A computer backup tape with the account information of more than 200,000 Ameritrade Inc. clients has been lost.
A package of data backup tapes was damaged in transit in late February by a shipping company that isn't being named. Four of the tapes in the package disappeared after the package was damaged but three were later found by the shipper during a search of its facility. The fourth tape is still missing and is presumed to still be lost in the facility or to have been destroyed accidentally.
The reserve storage that was apparently lost or accidentally destroyed while being shipped had held account information for clients and former clients from 2001 to 2003, so the online investment brokerage had to notify the clients of a potential breach.
In contrast to many other companies that had lost clients' information Ameritrade tried to minimize the financial consequences of the incident. The Omaha-based company sent letters to its clients telling them of the incident and offering one free year of credit-protection services from Identity Track. Chantilly, Va.-based Identity Track monitors credit profiles and alerts clients to activity that may indicate identity theft (including recent inquiries, new accounts or address changes). Consumers can also access and review their credit reports.
The representative of Ameritrade Inc. said the company acted as quickly as possible after learning in late February that the tapes were missing. It took some time to work with the shipping vendor after the loss was discovered and to find those three tapes. More time elapsed as the search continued for the fourth tape.
The backup tapes weren't labeled with Ameritrade's name or logo or any other identifiable information. Although the data on the tapes was compressed and special equipment would be needed to read it, the information wasn't encrypted.
Under California law, which mandates that customers be told of potential data breaches, the company would have been required to notify about 175,000 of the affected former and current clients. But Ameritrade chose to send letters to all potentially affected clients.
It's not the first incident when private data has been lost while being shipped. In the end of February, 2005 Bank of America lost a "small" number of backup tapes with records detailing the financial information of 1,2 million government employees during the shipment to a backup centre. Also in the begging of May, 2005 Media conglomerate Time Warner announced that a contracted data storage firm it uses to store computer back-up tapes containing current and former employee information had lost a shipment en-route to its facility. As a result the personal data of as many as 600,000 current and former employees of the company may have been lost.
Р’В«Ameritrade has been providing brokerage services since 1975. The company has never had any problems with reputation and clients' trust, but recent incident with lost backup tape can cast shadow on Ameritrade's brand. Business should pay high emphasis on internal information security issues. Otherwise it can lose not just customers' private data, but clients themselvesР’В», — said Denis Zenkin, the Marketing Director of InfoWatch company.
Source: COMPUTERWORLD
