U.S. Veteran Affairs Department settles data breach case

The U.S. Department of Veterans Affairs (VA) has settled a class-action lawsuit resulting from a massive data breach that left 26.5 million active duty troops and veterans open to the risk of identity theft.

Under the terms of the settlement, the VA will pay $20 million. The money is to be given to military personnel and veterans who are able to show that they were harmed by the data loss -- either in physical manifestations of emotional distress or by costs of monitoring credit records. Individual payments could be as high as $1,500.

“We want to make it very clear that the $20 million is not coming from any VA program," agency spokesman Phil Budahn. "It will come from the Treasury, which has a special program set up for these kinds of settlements."

In 2006, a laptop and external drive was stolen from the home of a Veterans Affairs' data analyst. He had taken the computer home without permission. The names, dates of birth and Social Security numbers of about 26.5 million active duty troops and veterans were on the machines.

The FBI later found the equipment, the thieves were apprehended, and the VA said that it found no evidence that the data had been compromised in any way.

After the settlement was announced, the VA said in a statement: “We want to assure veterans there is no evidence that the information involved in this incident was used to harm a single veteran."