[BreachExchange] $1.4M stolen from CHET school savings account

[Destry Winant]

https://www.dariennewsonline.com/news/article/Darien-woman-part-of-larger-CHET-breach-13031096.php

A Fairfield resident lost $82,000 from their state college savings
account. A Darien woman saw $50,000 siphoned from her Connecticut
Higher Education Trust Direct account.

They are part of a larger $1.4 million breach of the state program
announced Wednesday by state Treasurer Denise L. Nappier after an
inquiry from Hearst Connecticut Media.

Nappier said Wednesday the state Treasury has been advised by the CHET
Direct program manager, TIAA-CREF Tuition Financing Inc., of $1.4
million worth of unauthorized withdrawals. Of the 44 unauthorized
withdrawals, $442,540 was recovered or stopped.

CHET Advisor accounts managed by The Hartford, a financial services
company, were not affected by the breach.

“This is the first time that we are aware of fraudulent account
activity in CHET’s 20-plus-year history,” Nappier said, “I am deeply
concerned that these criminal activities have impacted CHET account
holders.”

The money was withdrawn after unauthorized individuals gained online
access to the CHET accounts, according to the release from Nappier’s
office.

David Barrett, executive assistant for communications for Nappier’s
office, said they were notified of the breach in June by TFI, when the
firm discovered the widespread withdrawals.

In addition to the investigation being conducted by the Cybersecurity
Unit of the State Police, local departments and the FBI, Barrett said
TFI is conducting an internal investigation.

“We have asked TFI to supply us with the management report when that
investigation is complete,” Barrett said.

Any account holder who was affected by the breach will have their CHET
accounts fully restored by TFI, and TFI will also provide two years of
identity fraud protection services, identity restoration services and
$1 million in identity theft insurance coverage. Barrett said it is
too early to say whether the state will take any action against TFI
because of the security breach.

The investigation into the breach, which happened between last October
and June of this year, is under investigation by federal, state and
local law enforcement agencies. Two of the account holders were
notified of the breach in March and April, and the rest in June when
the larger breach was discovered, and were advised to contact their
local police department.

Fairfield Lt. Michael Gagner said his department has received three
reports since June 12. In addition to the $82,000 loss, residents
reported $25,000 and $26,000 taken from their accounts.

There are more than 150,000 CHET accounts, and a list has not been
released by TFI or the state on what accounts were breached.

“Until it happens to you, it’s hard to capture how unsettling it is
when personal accounts have been compromised,” Nappier said. “I’ve
been there. Every owner of the more than 150,000 CHET accounts can and
should expect our vigilance and best efforts to ensure that their
funds and information are protected.”