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The Honolulu Advertiser
Posted on: Thursday, March 22, 2007

Suit filed in failure to shield client IDs

Advertiser Staff

The state Department of Commerce and Consumer Affairs is suing the former president of a now-defunct mortgage company for allegedly disposing of clients' mortgage records in a way that didn't shield them from possible identity theft.

Stephen Marn of Hawai'i Kai is the first person accused of violating a new law that requires businesses and government agencies to take reasonable measures when disposing of records that contain sensitive personal information. Marn was the president of Fidelity Escrow Services Corp., a company dissolved in July 2004.

Marn could not be reached for comment.

The state alleges financial records of about 1,000 Fidelity clients who used Fidelity between 1996 and 2000 were dumped in a public recycling bin at Niu Valley Middle school. The documents included Social Security numbers, loan applications, bank statements, tax records and credit reports.

"We have no evidence that any of the information has been compromised or fallen into the hands of identity thieves," said Stephen Levins, executive director of the state Office of Consumer Protection. But he said given the circumstances, his office is advising people involved to monitor their credit reports for the next year.

Levins said Marn should have destroyed the files instead of allegedly tossing them away at the middle school recycling bin. Marn could face fines of $2,500 for each document that was improperly thrown away

The new law, part of a series of identity-theft protection measures enacted last year, guards against the practice of "dumpster diving" in which thieves sift through trash looking for personal information.