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Countrywide Data Breach Still A Mystery

By Martin H. Bosworth
ConsumerAffairs.com

June 12, 2006

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For every front-page case of identity theft, data breaching, or fraud that endangers the security of thousands, there are others you never hear about.

What happens to those cases that slip through the cracks?

Take the case of Joan Carpenter. The Toms River, New Jersey, resident held her mortgage with financial giant Countrywide, and was shocked to receive a letter from her lender in December 2005.

According to Countrywide, one of their employees had "disclosed documents" relating to her mortgage. Although Joan's mortgage had been paid off, the company still held her records, which put her at risk of identity theft.

Carpenter used the toll-free number Countrywide provided to get some more information, but was unsuccessful.

"The first time I called the male rep who answered wasn't pleasant at all so I didn't bother with it," she said. "But then I called back a week later or so and spoke to someone else who told me that he didn't know when the breach occurred and making it sound like it really was no big deal."

Carpenter signed up for "Countrywide Credit Guard," a free credit monitoring service offered jointly by Countrywide and ConsumerInfo.com, the subsidiary of the Experian credit agency.

ConsumerInfo.com has been a frequent target of complaints by subscribers for poor service, and recently settled FTC charges that it had deceptive billed customers for services it claimed was free.

Several months later, Carpenter doesn't have any answers. According to Countrywide, she was the only letter recipient to inquire or complain about the theft.

Countrywide representatives who spoke to ConsumerAffairs.com said the same thing. One representative, who asked not to be identified, would not comment further, saying "we take our customers' privacy very seriously, and can't disclose details of a customer privacy issue."

At a meeting of the American Bar Association's Consumer Financial Services Committee in early 2006, Countrywide's privacy officer, Christine Frye, provided copies of the template for the breach notification letter, and outlined the "corporate" approach her company has taken to data security, such as designating one point of contact for e-mail queries, setting up toll-free numbers, and so on.

Even after a year, Joan Carpenter still isn't sure of what happened. But she knows that Countrywide could have done a better job of protecting her information and keeping her in the loop.

"I feel this breach was handled poorly by Countrywide and that sensitive data for current and non-current customers should be safeguarded and/or encrypted," she said.

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