12-5-13 5:05 PM EST | Email Article

J.P. Morgan Chase & Co. plans to notify 465,000 customers next week that personal information could be at risk following a breach affecting prepaid cash-card holders in the U.S.

The breach occurred in mid-July when hackers were able to view a "small file of data" on J.P. Morgan servers, a spokesman said. J.P. Morgan detected the theft in September.

The largest U.S. bank by assets doesn't know what was in the file, but bank officials believe it was too small to include critical personal information such as social security, card, phone or account numbers, addresses, names or dates of birth for individual card holders. But the bank also can't rule out that such information was compromised.

Some state and local government agencies use so-called UCards from J.P. Morgan in place of checks to provide tax refunds, unemployment benefits, child support payments and food stamps. Some companies use the cards for payroll.

J.P. Morgan officials conducted an investigation and concluded the breach potentially affected a pool of 465,000 UCard holders who logged onto the website between mid-July and mid-September. That is roughly 2% of the 22 million to 25 million users of such cards, which are different from J.P. Morgan's core debit, credit and prepaid Liquid cards.

The bank intends to notify the affected customers by email next week and offer free credit monitoring.

J.P. Morgan has been scrutinizing its government prepaid card business as it looks to tighten controls across the company and exit any offerings that are less profitable, said a person familiar with the discussions. The J.P. Morgan spokesman declined comment on such a review.

The bank began reaching out to government clients earlier this week. Connecticut state Treasurer Denise Nappier said in a statement that she is "dismayed" that it took J.P. Morgan 2 1/2 months to communicate the problem.

"They should have picked up the phone immediately and called us," she said, adding that the episode "raises concerns over its culture of compliance and broader governance issues." The bank "has some work to do, not only to assure the holders iof its debit cards, but also to restore the state's confidence in the company's ability to remain worthy of our continued business."

A J.P. Morgan spokesman said its first priority was to protect card holders data and its systems while notifying law enforcement. It also launched an investigation to understand what happened. The spokesman declined to discuss exactly how the breach occurred.


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(END) Dow Jones Newswires

December 05, 2013 17:05 ET (22:05 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
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