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South Carolina tax hacking might be nation's worst yet

| Wednesday, Oct. 31, 2012, 7:48 p.m.

CHARLESTON, S.C. — Millions of Social Security numbers and business records from tax returns as far back as 1998 were hacked in South Carolina, and experts said on Wednesday that it may be the largest cyberattack against a state tax department in the nation's history.

State and federal officials are investigating the hacking they say may have started in August and was discovered last month. They say the vulnerability in the system was fixed Oct. 20. The 3.6 million tax returns filed since 1998 included Social Security numbers and about 387,000 credit and debit card numbers that also were exposed, with 6,000 of those unencrypted.

In her daily update on Wednesday, Gov. Nikki Haley said up to 657,000 businesses have been compromised.

“I believe it might actually be the largest against a state government, but certainly of a state tax department,” said Paul Stephens of the Privacy Rights Clearinghouse based in San Diego.

“We've never heard of anything like this, so I think you can say that,” agreed Verenda Smith, deputy director of the National Federation of Tax Administrators in Washington.

The state has agreed to pay Experian up to $12 million for taxpayers enrolling in a service that provides a year of credit monitoring. As of Wednesday, 418,000 people had signed up.

Dun & Bradstreet Credibility Corp., has agreed to provide businesses a credit alert service at no cost to either business owners or the state for the life of the business, Haley said. A website and toll-free number for that should be available by Friday.

A former state senator filed a lawsuit against the state Department of Revenue and the governor, accusing them of failing to protect taxpayers.

Attorney John Hawkins is seeking class-action status, hoping to represent all taxpayers whose Social Security numbers and credit card information were compromised.

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