Nearly $1 million was stolen from CHET -- Connecticut Higher Education Trust -- accounts during a security breach and 21 account holders were affected, according to the Office of the State Treasurer.
Connecticut State Treasurer Denise Nappier said that TIAA-CREF Tuition Financing, Inc., the CHET Direct program manager, alerted the state Treasury about the breach and will restore the affected accounts.
Nappier said unauthorized individuals gained online access to 21 CHET account holders and made 44 withdrawals, amounting to a total of $1,416,635, of that, $442,540 was recovered or stopped.
The breach has not impacted customers with CHET Advisor accounts managed by The Hartford, according to the news release from the state.
Federal, state and local law enforcement agencies are investigating.
A news release from Nappier said CHET account data and online systems are housed at and maintained by TFI and its service providers and TFI has implemented system enhancements to help protect against future fraudulent activity.
TFI will fully restore the impacted customers’ accounts and provide the account holders two years of identity fraud protection services, identity restoration services and $1 million in identity theft insurance coverage.
The state Treasury has also requested an independent audit of fraudulent account activity and an independent review of TFI’s cyber, telephone and manual security programs.
State officials said this is first time that they are aware of fraudulent account activity in CHET’s more than 20-year history.
“I am deeply concerned that these criminal activities have impacted CHET account holders,” Nappier said in a statement. “Until it happens to you, it’s hard to capture how unsettling it is when personal accounts have been compromised. I’ve been there. Every owner of the more than 150,000 CHET accounts can and should expect our vigilance and best efforts to ensure that their funds and information are protected.”