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18,000 vets get another's financial info in mail after printing error

By Laurie Ure, CNN
The 18,000 errant documents were mailed to the Norfolk, Virginia, area, the Defense Department said Friday.
The 18,000 errant documents were mailed to the Norfolk, Virginia, area, the Defense Department said Friday.
  • Defense Department: Errant statements went to vets in the Norfolk, Virginia, area
  • Each of the statements had data from an unnamed veteran's financial summary
  • An outside contractor had mailed the statements before the mistake was spotted
  • No specific identity information was included on the errant page, spokesman says

Washington (CNN) -- Nearly 18,000 veterans in the Norfolk, Virginia, area received statements this week containing financial data intended in part for another retiree, due to a Defense Department agency printing error, the department said Friday.

The statements summarized annual retirement and disability pay increases to military retirees.

The first page detailed financial information intended for the recipient, but the second page included data related to a separate unnamed veteran, identifying that individual's specific allotment, names of banks and insurance companies tied to those allotments, and allotment amounts, according to Steve Burghardt, a Defense Finance and Accounting Service spokesman.

An outside contractor mailed them on behalf of DFAS before the mistake was spotted, he said.

No specific veteran names, Social Security numbers, bank account numbers or phone numbers were indicated on the errant page, Burghardt told CNN.

The problem occurred during the printing of a file containing the statements, he said. When a document duplicating system malfunctioned, it was fixed, "but upon restarting the printing run, the data streams -- with information for the front and back of the statement forms -- were no longer synchronized correctly," he said. This resulted in recipients seeing their own information on the first page, but someone else's on page two, he said.

It's not clear how, if at all, the information could be misused.

Chris Calabrese, legislative counsel for the American Civil Liberties Union, said the odds that any of the information fell into the hands of someone who might misuse it are relatively low. He told CNN the recipients "are random people, not likely criminals looking to leverage personal information they got from somewhere else."

But he added, "What this does is highlight the massive amount of danger in large-scale information. Accidents happen, information leaks out. So the best privacy policy is not collecting this information at all, though that's not always possible, and may not have been possible here."

Various other Defense Department agencies will investigate the incident, Burghardt said.

"Privacy Act folks, IT folks, payroll folks, all of them will review the breach," he said. "The ball is in their court."

DFAS discovered the mistake shortly after the statements were mailed, according to Burghardt. The agency "got calls from people who said, 'Hey, this doesn't look right'," he told CNN.

The agency provides finance and accounting services to the military. DFAS is examining the adequacy of its current quality-control practices, looking into what specifically happened in this situation, and how to prevent it in the future, according to Burghardt.

"We want the problem eliminated, or greatly reduced," he said.

Last April, DFAS decided to stop outsourcing retired and annuitant pay functions beginning this year. According to DFAS Director Terri McKay, a study concluded that "bringing this work back in-house would result in savings of more than $20 million over the next 10 years," and "reduce risks to operations."

That change is expected to take place in the next several months, Burghardt said.

He said DFAS is reissuing new retirement and disability pay increase statements to retirees, asking them to destroy the earlier misprints.

According to DFAS' Web site, the agency processed 181 million pay transactions for 6 million people in fiscal year 2009. Its mission is described there as well. "We work hard to fulfill the important fiscal responsibilities entrusted to us by the American taxpayers. We ensure the resources they provide are accounted for properly," the Web site says.