Multistate Settlement Resolves 2019 American Medical Collection Agency Data Breach Investigation

A coalition of 41 state Attorneys General has agreed to settle an investigation into Retrieval-Masters Creditors Bureau dba American Medical Collection Agency (AMCA) over a 2019 data breach that resulted in the exposure/theft of the protected health information of at least 21 million Americans.

Retrieval-Masters Creditors Bureau is a debt collection agency, with its AMCA arm providing small debt collection services to healthcare clients such as laboratories and medical testing facilities.

From August 1, 2018 until March 30, 2019, an unauthorized individual had access to AMCA’s systems and exfiltrated sensitive data such as names, personal information, Social Security numbers, payment card information and, for some individuals, medical test information and diagnostic codes. The AMCA data breach was the largest healthcare data breach reported in 2019.

AMCA notified states about the breach starting June 3, 2019, and individuals affected by the breach were offered two years of complimentary credit monitoring services. The high cost of remediation of the breach saw AMCA file for bankruptcy protection in June 2019.

The multi-state investigation into the breach was led by the Indiana, Texas, Connecticut, and New York Attorneys General, with the Indiana and Texas AGs also participating in the bankruptcy proceedings to ensure that the investigation continued, and the personal and protected health information of breach victims was protected. AMCA received permission from the bankruptcy court to settle the multistate action and filed for dismissal of the bankruptcy on December 9, 2020.

The multistate investigation confirmed information security deficiencies contributed to the cause of the breach and despite AMCA receiving warnings from banks that processed AMCA payments about fraudulent use of payment cards, AMCA failed to detect the intrusion.

Under the terms of the settlement, AMCA is required to create and implement an information security program, develop an incident response plan, employ a qualified chief information security officer (CISO), hire a third-party assessor to perform an information security assessment, and continue to assist state attorneys general with investigations into the data breach.

A financial penalty of $21 million has been imposed on AMCA which will be distributed pro rata between the affected states; however, due to the financial position of the company, the $21 million financial penalty has been suspended. That payment will only need to be made if AMCA defaults on the terms of the settlement agreement.

“AMCA is a cautionary tale: When a company does not adequately invest in information security, the costs associated with a data breach can lead to bankruptcy – destroying the business and leaving affected individuals in harm’s way,” said Connecticut Attorney General Tong. “My office will continue to work to protect personal information even where the business that had the responsibility to do so cannot.”

“AMCA’s security failures resulted in 21 million Americans having their data illegally accessed. I am committed to protecting New Yorkers’ personal data and will not hesitate to hold companies accountable when they fail to safeguard that information,” said New York Attorney General Letitia James. “Today’s agreement ensures that the company has the appropriate security and incident response plan in place so that a failure like this does not take place again.”

Indiana, Texas, Connecticut, and New York led the investigation and were assisted by Florida, Illinois, Maryland, Massachusetts, Michigan, North Carolina, and Tennessee. The Attorneys General of Arizona, Arkansas, Colorado, the District of Columbia, Georgia, Hawaii, Idaho, Iowa, Kansas, Kentucky, Louisiana, Maine, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Virginia, Washington, and West Virginia also joined the settlement.

Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. He is a specialist on legal and regulatory affairs, and has several years of experience writing about HIPAA. Steve holds a B.Sc. from the University of Liverpool.