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Enterprises Scramble To Protect Off-Site Data

Companies are scrambling to encrypt data on tapes shipped to off-site centers for archiving and disaster recovery, and they're taking other steps to avoid the kinds of data-loss incidents that have been a major source of embarrassment in recent months. Last week it was Citigroup's turn, as the bank revealed that a box of tapes containing information on 3.9 million customers was lost in transit.

Time Warner last month reported that tapes containing data on 600,000 current and former employees were lost while en route to an off-site data center operated by Iron Mountain Inc. In April, Ameritrade Inc. said it misplaced a backup tape containing data on 200,000 current and former customers. And in February, Bank of America disclosed the loss of tapes containing information on 1.2 million credit-card customers.

In the Citigroup incident, a box of unencrypted tapes shipped May 2 via UPS Inc. never arrived at its destination, an Experian credit bureau in Texas. The tapes contained names, Social Security numbers, account numbers, and payment histories of CitiFinancial customers. CitiFinancial provides personal, automobile, and home-equity loans, and information on customers with closed accounts from CitiFinancial Retail Services, which provides private-label credit cards for retailers.

UPS hasn't recovered the box but says there's no indication it was stolen. Citigroup has received no reports of unauthorized activity using the data. In July, Citigroup will begin sending data electronically in encrypted form.

Since losing its tapes, Bank of America has strengthened procedures for tracking tapes and is testing several encryption processes, a spokeswoman says. Since late last year, all of the bank's data transmissions to credit bureaus have been encrypted. The bank also is sending more data to backup sites electronically instead of on tape.

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