Software firm loses computer loaded with personal details of about 500K in NY

July 21, 2006

By John Riley, Newsday Staff Writer,0,4389008.story?coll=ny-top-headlines

More than a half-million New Yorkers who have made claims to a special workers' compensation fund have been notified that a Chicago-based claims-management software firm has lost track of a personal computer containing their private data, including Social Security numbers.

The company, CS Stars, a subsidiary of insurance giant Marsh Inc., lost track of the computer while installing claims-management software for the Special Funds Conservation Committee, a private insurer-and-employer group that handles two particular types of workers' comp claims under New York State law.

The company has called in the FBI to investigate the May 9 disappearance of the computer, and in a letter dated July 18 promised New Yorkers whose data were lost that it would provide free credit monitoring for the next year to nip any possible identity theft in the bud, and $25,000 in identity-theft insurance.

"We're working to recover the data and protect all the people whose data is missing," said Al Modugno, a company spokesman. He said there was no indication, to date, that anyone had misused data from the missing computer.

The Special Funds Conservation Committee handles workers' compensation coverage in New York for about 56,500 disabled workers who suffer a second injury, and about 36,000 old claims that are reopened. In existence since 1938, it maintains records on about 540,000 old and current claimants, said chief executive Steven Licht.

"Obviously, we're not thrilled with this situation," Licht said.

"You always see stories about identity theft," said one Long Islander who got a letter from CS Stars, but asked that his name not be disclosed. "People can play with your name and get loans under your name, so obviously we're worried about that."

All the names in the database, Licht said, had address, date of birth and Social Security number attached, and some also would have employer and accident information, but none had confidential medical records included. Licht also said there were copies of all the data, and claims payments had not been interrupted.

Modugno said an employee at CS Stars' headquarters first realized that the computer containing New Yorkers' private data was missing on May 9. The employee, he said, did not notify management until June 19.

Management was "appalled" by the delay, Modugno said, and initiated an investigation by another Marsh subsidiary, the security firm Kroll Inc., on June 23. It let Licht's group know their data had been lost on June 29, and notified the FBI on June 30.

The company still has no idea what happened to the computer. "The facility is protected by key-card access, on-site personnel, and has cameras," Modugno said.

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