Mortgage Data on Two Million People Lost

I had heard this news the other day and assumed everyone was up to speed on it, but a note from a reader (thanks, Dan) suggested I share it with everyone since blog coverage seemed light. So here's the bottom line from MSNBC:

A subsidiary of LaSalle Bank Corp. said Friday a tape containing information of about 2 million residential mortgage customers around the country was lost as it was being transported from Chicago to Texas.

ABN AMRO Mortgage Group Inc. said that it has had no indication the information was misused in any way, but that it is notifying residential mortgage customers and has arranged for them to enroll in a credit monitoring service for 90 days at no cost.

Data on the tape include residential mortgage customer names, their social security numbers, payment histories and account information, according to ABN AMRO. LaSalle Bank spokesman Shawn Platt also said the tape is not something a person could take home and look at on a computer.

According to the company, a package containing the tape was picked up at its data processing center in Chicago by express mail company DHL on Nov. 18. But the tape never reached its destination — a credit bureau facility in Allen, Texas.

A few thoughts:

1. How does this happen???!!! Two million people impacted?! This is simply criminal. AMN AMRO and/or DHL needs to compensate the people impacted if, for nothing else, the fear of potential identity theft. It's simply careless and there's no reason for it.

2. This sort of loss seems to be more and more common. We need to fix the system somehow. I'm generally not a proponent of legislating penalties against corporations for this sort of stuff (my feeling is that the market will handle it as consumers flee companies that allow this to happen), but it appears that companies are not taking the issue seriously.

3. Thankfully, I don't do business with ABN AMRO. If I did, I'd be moving as soon as possible.

Update: The tapes have been found.

Comments

[Dan]

My wife and I were among the two million customers whose data were lost. Shortly after sending this to FMF, I checked ABN AMRO's site (www.info.mortgage.com) and the missing data had been found. But needless to say, we will still be taking advantage of their free credit-monitoring offer. (And as a sidenote, TrueCredit is positively swamped today as a result of all this, so be prepared to wait awhile if you call them.)

Personally, I don't see ABN AMRO suffering from this too much. Especially now that the data has been found, the story will go away. The switching costs for products like mortgages and loans are too high, and the people who even noticed probably won't remember when it comes time to refinance or move.

This is the second time this has happened to my wife and me in the last three or four months. Our student loan company lost our data too. It's scary stuff...vigilance is the only way to protect yourself.

[Pat]

Here's a website that talks about some of LaSalle Bank's other troubles...

http://www.notsocommoncents.com/index.php?mode=viewid&post_id=216

[jim]

I'm surprised that the credit monitoring offer was only for 90 days. If I had the data of 2mil people, especially mortgages which aren't exactly cheap to move, I could wait 90 days before ripping people off.

[jamesvanderzanden]

What people do not realize is that this is not "happening more and more lately...", but this has always happened, but the legislation or oversight was never in place to require companies to report it. Given the hype about identity theft today, everyone freaks out when something like this happens. I am not playing down the potential risks here, but just realize that this is a case where customers are not really at risk. Most cases of identity theft and hacking into company systems occur within the organization itself, not from outsiders!

[FMF]

It could be happening at the same rate (I'm not saying it is or isn't, what I said was that it SEEMS like it is), but there's no denying that identity theft is a major crime these days where in years past (say 5-10 years ago), it wasn't nearly as big an issue.

And while most cases could (not saying they do) come from elsewhere, the fact that 2 million records were lost in not something to be glossed over.

[Jeremy]

I agree with Pat that 90 days is not much. And it's not really the mortgage info that's valuable, but the underlying personal data (name, address, ssn, employer, etc...) Loss of that info could cause some serious headaches for customers.