Your records for sale to the highest bidder: Via Portland Press Herald

Records abandoned in storage can be sold like office furniture

Earlier this month, the Mini Self Storage company in Scarborough was prepared to auction off the contents of a unit rented to a mortgage brokerage that hadn't paid its bill: 60 boxes of financial records, including loan applications with personal financial information such as Social Security and bank account numbers.

The situation represents one of at least three recent cases in Maine when self-storage facilities ended up with private financial documents amid property they intended to sell.

In the wrong hands, sensitive information such as this can be used for identity theft. But the sale of such documents is legal.

Nothing in Maine law prevents storage facilities from selling sensitive financial, personal or medical records to the highest bidder, when their original owners do not pay their storage bills. And that is becoming a real concern, with the failure of several dozen mortgage companies in Maine since the recession began one year ago.

In the Scarborough case, the Maine Bureau of Consumer Credit Protection obtained a court order to confiscate the records of the shuttered mortgage company, which was legally obligated to maintain the documents. The records had been generated by Ocean House Mortgage and Cape Mortgage Co. in Cape Elizabeth, which went out of business last summer.

In two other recent cases, including one in Westbrook, the owners of self-storage facilities asked the state what they should do with such records.

"Current law places no burden whatsoever on the facility operator to inventory what is in the unit, identify records that might be confidential and notify regulators," said Will Lund, superintendent of Maine's Consumer Credit Protection Bureau.

With mortgage brokerage closings now a weekly occurrence in Maine, state officials – and even storage facility managers – say laws should be changed to protect sensitive information from being sold to the highest bidder.

Lund said the potential for sensitive records falling into criminal hands is growing. At least 50 of the 400 mortgage brokers licensed in Maine went out of business in the past year.

And those are just the ones that bothered to notify Lund's office. In many cases, the state doesn't find out that a broker has left the business until it fails to renew the annual license.

Within days of stopping the records from being sold at Mini Self Storage, Lund's office was alerted to a similar case in Westbrook, this time by the operator of a storage facility seeking guidance about how to handle the contents of a unit rented by another mortgage company that had defaulted on its bill.

Then a third storage facility operator called, looking for help in locating a certified public accountant who hadn't paid his bill on a storage unit filled with client financial records.

Under current law, items in a storage unit may be sold by the storage unit operator if the renter is more than 45 days late in paying for the unit. The storage operator must notify the renter before the sale, and the sale must be advertised in the local newspaper once a week for two weeks before it may take place.

Maine does have a data-breach notification law that requires creditors, banks and others who discover an electronic data incursion to report it to regulators and affected consumers. However, the statute does not apply to storage facility operators.

A records-retention law requires financial documents to be held by the originator for two years after the financial transaction is completed, but it does not address the possibility of those records being sold off by storage facilities to cover unpaid storage bills.

Read Original Article ( Via Portland Press Herald. )