Insurance Company Loses 540,000 N.Y. Employee Records

By Matt Hines  |  Posted 07-26-2006

Government officials in New York are warning 540,000 injured state workers that an outside contractor has lost a computer containing their personal data, including the employees' names, addresses and social security numbers.

State officials have sent letters warning the individuals affected by the data loss to be on the lookout for potential identity fraud, based on the mistake made by insurance and disability claims management vendor CS Stars, of Amarillo, Texas. Representatives from both New York and CS Stars have confirmed that the company cannot locate a computer in its Chicago offices on which the injured worker records resided.

According to the state, the majority of the people listed in the system were involved with claims from two of New York's workers compensation funds. The funds involved workers who had sustained at least two injuries on the job, and people with lingering effects from earlier medical problems, respectively, officials said.

The letter mailed to people involved in the incident reported that the missing personal computer was the property of the state of New York but had been turned over to CS Stars, which offered no further explanation of the data loss. Company officials said that the FBI is already involved in an investigation into the incident.

In the meantime, CS Stars is offering identity theft insurance, 12 months of free credit reports and access to fraud protection services to those individuals whose data was stored on the missing PC. Officials said that there have been no crimes related to the data breach reported to either the state or CS Stars thus far.

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