Print
E-mail
Comment
Bank gives shredded checks to company for use as packing material
By ALEX WUKMAN
When Michelle McBride in Salina, Kansas, opened the package of Cowboy Candy she’d ordered from WHH Ranch Company in Shepherd, she found more than just the sliced jalapenos she thought she was getting. McBride was shocked to find a recipe for identity theft.
The shock came because WHH had used shredded checks from the Bank of San Jacinto County as packing material. Nestled next to McBride’s jar of peppers were checks from Medicare, hospitals, schools, government agencies, businesses and personal accounts.
When William Hamzy, president of WHH, was contacted by a reporter for Wichita, Kansas TV station KWCH-12, a local CBS affiliate, he was surprised.
“We’ve been doing it so long. We’re all out of sorts about it because it’s so out of place for something like this to happen,” Hamzy told the reporter.
KWCH’s report shows McBride and her stepdaughter assembling the barely shredded checks, some of which have account, routing and driver’s license numbers clearly visible. Hamzy assured KWCH’s reporter that WHH would no longer be using shredded documents from the Bank of San Jacinto County as packing material.
Hamzy reportedly also told KWCH that in the 20 years that WHH had been using shredded documents from the Bank of San Jacinto , McBride was the first customer to notice a problem.
According to an October 2007 Advocate article, WHH shipped packages to all 50 states and nine countries in 2006 alone. In 2007, WHH products were available in over 500 stores and this year WHH’s distribution network has grown to include 750 Tractor Supply Company stores and three stores in Houston Intercontinental Airport.
Repeated attempts to reach Hamzy or anyone from WHH Ranch Company by the Advocate were unsuccessful. In a written statement, the Bank of San Jacinto County released through its attorney, Molly Lambert of the firm Cohn and Lambert, the bank said that they take the security of their customers “very seriously” and to their knowledge their procedures “have been very effective in protecting their customers’ accounts and personal and financial information.”
The statement also details the bank’s previous security procedures by stating that the “procedures and safeguards included shredding and, in some cases, burning customer and bank documents when the bank is no longer required to maintain the records.”
Additionally the bank’s statement reads that “some of the bank’s shredding practices may have created a potential for compromise of customer information, and that once the bank was made aware of the situation, they updated their equipment “to include cross-shredding as an additional safeguard and/or burning of any and all bank and customer documents to prevent any potential harm to its customers.”
It is uncertain as to the amount of customers affected by the potential information compromise.
“They don’t know because they haven’t gotten the papers from Kansas,” said Lambert. She stated that even though the bank believes the shredded checks sent to McBride were an isolated incident, they will be notifying all of their customers in the next few days about the potential compromise.
When the notifications are sent out they will come at least a week after the bank received the first phone call from KWCH’s reporter in Kansas, who called the bank August 18 to ask about the checks.
“No one knew what she was talking about at the time,” said Lambert. “The reporter didn’t give them any kind of details.”
When the Advocate contacted the bank two days later, the staff was still uninformed of the fact that shredded checks had been used as packing material.
Management is said to not have become aware of the potential compromise until August 21, three days after the initial phone call and a full day after the second call. There is still no word on whether or not the Bank of San Jacinto County violated any state or federal laws.
However, when informed of the potential compromise of customers’ driver’s license numbers and account information, Bob Bacon, deputy commissioner for the Texas Department of Banking, said “What I’d like to do is get with some of our people and look into this.”
When asked about the specifics of what banks or other financial institutions are required to do when disposing of the information of their account holders, Frank Dorman, a spokesman for the Federal Trade Commission, wrote in an e-mail statement that “the law says the consumer’s financial information must be disposed of in a way that their personal information is not compromised.”
See KWCH’s video story here: http://www.kwch.com/Global/story.asp?S=8861187&nav=menu486_2_2
The shock came because WHH had used shredded checks from the Bank of San Jacinto County as packing material. Nestled next to McBride’s jar of peppers were checks from Medicare, hospitals, schools, government agencies, businesses and personal accounts.
