Bank of N.Y. Works with Connecticut on Security Breach

May 23, 2008

Connecticut Attorney General Richard Blumenthal asked the Bank of New York Mellon Wednesday to explain how it lost computer tapes containing the information of more than 4 million customers.

The bank told the state that a box with back up bank tapes were lost in February from a truck that transports and stores tapes in its storage facility, Blumenthal said. The tapes contained Social Security numbers, names and addresses and possibly bank account numbers and balances, he said.

“This security breach seems highly dangerous, indeed possibly devastating in light of the identity theft threat,” Blumenthal wrote to Stephen Dolmatch, general counsel of Bank of New York Mellon Shareowner Services.

Ron Sommer, a spokesman for the Bank of New York Mellon Corp. in Pittsburgh, said officials there are cooperating with Blumenthal. He said the bank has been notifying customers and is offering those affected one year of free credit monitoring. It has also posted information about the breach on its Web site and has set up a toll-free number to respond to questions.

“Shareowner Services is monitoring shareowner account activity on its system, and to date these efforts have shown no indication of data misuse,” the bank said in a written statement.

Those affected by the loss of the data include customers at People’s United Bank of Bridgeport. Brent DiGiorgio, spokesman for People’s United Bank, said the Bank of New York helped the Bridgeport bank convert from a depositor-owned bank to a publicly owned stock company.

People’s Bank gave information about its customers in 2007 as the Bank of New York tabulated votes on the changeover and processed stock order requests, DiGiorgio said. People’s Bank transmitted secure information, he said.

People’s Bank has not yet received information about affected customers from the Bank of New York, DiGiorgio said.

John Milgrim, a spokesman for New York Attorney General Andrew Cuomo, said it appears that hundreds of thousands of New Yorkers also were affected by the breach.

“The bank will have to _ as fast as possible _ notify any customers that would be affected,” he said.

The bank notified Connecticut customers of the breach six weeks ago, Blumenthal said. He called the bank’s response inadequate.

“Neither People’s nor its customers were promptly notified,” he said in his letter. “Even now, many may be in the dark.”

Blumenthal asked Dolmatch to provide information on what Bank of New York Mellon did before the security breach to safeguard sensitive information of the type contained on the back up tapes and how the bank first learned of the loss.

He also wants the bank to identify the number of Connecticut bank customers who may be affected, what is being done to track down and retrieve missing backup tapes and a plan by the bank to prevent such data losses in the future.

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