Columbus-based TSYS mistakenly reported to the major credit bureaus that more than 21,000 customers of Fifth Third Bank had filed for bankruptcy, prompting an apology from the card processor’s top executive.
The error was disclosed after the stock markets’ close Monday, with TSYS and Cincinnati-based Fifth Third Bank, a longtime client of the Columbus credit-card processor, issuing a joint release. It said the mistake was caused by a “TSYS coding issue” as database software was being changed in mid-October.
TSYS said it has sent corrected information involving the 21,221 impacted Fifth Third Bank customers to the various credit bureaus. There are three major bureaus — Experian, Equifax and TransUnion — and another called Innovis, which aggregates information from the others and specializes in the mortgage industry.
Phil Tomlinson, TSYS chairman and chief executive officer, issued a statement apologizing to both Fifth Third Bank and its customers for the “concern and inconvenience” the error caused.
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“As Fifth Third’s service provider, we take responsibility for this error, and we have worked with Fifth Third and the credit bureaus to correct inaccurate reporting of the bank’s customers,” he said.
TSYS spokesman Cyle Mims on Tuesday declined to comment beyond the release.
Fifth Third Bank spokesman Larry Magnesen confirmed the error involved “about 21,000 customers who were reported as having filed bankruptcy despite not having done so. That error occurred during a software upgrade at TSYS.”
The software issue took place on Oct. 17, with the corrected information being sent to the credit bureaus in early November, he said. A couple of phone calls from concerned Fifth Third Bank customers led to the error’s discovery, he said.
Magnesen noted that the 21,221 customers impacted by the mistake are only a small portion of the roughly 3.5 million records the bank routinely has reported to the credit bureaus.
Fifth Third Bank, a subsidiary of Fifth Third Bancorp, is a regional bank with more than 1,300 offices in Georgia, Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri and North Carolina.
Fifth Third has no presence in Columbus, but it has several branches in the Atlanta area. The bank has been a client of TSYS since 1996, having signed a long-term renewal with the credit-card processor in 2009.
Magnesen said the bank still has faith in TSYS and its ability to process and protect customers’ information. Once the error was discovered, he said, the processor acted quickly to rectify the issue.
“There was no malicious intent,” he said. “This was an inadvertent error caused during a software upgrade, and there was no identity theft ... or identity compromise involved here.”
Greg Carmichael, Fifth Third Bank president and chief operating officer, in a statement, thanked his customers for their “patience” and “loyalty” throughout the entire process.
“The safety and accuracy of your personal information is our top priority, and I want to reassure you that there is, and will be, no history of this error reflected in your credit report,” he said.
Magnesen said the impacted Fifth Third customers will receive follow-up letters letting them know they are eligible for a free year of the credit monitoring service, PrivacyGuard. The online service typically costs $14.99 per month, according to its website.
“It would also be the same service we would use if you had had a compromise,” Magnesen said. “But this was — again — not a compromise situation. It was a credit bureau reporting error. It wouldn’t pose any risk of identity theft. But it would theoretically pose a risk of damage to your credit had it not been corrected promptly.”
Bill Hardekopf, CEO of lowcards.com, a free consumer resource website focusing on credit cards, said the TSYS-Fifth Third incident is a great example of why consumers should routinely take a look at their credit reports.
Federal law mandates that consumers receive a copy of their credit report from each of the major bureaus each year. But, according to the Consumer Financial Protection Bureau, less than 20 percent check their information.
And that’s the case despite a Federal Trade Commission study that found about a quarter of consumers have a glaring error on at least one of their reports.
“If you spread those (three free reports) out to once every four months — which you can do — you can get a pretty good glimpse on a regular basis about what’s going on with your credit report,” Hardekopf said.
Such diligence is critical, he said, in a society that has changed dramatically in recent years amid growing credit-card use and the increasing prevalence of computers and smartphones storing personal and financial information.
“All of these data breaches, this personal information being stolen — at Target, Neiman Marcus, Michaels — I think it’s got everybody a lot more concerned than they were just a couple of years ago,” Hardekopf said.