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Loan company reports loss of data on 1.3 million

Texas student-loan provider says IT contractor lost hardware containing customer names and Social Security numbers.

About 1.3 million customers of a Texas provider of student loans are at risk of ID fraud, after a contractor lost computer equipment with sensitive information on them.

The equipment, which was not identified, contains the names and Social Security numbers of the borrowers, the Texas Guaranteed Student Loan company said in a statement Tuesday. The hardware was lost by an employee of Hummingbird, a enterprise software company hired to prepare a document management system, it said.

The information was prepared by the loan company in January for use by Hummingbird. The data was encrypted and password-protected, but subsequently decrypted and stored on the now-lost hardware by the Hummingbird employee, Texas Guaranteed Student Loan said. However, the lost hardware does require a password for access.

"The data was protected through security measures, and given the technology that would be required to retrieve the data, Hummingbird believes that any misuse of the data is extremely unlikely," Toronto-based Hummingbird said in a statement Wednesday.

The equipment was lost on May 24, and Texas Guaranteed Student Loan was notified by Hummingbird two days later, according to the financial institution's statement.

The incident is the latest in a long string of data security breaches. Last month, data on 26.5 million U.S. veterans was seized following the theft of hardware from the home of a government employee. Others who have lost such data include the Metropolitan State College in Denver, the U.S. Department of Agriculture, and Los Angeles' Department of Social Services, according to the Privacy Rights Clearinghouse.

Identity theft continues to plague consumers, topping the list of fraud complaints reported to the Federal Trade Commission last year. Consumers filed more than 255,000 identity theft reports to the FTC in 2005, accounting for more than one-third of all complaints, the agency said in January.

Texas Guaranteed Student Loan said it plans to notify by mail each individual affected by the breach. This notification will include recommendations on how to protect against identity fraud, the company, the administrator of the Federal Family Education Loan Program, said on its Web site.