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INFO ON 3.9 MILLION CITIGROUP CUSTOMERS LOST

Computer tapes with information about consumer lending lost by UPS in transit to credit bureau.

Posted on June 6, 2005

      Citigroup said Monday that personal information on 3.9 million consumer lending customers was lost by UPS while in transit to a credit bureau - the biggest breach of customer or employee data reported so far.

      Citigroup did not immediately return a call to CNN seeking comment, but it sent its customers a letter saying the tapes included Social Security numbers, names, account history and loan information about retail customers, and former customers, in the United States.

      The letter added that the company had no reason to believe the information has been used inappropriately and that it has received no reports of unauthorized activity.

      "We deeply regret this incident, which occurred in spite of the enhanced security procedures we require of our couriers," Kevin Kessinger, executive vice president of Citigroup (Research), said in a statement. "Beginning in July, this data will be sent electronically in encrypted form," said Kessinger, who heads the company's consumer finance business in North America,

      In its letter, Citigroup said told the people affected there "little risk of your account being compromised because you have already received your loan.

      "No additional credit may be obtained from CitiFinancial without your prior approval, either by initiating a new application or by providing positive proof of identification," the nation's No. 1 financial services company said in the letter.

      The tapes contained information about retail customers in the United States as well as some customers with closed retail services accounts. Auto loan and mortgage customers were not affected, the New York-based bank said.

      United Parcel Service (down $0.22 to $72.60, Research) confirmed it lost a package shipped by Citigroup containing computer tapes.

      Norman Black, UPS Media Relations Manager, told CNN that UPS "sincerely regrets the loss of this one package."

      He said UPS and Citigroup are launching internal investigations, adding there was no evidence of theft or fraudulent activity.

      Black could not provide detailed statistics on UPS's reliability rate but said it's "close to 100 percent." UPS ships some 14 million packages a day.

      In recent months, a number of big banks, retailers and other companies said information on customers or employees, including credit-card information, was compromised.

      Bank of America (unchanged at $45.78, Research) said in late February that it lost computer backup tapes containing personal information on about 1.2 million charge cards.

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