Settlement Is Concluded With Citigroup, Inc
Settlement is concluded with Citigroup, Inc. that should better protect consumer personal information in Bankruptcy Cases
The federal agency overseeing the bankruptcy system, the U.S. Trustee Program(USTP), recently confirmed that a nationwide settlement was successfully concluded with Citigroup Inc. (Citi) to protect the personal information of nearly 150,000 consumers in 85 jurisdictions. Under the settlement, Citi agreed to redact all personal information of consumer debtors and third parties from its proofs of claim, including Social Security numbers and birthdates, that had not been properly redacted in bankruptcy cases nationwide as required by Federal Rules of Bankruptcy Procedure.
One Year of Free Credit Monitoring
In addition, Citi agreed to notify all affected consumers and offer them one year of free credit monitoring and to change its internal procedures so the redaction error does not happen in the future. The settlement called for the appointment of a privacy expert to serve as independent auditor to review and certify the accuracy of the remediation process. The appointed auditor recently filed his final report certifying the accuracy of the process.
The settlement resolved the USTP’s objection to a motion, filed by Citi in the U.S. Bankruptcy Court for the Southern District of New York. admitting that personal information subject to redaction under bankruptcy court rules had not been properly redacted when Citi’s subsidiaries filed bankruptcy proofs of claim seeking payment of amounts allegedly owed by debtors. The USTP had objected to Citi’s motion on the grounds that it failed to provide public notice of the nationwide scope of the breach or mandate a verifiable solution to correct the problem and prevent its recurrence. The settlement was approved by the bankruptcy court on March 13, 2012.
During the verification process required under the settlement, Citi discovered additional improperly redacted proofs of claim. It then prepared a plan of corrective action to redact approximately 50,000 additional bankruptcy filings.