[Clips] Citigroup Says Data Lost On 3.9 Million Customers

[R.A. Hettinga]

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Date: Mon, 6 Jun 2005 17:44:44 -0400
To: Philodox Clips List <clips at philodox.com>
From: "R.A. Hettinga" <rah at shipwright.com>
Subject: [Clips] Citigroup Says Data Lost On 3.9 Million Customers
Reply-To: rah at philodox.com
Sender: clips-bounces at philodox.com

<http://online.wsj.com/article_print/0,,SB111807147451351811,00.html>

The Wall Street Journal

 June 6, 2005 3:52 p.m. EDT
 MARKETS

Citigroup Says Data Lost
 On 3.9 Million Customers

A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
June 6, 2005 3:52 p.m.


Citigroup Inc. said that computer tapes containing personal information on
about 3.9 million customers were lost by United Parcel Service Inc. while
in transit to a credit-reporting bureau.

The tapes contained names, Social Security numbers, account numbers and
payment history of CitiFinancial customers in the U.S., as well as clients
with closed accounts from its CitiFinancial retail-services unit. The tapes
didn't include any customer information from the New York financial-service
giant's auto, mortgage or any other Citigroup business, or its
CitiFinancial customers in Canada or Puerto Rico, the company said.

"There is little risk of the accounts being compromised because customers
have already received their loans, and no additional credit may be obtained
from CitiFinancial without prior approval of our customers, either by
initiating a new application or by providing positive proof of
identification," said Kevin Kessinger, executive vice president of
Citigroup's global consumer group, in a statement. Beginning in July, this
data will be transmitted electronically in encrypted form, he said.

"The likelihood of having the information compromised is very remote given
the type of equipment that is required to read it," Debby Hopkins,
Citigroup's chief operations and technology officer, said in an interview.
"Additionally, the information is not in a format that an untrained eye
would even know what to look for."

The tapes were lost during a routine shipment from a data center in
Weehawken, N.J., to a credit-reporting bureau in Texas. UPS confirmed that
it had misplaced one box containing the tapes. "We sincerely regret that
we've been unable to find this missing package," says Norman Black, a
spokesman for UPS in Atlanta. "We have conducted an exhaustive search and
there is no evidence or indication that it was stolen."

Citigroup began a companywide effort last year to eliminate the need to
physically ship data tapes. The bank similarly lost a batch of tapes last
summer in Singapore when a vendor didn't follow their prescribed policy.

Citigroup isn't alone. Time Warner Inc. and Ameritrade Holding Corp. both
recently had to notify customers that their personal information had been
lost in transit.

Meanwhile, Bank of America Corp. and Wachovia Corp., along with other major
banks, recently notified more than 100,000 customers that their accounts
and personal information may be at risk after former bank employees'
allegedly stole customers' private information. Separately, Bank of America
also lost computer backup tapes containing names and Social Security
numbers on about 1.2 million federal-government charge cards.

In all, millions of individuals have been affected. Most organizations have
been encouraging individuals to call credit-reporting agencies and put
fraud alerts on their files, though some companies have offered free
credit-report monitoring services for a limited time. Citigroup is offering
affected customers free credit monitoring for 90 days.

The latest breach highlights the vulnerability of corporate data-handling
procedures. While some of the recent data losses have been the result of
break-ins by computer hackers, the loss of computer tapes, as was the case
with Bank of America and Time Warner, reveals gaps in trucking, air
transport and other traditional logistical systems.


-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'
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-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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