Settlement for Countrywide Financial ID Theft Victims Advanced

December 28, 2009

A federal judge in Kentucky has given preliminary approval to a settlement between Countrywide Financial Corp., and millions of customers whose detailed financial information was exposed in a security breach.

Under the terms of the settlement, Countrywide, now owned by Bank of America, would give up to 17 million people whose information was exposed during the security breach free credit monitoring. That group includes anyone who obtained a mortgage and anyone who used Countrywide to service a mortgage prior to July 1, 2008.

The settlement entitles a person up to $50,000 in reimbursements from Countrywide per instance of identity theft, provided they actually lost something of value, were not reimbursed and it is more likely than not the theft stemmed from Countrywide.

U.S. District Judge Thomas B. Russell of Paducah, who oversaw more than 35 lawsuits related to the security breach, granted class-action status to the suit and gave preliminary approval of the settlement last week. A fairness hearing is scheduled for July in Louisville.

“The proposed settlement agreement provides for a reasonable solution that properly addresses the complications of identity theft,” Russell wrote.

Shirley Norton, a spokeswoman for Bank of America, said the settlement is “in the bank’s best interest” to avoid additional legal expenses.

“We look forward to moving ahead with the settlement,” Norton said.

Plaintiffs’ attorneys Ben Barnow and Daniel Haviland did not immediately return messages seeking comment.

Attorneys for the plaintiffs say Countrywide Financial had all his client’s financial information including mortgage information, credit card and Social Security numbers and birth dates.

The lawsuits stem from the arrest of Rene Rebollo Jr., of Pasadena, Calif., a former senior analyst for Countrywide, and Wahid Siddiqi, of Thousand Oaks, Calif. Federal investigators said Rebollo used a flash drive to download data from about 20,000 customers a week for two years from 2006 through August 2008.

Rebollo then sold the information to Siddiqi for $500 and earned a combined $50,000, federal investigators said. Siddiqi pleaded guilty on Dec. 9 to 10 counts of fraud and admitted to selling the information to third parties, including an undercover FBI agent.

Rebollo has pleaded not guilty and is scheduled for trial in January.

Countrywide has said it has worked closely with the FBI and federal investigators and that the security breach does not appear to have resulted in anyone’s identities being stolen.

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