(The following press release from the U.S. Justice Department was received
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FOR IMMEDIATE RELEASE
MONDAY, JULY 15, 2013
U.S. TRUSTEE PROGRAM ANNOUNCES SETTLEMENT WITH CITIGROUP INC.
PROTECTING CONSUMERS’ PERSONAL INFORMATION
IN BANKRUPTCY CASES
Nationwide Agreement Requires Citigroup to Protect Personal Information of
Nearly 150,000 Consumers
WASHINGTON – The U.S. Trustee Program (USTP) today announced the unsealing of a
settlement with Citigroup Inc. (Citi) that protects the personal information of
nearly 150,000 consumers in 85 jurisdictions around the country. Citi agreed to
redact proofs of claim filed in bankruptcy cases nationwide in which the
personal information of consumer debtors and third parties, including Social
Security numbers and birthdates, had not been properly redacted as required by
the bankruptcy rules. Citi also agreed to notify all affected consumers and
offer them one year of free credit monitoring. An independent auditor appointed
under the settlement is reviewing the accuracy of the correction process.
The settlement, approved by the U.S. Bankruptcy Court for the Southern District
of New York on March 13, 2012, had been sealed to prevent potential wrongdoers
from learning of the breach and seeking to victimize the affected consumers. On
July 11, 2013, the bankruptcy court granted the parties’ motion to unseal the
“Under this unprecedented settlement, nearly 150,000 consumers whose
personal information was placed at risk through no fault of their own have
received notice of the improper disclosure and can further protect their
information through free credit monitoring,” stated Clifford J. White III,
Director of the Executive Office for U.S. Trustees. “Creditors in bankruptcy
cases have a legal duty to protect certain personal information of their
customers. This settlement should remind all major financial institutions and
other creditors that violations cannot be tolerated.”
The settlement resolved the objection of the U.S. Trustee for Region 2, Tracy
Hope Davis, to a motion Citi filed under seal in September 2011. Citi’s motion
disclosed that between 2007 and 2011 its subsidiaries, including CitiMortgage
Inc., Citibank N.A. and CitiFinancial Inc., filed proofs of claim in thousands
of consumer bankruptcy cases seeking payment of amounts alleged to be owed by
debtors. In April 2011, Citi discovered that certain personal information that
should have been redacted under bankruptcy court rules, including consumers’
Social Security numbers and birth dates, had not been properly redacted.
The U.S. Trustee agreed that the information should be redacted, but objected
to Citi’s motion because it did not disclose the nationwide scope of the
breach. In addition, Citi did not propose a verifiable solution to correct the
problem or provide assurance that the matter would be made public and the seal
lifted once the information was redacted and affected consumers received notice.
On March 13, 2012, the bankruptcy court approved the settlement calling for the
redaction and electronic filing of replacement claims at Citi’s expense. The
settlement also included specific consumer protections, including: assurance
that the original claims would not be overwritten or altered in the replacement
process; notification to the affected debtors and third parties that their
personal information was not properly redacted and of its correction; and an
offer of one year of free credit monitoring.
Under the settlement, the court also appointed an independent auditor to review
certifications with the court confirming that Citi’s investigation to determine
the scope of the breach was adequate, that Citi filed properly redacted claims
and did not overwrite or replace the original claims in the process, and that
Citi’s policies and procedures for future filings are reasonably calculated to
prevent recurrence of the redaction error.
On July 19, 2012, Citi certified to the bankruptcy court the successful
redaction and replacement of the filings in the Southern District of New York.
During that process, Citi discovered additional redaction issues and, in
accordance with the settlement, filed a plan of corrective action expanding the
scope of the settlement to include the redaction of approximately 50,000
additional bankruptcy filings.
Courts in 60 other jurisdictions served by the USTP have entered the settlement
under seal and accepted the redacted replacement filings. Courts in the
remaining jurisdictions handled the correction of the filings according to
their local rules and orders, and Citi is otherwise following the terms of the
settlement in those jurisdictions.
On June 4, 2013, the independent auditor certified to the U.S. Bankruptcy Court
for the Southern District of New York and the 60 other participating courts
that Citi had mailed letters notifying affected consumers of the privacy
breach, its correction and the availability of one year of free credit
monitoring at Citi’s expense. The independent auditor is reviewing Citi’s
redaction and replacement process and is expected to issue its certification on
that process by the end of the year.
Consumer debtors who believe they were affected may contact Citigroup
Customer Service at 1-866-613-5636.
The U.S. Trustee Program is the component of the Justice Department
that protects the integrity of the bankruptcy system by overseeing case
administration and litigating to enforce the bankruptcy laws.
The settlement is filed in In re Matter of Citi Replacement Filings,
No. 11-00405 (Bankr. S.D.N.Y.).
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