By Elinor Mills
April 22, 2008
LendingTree on Monday told customers that their sensitive information
was leaked in a security breach and that it has sued three lending
companies as a result.
Several former employees of LendingTree are believed to have taken
company passwords and given them to a handful of lenders who then
accessed LendingTree customer data files, the company said.
The data includes customer names, Social Security numbers, addresses,
e-mail addresses, telephone numbers, and income and employment
information, but not credit card information, LendingTree said in an
e-mail to customers and on a frequently-asked-questions page on its Web
The outside lenders are believed to have accessed LendingTree customer
loan request forms between October 2006 and early 2008. The lenders then
tried to market loans to the customers, LendingTree says.
LendingTree's internal security uncovered the security breach and the
company quickly reported it to authorities and made several security
system changes. A LendingTree spokeswoman declined to say exactly when
the breach occurred, when it was discovered, or how many customers were
"We have no reason to believe any identity theft or fraudulent financial
activity resulted from this situation," the FAQ says. "You still might
want to get a free credit report and file a fraud alert with the credit
bureaus. When you get your credit report, look for any accounts you
didn't open and/or inquiries from creditors that you didn't initiate."
The e-mail to customers also advises that they have the right to obtain
a police report and may also request a security freeze on their credit
As a result of the breach, LendingTree has sued three California
lenders: Newport Lending Group and Sage Credit Company, both of Irvine,
and Home Loan Consultants of Newport Beach. None of the firms
immediately returned calls seeking comment.
LendingTree could also face lawsuits from its customers, as well as
sanctions from the U.S. Federal Trade Commission, particularly given the
potential for identity theft, according to Brian Cleary, vice president
of marketing at Aveksa, an enterprise security governance software
"Organizations have an obligation to protect sensitive customer
information like this," Cleary said. More than half of the data breaches
these days are due to insiders leaking the information, he added.
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