BMO and CIBC's Simplii warn fraudsters may have accessed clients' data

Two of Canada's biggest banks warned Monday that "fraudsters" may have accessed certain personal and financial information of up to 90,000 customers.

The Bank of Montreal said hackers contacted the bank on Sunday claiming to be in possession of the personal information of fewer than 50,000 customers and threatened to make it public.

"We became aware of unverified claims that customer personal and financial data may have been accessed by a fraudster," said spokesman Paul Gammal in an emailed statement Monday.

"A threat was made. Our practice is not to make payments to fraudsters. We are focused on protecting and helping our customers," he said.

The bank said it believes the attack originated outside Canada, but did not elaborate on the type of data they accessed.

Gammal said the bank is conducting a thorough investigation and is working with the relevant authorities.

The disclosure followed a warning from CIBC's direct banking brand Simplii Financial that also said "fraudsters" may have electronically accessed certain personal and account information for approximately 40,000 Simplii Financial clients.

Simplii said Monday it learned of the potential issue on Sunday and has implemented additional online security measures such as enhanced online fraud monitoring, adding it is working with the relevant authorities.

Gammal said the potential breach at BMO appears to be related to the CIBC issue. Royal Bank, Scotiabank and Toronto-Dominion Bank said they have no indication they were affected.

Both BMO and CIBC said they will be contacting clients, and recommended that customers monitor their accounts and notify their financial institution about any suspicious activity.

"We are investigating to determine the validity of the claims and the type of the information that may have been accessed," CIBC spokesman Tom Wallis said in an emailed statement.

Minister of Finance Bill Morneau has spoken to the chief executives of the affected institutions, ministry spokeswoman Jocelyn Sweet said.

"We are monitoring the situation closely with the Office of the Superintendent of Financial Institutions," she said in an emailed statement. "The situation is being investigated by the institutions in collaboration with law enforcement."

The Office of the Privacy Commissioner said Monday that both financial institutions have notified it about the issue.

"We are working with the organizations to better understand what occurred and what they are doing to mitigate the situation," said spokeswoman Valerie Lawton in an email.

"At this point in time, we are in contact with the companies; we have not opened a formal investigation."

Simplii said Monday that clients who are victims of fraud because of the issue will receive 100 per cent of the money lost from the affected bank account. It added that there is no indication that clients who bank through CIBC have been affected.

CIBC launched Simplii in November and absorbed the accounts of some two million President's Choice Financial account holders. CIBC had provided the back-end banking services for PC Financial for nearly 20 years, but last August the bank struck a deal with PC's parent company Loblaw to go their separate ways.

The potential data breaches reported by Simplii and BMO on Monday are the latest cybersecurity incidents involving Canadians.

Last fall, credit reporting service Equifax notified the public that hackers accessed or stole the personal data of 145.5 million U.S. customers and 19,000 Canadians. In January, Bell Canada warned some of its customers that their information, such as names and email addresses, had been illegally accessed in a data breach.

In November, ride-sharing company Uber said hackers stole names, email addresses and cellphone numbers of millions of riders. Uber in December said that 815,000 Canadian riders and drivers may have been affected as part of the worldwide data breach.

New federal data breach regulations which would require mandatory reporting of security breaches are set to take effect on Nov. 1.

The regulations require organizations to determine if a data breach poses a risk to any individual whose information was involved and then to notify the federal privacy commissioner and affected individuals "as soon as feasible." Previously, companies that had been hacked had been alerting the public on their own timeline.

Companies in this story: (TSX:CM, TSX:BMO)