Banks Can Sue BJ’s Over Stolen Credit-Card Data

PHILADELPHIA (CN) - Sovereign Bank and the Pennsylvania State Employees Credit Union have the right to sue BJ's Wholesale Club after credit-card information was stolen, the 3rd Circuit ruled.

The district court had ruled in favor of the wholesale club, but Judge McKee found that the banks had proven BJ's made a commitment to protect credit-card information.

One of the stipulations of the Cardholder Information Security Program is that stores are prohibited from storing the data on the card's magnetic stripe after a transaction.

The banks had to issue thousands of new credit cards after the information was compromised.

Because the banks raised an issue of material fact, McKee overturned the district court's summary judgment for BJ's.

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