Attorney General, DCP Announce $350,000 Countrywide Data Breach Settlement, Reimbursement To Nearly 30,000 CT Consumers For Credit Freezes

January 29, 2009

            Attorney General Richard Blumenthal and Department of Consumer Protection (DCP) Commissioner Jerry Farrell, Jr. today announced that the new owners of Countrywide Financial Corp. will pay the state $350,000 and reimburse for credit freezes nearly 30,000 Connecticut residents affected by a massive data breach.            

            Upon submitting to Blumenthal’s office written proof of payment for a freeze, consumers will be reimbursed by Bank of America, which bought Countrywide last year. Included in the reimbursement will be the cost of un-freezing credit. Bank of America will initially provide $25,000 for the fund, more if necessary, Blumenthal said.

            A credit freeze -- a block by credit rating agencies on all credit under a consumer’s name -- is one of the most effective ways to prevent identity theft. 

            A former Countrywide employee allegedly sold private financial data, including Social Security numbers, of more than 2 million consumers nationwide for thousands of dollars. The data breach came to light last August and has resulted in at least two arrests. A federal investigation is ongoing.

“This agreement will help shield almost 30,000 Connecticut consumers from the ravages and ruin of identity theft,” Blumenthal said. “Our settlement provides consumers with powerful protection against identity theft -- freezes that foil thieves by blocking new credit in a consumer’s name.  

“Countrywide’s appalling failure to properly protect sensitive customer data allowed the sale of personal financial information -- including Social Security numbers -- to the highest bidder. This data breach -- a crooked employee collaborating with identity thieves -- was inexcusable and unforgiveable, a nightmare scenario in real life.

“Bank of America inherited this horror and did the right thing, agreeing to shelter and safeguard Countrywide costumers from identity theft and financial loss.

“My office will continue to forcefully intervene in data breaches, compelling protection of consumers from financial loss and turmoil, as well as reforms to make future data losses less likely.”

The nation’s three credit bureaus -- Experian, Equifax and TransUnion --charge about $10 per credit freeze and un-freeze. Bank of America will reimburse for freezes and unfreezes at all three, meaning each consumer will receive about $60.

The settlement also requires Countrywide to adopt best practices for data management and security and assure Connecticut residents receive all the benefits of any settlements of private class action lawsuits above and beyond today’s agreement.

Last August, Bank of America also agreed to provide affected consumers with $25,000 of identity theft insurance and credit monitoring for two years.

Blumenthal’s office and DCP will turn over the $350,000 to the state’s General Fund.

To receive reimbursement, consumers should send proof of their credit freezes and un-freezes to:

The Attorney General’s Office

          110 Sherman St.

Hartford, Ct. 06105

Att: Countrywide credit freeze

Consumers with questions should contact the Attorney General’s Office at (860) 808-5400.