(Updated) Thousands of employees at risk of identity theft, tax refund fraud after hack of e-payroll vendor

Attacks on businesses to obtain employee W-2 and tax reporting information are nothing new.  And with more people delaying filing their tax returns this year, criminals have even more time to try to misuse any stolen data for tax refund fraud.

On February 19, PaperlessPay Corporation in Jacksonville, Florida was contacted by the Department of Homeland Security and informed that someone was offering access to their clients’ data for sale on the dark web.  PaperlessPay assists its clients with generating paystubs and W-2 data.

In response to the notification, PaperlessPay immediately shut down its web server and SQL server and started an investigation while cooperating with DHS and the FBI.

As a result of their own investigation and the joint investigation, PaperlessPay was able to confirm that an unauthorized person had gained access to their SQL server on February 18. The investigations did not permit the determination of what data the attacker may have actually accessed, viewed, or copied.

On March 20, PaperlessPay sent notifications to its clients about the incident.  Depending on the client and employee, the potentially accessed information may have included: name, address, pay and withholdings information, bank account number information (if this appeared on the employee’s paystub), and Social Security number. If employees received multiple deposits (i.e., to multiple bank accounts),  PaperlessPay would have had access to a full bank account number for each account, but not to bank account routing numbers or bank names.

Those affected are being offered complimentary credit monitoring and identity theft protection services.

So far, DataBreaches.net has seen notifications or news stories related to a few of PaperlessPay’s clients. When notifications are sent, they are being sent by the clients and not by PaperlessPay (at least so far):

If you were employed by one of the above or received a notification about this breach and have not yet filed your tax return for 2019, you may want to file promptly, even though the government has extended the filing deadline.

Also of concern, in cases such as these employees and clients are often advised to reset their passwords.  That is the case here too, but the Orlando Utilities Commission reportedly informed users that they would have to add a character to the end of their passwords.

Just add a character? I hope that is not quite all.

When contacted by the Orlando Sentinel, a PaperlessPay Corp. contact, Web Broughton, declined to comment, including when asked whether data attacks affected other clients of the company.

Well, we know that other clients were affected. But how many more? And how many employees/individuals, total, were potentially impacted by this incident?  With 1500 clients, more than 8 million e-stubs served and more than 106 million W-2’s, and more than 2 million enrolled users, there could be a lot.

There is no notice about the breach on PaperlessPay’s site at the time of this publication. The firm’s security was a source of pride to it, and their site still claims:

At PaperlessPay Corporation, we created the most secure and comprehensive Employee Payroll and Tax Management portal available in today’s market called my-eStub.com™. In 2019 we introduced a replacement service product named PPCStubs.com that takes the technology and security behind the technology to a new level.

As we service your company, we are continually evaluating our layers of security and are committed to implement the latest industry techniques and technology to protect your data.

Update:

We’re going to continue to add to the list above as we become aware of other clients who are impacted:

 

About the author: Dissent

Comments are closed.