Attorney General Jepsen Reaches Settlement with Citibank on Online Credit Card System Security

Citibank N.A.  will pay $55,000 to the state of Connecticut and will obtain a third-party data security audit of its online credit card account system under a settlement filed in court today, Attorney General George Jepsen has announced.

The settlement comes after a joint investigation with the California Attorney General’s Office revealed that a known technical vulnerability in Citibank’s Account Online Web-based service permitted hackers to access multiple user accounts. Hackers accessed account information through Account Online by logging in with an account number and password, and then modifying a few characters in the resulting Universal Resource Locater (URL) bar in a browser in order to access additional accounts. This vulnerability was known to the company at the time of the breach and may have existed since 2008.

Citibank discovered that Account Online had been breached on May 10, 2011, but did not permanently fix the vulnerability until May 27, 2011, and did not begin notifying affected customers until June 3, 2011. Account information for more than 360,000 Citibank customers, including about 5,066 Connecticut residents, was accessed or obtained by hackers.

“Citibank represented to its customers that its online system was secured, but ultimately the techniques hackers used to obtain individual account information were relatively simple and unsophisticated,” Attorney General Jepsen. “This settlement not only ensures that Citibank will be responsive to its customers should this system experience a breach in the future, it also requires the company to review and audit its security protocols.”

Attorney General Jepsen thanked California Attorney General Kamala Harris and her staff for their partnership in this matter.

Under the settlement agreement, Citibank will pay $15,000 in civil penalties to the state’s Privacy Protection Guaranty and Enforcement Account, which is used for the reimbursement of losses sustained by individuals injured by certain data breaches and for enforcing the state’s data breach laws. An additional $40,000 will be paid to the state’s General Fund to resolve allegations of violation of the Connecticut Unfair Trade Practices Act, or CUTPA.

Further, Citibank is required to hire an independent third party to conduct an information security audit of Account Online and report a detailed summary of its findings to the Attorney General. The company will be required to maintain reasonable security procedures and practices to protect Account Online in the future. Citibank must also provide appropriate notice and free credit monitoring for two years to any individual affected by certain future security incidents involving Account Online.

The settlement is not final until approved by the court.

Assistant Attorneys General Lorrie Adeyemi and Michele Lucan, members of the Attorney General’s Privacy Task Force, and Assistant Attorney General Matthew Fitzsimmons, head of the Task Force, assisted the Attorney General with this matter.

Please click here to view the complaint  and the settlement documents.