Bridgeport-based People’s Bank has assured customers that their recently lost personal information should not result in any problems with their banking and checking accounts.
Bridgeport-based People’s Bank last week was notifying customers by mail and providing them with free credit monitoring services after a tape containing the personal information of 90,000 customers – including their Social Security numbers – was lost en route to a credit reporting bureau.
At press time, bank officials said they did not believe the data had been used inappropriately, and told customers the computer tape containing the data cannot be read without sophisticated mainframe equipment and software.
The tape contained the personal information of People’s customers – some of whom are also bank employees – who use the overdraft protection with their personal checking accounts, but did not affect any other accounts.
The state Department of Banking last week issued an advisory about the loss.
“This is an isolated incident,” said Banking Commissioner John P. Burke. “People’s Bank has been working with their staff and the Banking Department to make sure that all customer information remains safe and secure.”
According to the bank, the practice of shipping information overnight to credit reporting bureaus is common in the industry. But after a string of previous similar incidents has plagued financial services companies, People’s reconsidered its practices and started a project to send all personal information to credit bureaus in an electronic, encrypted format. The new practice is scheduled to start this month.
The bank learned the tape was lost in late December when it was transported by UPS from the bank’s Bridgeport office to Trans-Union, a credit reporting bureau. UPS is investigating, spokeswoman Susan Rosenberg told the Associated Press.
The bank searched for the tape and started notifying customers after ensuring it could not be found. In addition to Social Security numbers, the tape contained names, addresses and checking account numbers.
‘Utmost Importance’
People’s assured customers that there was no need to close their accounts. The information on the tape is not sufficient to allow unauthorized users to gain access to customers’ accounts at People’s, according to the bank. The tape did not contain information on checking account balances, debit card numbers, personal identification numbers or birth dates.
“Our customers’ privacy is of the utmost importance to us and we take our responsibility to safeguard personal information very seriously,” said Bryan Huebner, executive vice president of Consumer Financial Services at People’s, in a prepared statement. “While we consider misuse of the personal information to be highly unlikely as a result of this incident, we deeply apologize for any concerns this incident may cause our customers.”
The bank also advised customers to place “an initial, free fraud alert” on their credit line, as the information contained on the tape could be used for fraudulent activity such as the opening of a new line of credit. The fraud alert ensures that creditors are instructed to get a customer’s authorization before opening a new account. People’s also advised customers to review their credit report.
According to John Carusone, president of the Hartford-based Bank Analysis Center, studies show that more than half of the American public are concerned about identity theft.
“This is a source of continuing concern,” he said. “I think People’s can recover from [this incident], but the American banking public is highly sensitized to [identity theft] at this point. The banking public is not going to blame UPS.”
As a result, Carusone noted, people will gravitate toward institutions with demonstrable evidence of greater security precautions. He said that Bank of America, for one, recently upgraded security.
Some institutions with big market share will use their security for competitive differentiation, he added.
Similar incidents have happened around the country in the last few months, affecting millions of consumers.
Last month, a subsidiary of LaSalle Bank Corp. said a tape containing information about 2 million residential mortgage customers around the country was lost as it was being transported from Chicago to Texas, according to the AP.
Citigroup Inc. told almost 4 million U.S. customers in June of last year that computer tapes containing information about their accounts like Social Security numbers and payment histories had been lost. That incident also involved UPS in transit to a credit bureau, according to the AP.
In May, media and entertainment company Time Warner Inc. said computer backup tapes containing data on 600,000 individuals were lost by an outside data storage firm.
In April, Ameritrade Holding Corp., a leading online discount broker, said it had informed some 200,000 current and former customers that a backup computer tape with personal information had been lost.
