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City National Bank Loses Backup Tapes During Transport

Latest tape loss spotlights the need for better security of transported data, including encrypting sensitive information.

City National Bank has become the second company in two months to report a loss of backup tapes in transit by Iron Mountain Inc. The bank disclosed earlier this month that two tapes containing customer data, including Social Security and account numbers, were lost in April during transport to a secure storage facility.

Chart -- Encryption GapThe bank said the data was formatted to make the tapes difficult to read, but it wouldn't say if they were encrypted. The tapes were in a small container of backup tapes belonging to an Internet services provider that hosts applications for City National and other banks. The incident has been investigated by federal law-enforcement officials and no evidence of identity theft relating to the loss has been found.

In May, Time Warner revealed that tapes containing data, including names and Social Security numbers, on 600,000 current and former employees disappeared in March while being shipped to an off-site storage facility operated by Iron Mountain.

In a letter to customers, City National said it is conducting a comprehensive review of its security procedures. "Clearly, information security is a growing concern throughout business everywhere," the letter said.

Under California's security breach notification law, companies must provide notice of security breaches to any California resident whose unencrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person. In providing notification, a spokeswoman says, City National did "more than was required" on behalf of its clients.

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