ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release July 19, 2005 #05-45
E-mail: [email protected]

ACB CITES COST OF DATA BREACHES TO COMMUNITY BANKS, CUSTOMERS

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WASHINGTON, D.C. — America’s Community Bankers told the Federal Trade Commission that community bankers and their customers are harmed by data breaches that cause a loss of confidential customer data.

ACB said in a comment letter on the FTC’s proposed consent order involving a data loss by BJ’s Wholesale Club in 2004, that the agency “should not hesitate from imposing significant monetary penalties on companies that fail to protect consumer information.”

In the BJ’s case, community banks had no responsibility for the data breach, but they did have the burden of notifying credit card customers, canceling and reissuing cards and monitoring accounts for fraudulent activity. ACB said the costs were significant, and the breach also resulted in customer frustration and reputation risk.

ACB encouraged the FTC to support federal legislation requiring businesses that are not subject to the Gramm-Leach-Bliley Act to have adequate information security programs. ACB also said the credit card associations need to be more aggressive in enforcing their operating rules, and should increase the level of enforcement actions. While banks are entitled to compensation through the credit card associations’ rules, the cost of obtaining relief frequently equals or exceeds the amount recoverable.

Click here for the comment letter.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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