By Brian Fonseca
May 30, 2008
Bank of New York Mellon Corp. officials last week confirmed that a box
of unencrypted data storage tapes holding personal information of more
than 4.5 million individuals was lost more than three months ago by a
third-party vendor during transport to an off-site facility.
The bank informed the Connecticut State Attorney General's Office that
the tapes belonging to its BNY Mellon Shareowner Services division were
lost in transport by off-site storage firm Archive America on Feb. 27.
The missing backup tapes include names, birth dates, Social Security
numbers, and other information from customers of BNY Mellon and the
People's United Bank in Bridgeport, Conn., according to a statement by
Connecticut Attorney General Richard Blumenthal.
Archive America refused to comment about the missing backup tape, citing
confidentiality agreements. A People's United Bank spokesman could not
be reached for comment.
BNY Mellon Shareowner Services, which includes handling employee stock
option plans, said that it has begun notifying affected clients. It
contended that none of the unencrypted data has been accessed or used.
"We'd like to provide people with a more current characterization [of
what happened], but we are not yet in a position to make that
available," said BNY Mellon spokesman Ron Sommer. "Our intention is to
make it available as soon as we can."
Blumenthal said that the bank's offer of a year of freed credit
monitoring to those affected by the breach is "grossly inadequate." He
also slammed the bank for not promptly notifying customers of the
"The loss of this tape . so far unrecovered and unremedied . is
inexplicable and unacceptable," wrote Blumenthal. "I am especially
concerned by the delay in informing customers, possibly heightening the
risks of wrongdoing."
Blumenthal said that he is working with the New York and New Jersey
attorneys general and the Connecticut Department of Consumer Protection
to investigate the breach. Further, he said that he is pressing the bank
to explain how some backup tapes disappeared while others on the same
van arrived intact at the Archive America facility.
This week, a lawyer representing 40 affected individuals filed a
class-action lawsuit against the New York bank in Connecticut Superior
Court. Attorney Michael Stratton, who represents the plaintiffs, said he
is seeking up to seven years of free credit monitoring and credit
insurance for customers, along with unspecified damages.
"It's inconceivable to me that you have unencrypted data on tapes being
transported and stored. I can't imagine why you wouldn't have a
sophisticated encryption program to make it virtually impossible to
break the code even if they were to become lost," remarked Stratton.
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