this court or the public for a sale that enhances its bottom line, nor should the class’s attorneys reap large fees for an unquantifiable and dubious benefit. Here, class action counsel anticipates receiving fees of $6.5 million, based, at least in part, on an unquantifiable benefit to the class from the special event. This represents a tremendous amount of money to the extent it is linked to the special event, or vouchers.”

“Massachusetts AG Slams TJX Consumer Settlement Sale” [eWeek via The Register]
(Photo: Getty)

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  1. RossC says:

    Doesn’t sound like that bad of an idea. Lawyers are pissed because in effect the money will be made directly to the consumers affected and not in a check where they can take a huge cut.

  2. RossC says:

    Sorry, didn’t read the whole article. Lawyers benefit, belay my last.

  3. BigNutty says:

    TJX is really trying to pull a fast one on this. If the court allows this settlement the class action lawsuit would no longer hold companies accountable in a serious way.

  4. mexifelio says:

    is TJX the same as TJMax? Why would anyone EVER step foot into, let alone purchase anything from a store that did this with their personal information? How many chances should a store get to redeem itself after a blunder like this? Also, if this does come to fruition, the phrase “cash only” comes to mind.

  5. Beerad says:

    @RossC: “Belay your last stereotype” you mean. Yes, under the proposed settlement, the class action lawyers would benefit. The defending lawyers would not especially, although it would be a good result for them since their client would rack up sales. And those who are complaining are also lawyers, state attorney generals whose job is to largely look out for “the public”. But hey, thanks for painting us all with the same “greedy plaintiff class-action representin’ counsel” brush!

  6. esqdork says:

    You have to give TX credit (pun intended) for their cajones. They compromised their customers’ credit card info because they kept the data longer than they should have and had inadequate electronic security (but in fairness to them, it is a prevalent problem with retailers) and now they want the customers to shop with them again??

  7. bohemian says:

    I don’t see this as anywhere near proper compensation. My bank canceled my card and I didn’t know it. Oh the fun of having all of my automatic bill payments tank and having my credit card tilt at Target on payday. That’s nothing compared to the people that had to deal with charges on their cards or having their checking accounts drained and trying to straighten that out.

    If you want more info on the class action
    [www.bergermontague.com]

  8. mgyqmb says:

    Isn’t this the same thing the Aquadots people are trying to pull, too? The ol’ “sorry we wronged you, but here’s something that doesn’t compensate you and makes us more money” gag.

  9. 3drage says:

    Ooh, I’d love to swipe my credit card into TJX’s stores to get some lovely products. I feel so secure with them having my personal information!

  10. parad0x360 says:

    I would imagine this one day sale for people who got hit would mean they could buy things for cost which would mean TJX loses no money whatsoever?

    Good idea TJX, now add in a very large sum of money on top of it and you have a deal.

  11. marsneedsrabbits says:

    Yeah… so their punishment is to have a sale and make more money?
    Is there a briar patch around here anywhere?
    Try again.

  12. dirtleg says:

    What a big hearted bunch. Taking one for the good of the consumer by shrinking their profit margin for one day. Maybe if the let us all charge it to the CEO’s credit card. That would at least be poetic justice of some sort.
    Of course, if this idea flies said CEO will probably be in for a nice bonus at the end of the year.

  13. XTC46 says:

    Blockbuster did one better. When they got sued for having “late fees” they paid out the class action in store credit. How awesome is that? you figure their profit margin on most stuff is huge, so its like they paid nothing.

  14. sharonlives says:

    what’s the deal with this class action settlement anyway? i’m pretty sure TJX was the reason i had to get a new credit card last year. amex alerted me to some fraudulent charges and canceled the card for me right away. (thanks amex!) i had to change everything over to a new card which was a pain. shouldn’t i get something out of this deal? why do i have the feeling that i’ll get zippo?

  15. missdona says:

    @sharonlives: Because Class Action suits only benefit attorneys.

  16. MeOhMy says:

    @Beerad: Hilarious. I’d be impressed if you could name JUST ONE major class action lawsuit in which the “injured” class recovered anything more than token damages while lawyers on both sides of the aisle were racking up the billable hours. I’ve actually taken to mailing in objections when I get these notices…not that it ever does any good.

    I bet in their proposed settlement they also specify that they “admit no wrongdoing.”

  17. catchthefever says:

    Citibank canceled my card without even telling me, all because of TJX’s security breach. Left me in a world of hurt, having to use my debit card for a hotel stay.

    I’d rather receive a $5 check that some piss-ant “special sale” so my new credit card number can be stolen.

  18. stanfrombrooklyn says:

    Class action lawsuits are always a joke. They are designed to punish the offenders. They don’t. They’re supposed to help the victims. They don’t. (Oh wait..I did get $2.50 a few years ago from Microsoft.). They only help lawyers on both sides make tons and tons of money so they can fill up their coffers and file more class action lawsuits. And the process repeats.

  19. darkclawsofchaos says:

    yay, I lost $5000 in identity theft, but it okay as long as I get $5 of that cute t-shirt…

  20. loueloui says:

    I got a speeding ticket a while back. Maybe I should have offered the judge the opportunity to ride shotgun while I did the 1/4 mile at a track.

  21. scoosdad says:

    @xtc46: Epson did the same thing with the settlement to the class action over their inkjet ink. Gave everyone a $45 credit good only at the Epson online store. *yawn*

    I’m confused.. how do the attorneys for the class benefit financially out of an in-store sales event? Do they get a cut of the sales, or do they get their percentage boatload of cash anyway? (and please don’t berate me for stereotyping attorneys, my brother is one…the shoe fits…)

  22. mac-phisto says:

    oh, i don’t know. i think the judge should entertain a one-day sale as part of the settlement.

    a one-day five finger discount sale.

  23. aikoto says:

    This is as bad as offering credit monitoring. Instead of helping you, we’re going to give you a trial to a complete ripoff that we get for free from the credit reporting companies anyway.

  24. Beerad says:

    @Troy F.: I’m glad I could entertain you, but you seem easily amused so it doesn’t mean much. I wasn’t defending class action lawsuits in general, merely pointing out that the “good guys” in the article were lawyers too. Reading comprehension ftw.

  25. SadSam says:

    The whole idea of a class action law suit is to allow consumers whose damages are so little that there would be no point in bringing their own law suit to join together to punish the company so they don’t make the same mistake again. Yes only lawyers benefit but if the company is punished enough there is the hope the company lerns is lesson. It would be great if we all went to small claims court and sued TJ Maxx individually, we would make more money and cut out the lawyers.

  26. Allisonaxe says:

    this reminds me of what Nintendo did to settle their antitrust suit back in the 80′s: they gave out discount coupons, effectively meaning that if you want to benefit from Nintendo’s settlement, you still needed to buy something from them.