Ameritrade Loses Customer's Personal Data

April 19, 2005

Ameritrade Inc. warned 200,000 of its former and current clients Tuesday that a backup tape containing their personal information, including, names, social security and account numbers, had been lost.

A spokeswoman for the online broker said it was told in February that a package holding four data cassettes containing current and former Ameritrade account holders' information from the years 2000 through 2003 was misplaced by a shipping company Ameritrade uses. It declined to name the company. Three of the four tapes were recovered at the shippers' Maryland facility, said the spokeswoman, Donna Kush. The one tape that remains missing contains information on as many as 200,000 current and former customers, she said. Ameritrade has about 3.7 million customers.

Kush, said they waited until they were certain which clients were directly affected by the loss before notifying them. Ameritrade has reviewed the customer information that would be on the missing back-up tape and has decided that only 175,000 of those customers needed to be notified, in accordance with industry standards. The company began sending letters to those customers last week.

The information was compressed. Therefore, viewing it would require special equipment.

"We feel like we acted in a timely fashion, " Kush said. "This was not an Ameritrade Systems issue or a compromise of our technology. This was related to a third party vendor."

"We don't believe any foul play was involved," Kush said. "And we are confident no customer accounts have been compromised or misused." We sincerely apologize for this unusual event, and any discomfort it may cause you," the Ameritrade e-mail said. "That's why we wanted to notify you as quickly as possible, and let you know what actions we are taking."

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