Well this is timely for me as I am dealing with this issue right now. We
had a contract with a small local storage vendor who was bought out by a
another, bigger vendor in May of 2006. At that time, the new vendor just
imported only the inventory information from the old vendor's database
(not any tracking or history) and created new account numbers for that
inventory. In Sept of 2007, the new vendor finally got around to closing
out the old vendor's facility and doing a physical inventory. Lo and
behold, we get a notice that some 80 boxes "do not exist" and will be
removed from the database. They detailed all the steps they supposedly
did to verify the data. We agreed that about 20 of the boxes don't exist
-- we had requested the boxes to be permed out way before the new vendor
took over, but the old vendor somehow didn't reflect that in their
database. But the rest we thought should be there. Eventually all but 2
were found. One of those, no big deal as they are not critical records.
But the other has been requested for litigation, so it is a problem, and
they are still looking for it. The thing is, at this late date, we don't
know who is responsible for the missing box. Did it go missing before or
after the takeover? If it is not found, at what point do we throw up our
hands and say its gone -- but where did it go? Did it get mis-delivered
to another customer? Did it mistakenly get destroyed? Did someone take
it home? There's no way to really tell as all the history is gone. The
fact that they originally said some 60 boxes were missing, but were able
to find almost all of them after I insisted they should be there, makes
me doubt the accuracy of a lot of what they do. Sending that letter out,
then finding the boxes was a HUGE PR error on the new vendor's part. I
no longer trust their data, but with the issues in our industry right
now, to move would be too costly. The other issue is that we have been
charged monthly storage charges for over a year for those 20 boxes that
were not there.

So my take on this:

1) Part of the transition to the new vendor should be an immediate
physical inventory that is compared to the database -- preferably BEFORE
they take over. That way there is no question as to what is being
transferred. If something comes up missing, the tracking information
about the boxes still exists and employees who may have personal
knowledge are still around so the issue could possibly be resolved.

If you didn't do this prior and find out about it much later, what can
the new vendor do? All you can say is "they lost them and I don't know
where the boxes are." As a customer, I expect that my boxes are cared
for and protected. If you bought them, I expect that you would assume
all the responsibilities from that old vendor and saying "I don't know
where they are" just makes you look really bad, and I really don't care
that the old vendor did it. I have to deal with YOU now, because YOU
took over, and I want my boxes found. That YOU did not do a thorough job
in your due diligence is not MY problem. It's too costly, you say? The
way the deal is structured doesn't really allow this to be done? How
much does it cost to allocate resources to solve problems that you don't
really have the information available to solve? How much is the damage
to your company's reputation worth?

2) Now as far as the second question ... To me that's fixable. You
notify the customer that those boxes were mis-delivered by the old
vendor and explain how your chain of custody procedures are better and
it won't happen again. (Assuming they are! If they aren't better -- do
something about it ASAP) Now, if you're in California and the box
contained personally identifying data, you are required by law to report
the exposure of the customer's data. I'm not sure of all the details of
the law, but you may be liable if that data is used improperly.
Companies who have had this happen sometimes offer credit monitoring
services to the affected people.

3) If the due diligence was done properly to begin with, that is an
immediate physical inventory, this would not be an issue at all.


Nolene Sherman | Director of Records Management | Standard Pacific Homes
| 949-727-9360 | FAX 949-789-3379 | [log in to unmask]

-----Original Message-----
Some of us in the Data Protection Industry have been discussing the
topic of what to do when you as a vendor win business from a competitor
and find that the competitor has lost some of your client's tapes and/or
delivered tapes belonging to another client in error. So I was
interested in your opinions as records managers on the following
questions:

(1)     What should the new vendor do if they believe that the old
vendor
has lost their clients records?

(2)     What should the new vendor do if they find records belonging to
a
3rd party in a delivery for their new client?

(3)     What should be done to ensure the chain of custody reflects the
errors described in (1) and (2)?

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