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Two Banks Sued in Security Breach

In response to a security breach that occurred in February, eight individual and business account holders of People’s United Bank have filed a class-action lawsuit against People’s and one of its vendors, The Bank of New York Mellon.

While in the process of going public in 2007, People’s gave a tape containing confidential information such as Social Security and bank account numbers to BNY Mellon, which was hired to screen depositors to make sure they met all requirements for purchasing stock as part of the conversion.

On Feb. 27, BNY Mellon gave the tape, along with nine other tapes, to a storage firm called Archive Systems Inc., to transport to a storage facility. But when the truck arrived at the storage facility, the tape was missing.

The suit, filed in Superior Court in Bridgeport by New Haven attorney Michael A. Stratton, claims People’s also shared depositors’ account balances, net worth and financial transaction histories — “Basically, everything an identity thief would need to wreak havoc,” Stratton said Tuesday.

The plaintiffs named in the civil summons filed Friday are Megan McLoughlin of Bridgeport, Jerome Larracuente of Stratford, Robert Acampora Jr. of Guilford, Jonathan Vaast of Fairfield, Audrey Felsen of Trumbull, Heather Craig of Greenwich, Vanessa Biagioli of Hamden and Daphne DaRosa of Bridgeport.

Stratton said more customers have called or sent e-mails about joining the case. He expects at least 40 plaintiffs, but the number could go as high as all of the bank’s nearly 500,000 customers, he said.

“As a result of this negligence, (People’s) and Mellon have failed to honor their obligations to the plaintiffs and all other customers and said obligations were part of parcel of the services (People’s) was to provide in exchange for the charging of account fees. These account fees were improperly charged,” the suit claims.

The lawsuit did not disclose a specific monetary amount in damages being sought, except a standard statement that the total is expected to exceed $15,000, not including costs such as attorney’s fees. Stratton said the plaintiffs want up to eight years of free credit monitoring by all three credit rating agencies, identity theft protection insurance and punitive damages.

People’s declined to comment on pending litigation Tuesday, but has said previously that the information was given to BNY Mellon in an encrypted format. People’s also said last week — when news of the security breach was made public — that it had not been informed by BNY Mellon that the tape went missing until the last couple of weeks.

BNY Mellon spokesman Ron Sommer said the company had not yet been formally served with the complaint as of Tuesday and could not comment. “In a broader context, it’s worth noting that we continue to have no reason to think that the data on the missing tapes has been accessed or used inappropriately,” Sommer said.
The Bank of New York Mellon did not respond to a Register inquiry.

Gov. M. Jodi Rell last week directed state Consumer Protection Commissioner Jerry Farrell Jr. to issue subpoenas to People’s, BNY Mellon, Webster Bank and Wachovia Corp. But Webster announced Friday that no information related to its customers was contained on the missing tape.

State Attorney General Richard Blumenthal has also requested information from BNY Mellon by May 31.