When William Hamzy, president of WHH, was contacted by a reporter for Wichita, Kansas TV station KWCH-12, a local CBS affiliate, he was surprised.
“We’ve been doing it so long. We’re all out of sorts about it because it’s so out of place for something like this to happen,” Hamzy told the reporter.
KWCH’s report shows McBride and her stepdaughter assembling the barely shredded checks, some of which have account, routing and driver’s license numbers clearly visible. Hamzy assured KWCH’s reporter that WHH would no longer be using shredded documents from the Bank of San Jacinto County as packing material.
Hamzy reportedly also told KWCH that in the 20 years that WHH had been using shredded documents from the Bank of San Jacinto , McBride was the first customer to notice a problem.
According to an October 2007 Advocate article, WHH shipped packages to all 50 states and nine countries in 2006 alone. In 2007, WHH products were available in over 500 stores and this year WHH’s distribution network has grown to include 750 Tractor Supply Company stores and three stores in Houston Intercontinental Airport.
Repeated attempts to reach Hamzy or anyone from WHH Ranch Company by the Advocate were unsuccessful. In a written statement, the Bank of San Jacinto County released through its attorney, Molly Lambert of the firm Cohn and Lambert, the bank said that they take the security of their customers “very seriously” and to their knowledge their procedures “have been very effective in protecting their customers’ accounts and personal and financial information.”
The statement also details the bank’s previous security procedures by stating that the “procedures and safeguards included shredding and, in some cases, burning customer and bank documents when the bank is no longer required to maintain the records.”
Additionally the bank’s statement reads that “some of the bank’s shredding practices may have created a potential for compromise of customer information, and that once the bank was made aware of the situation, they updated their equipment “to include cross-shredding as an additional safeguard and/or burning of any and all bank and customer documents to prevent any potential harm to its customers.”
It is uncertain as to the amount of customers affected by the potential information compromise.
“They don’t know because they haven’t gotten the papers from Kansas,” said Lambert. She stated that even though the bank believes the shredded checks sent to McBride were an isolated incident, they will be notifying all of their customers in the next few days about the potential compromise.
When the notifications are sent out they will come at least a week after the bank received the first phone call from KWCH’s reporter in Kansas, who called the bank August 18 to ask about the checks.
“No one knew what she was talking about at the time,” said Lambert. “The reporter didn’t give them any kind of details.”
When the Advocate contacted the bank two days later, the staff was still uninformed of the fact that shredded checks had been used as packing material.
Management is said to not have become aware of the potential compromise until August 21, three days after the initial phone call and a full day after the second call. There is still no word on whether or not the Bank of San Jacinto County violated any state or federal laws.
However, when informed of the potential compromise of customers’ driver’s license numbers and account information, Bob Bacon, deputy commissioner for the Texas Department of Banking, said “What I’d like to do is get with some of our people and look into this.”
When asked about the specifics of what banks or other financial institutions are required to do when disposing of the information of their account holders, Frank Dorman, a spokesman for the Federal Trade Commission, wrote in an e-mail statement that “the law says the consumer’s financial information must be disposed of in a way that their personal information is not compromised.”
See KWCH’s video story here: http://www.kwch.com/Global/story.asp?S=8861187&nav=menu486_2_2
Submit a Comment
|
You must be logged in to post a comment.
|
Not yet a registered member?
Click here to become one. Comments to stories and articles on the Web site are not edited or pre-approved before appearing online. Readers posting comments are solely responsible for those comments. Comments must be germane to the story to which they apply. Online comments that are libelous, profane or personally attack another site participant can be reported as abuse using the link provided on each comment. Comments reported as abusive will be reviewed and may be removed from view, as will off-topic comments. BE CIVIL. Individuals continually posting abusive comments to the site may have their registrations revoked. |
