Members of the City Council voted unanimously and without comment Tuesday to withdraw Chattanooga’s renewal of a contract term with Nationwide Recovery Services. The city’s purchasing department asked the council to rescind the contract renewal.
The contract with the firm dates to April 2021, according to a city purchase agreement. The city’s purchasing department gave the council a $220,000 annual cost estimate for the contract.
The council’s Tuesday vote comes weeks after the Chattanooga mayor’s office announced that Nationwide Recovery Services had informed the city of a July 2024 data breach and after the Hamilton County government, which used the same collector, began notifying people that their data had been accessed. It undoes an April 8 vote the Council took to approve the contract renewal. That approval came days after city staff said that Chattanooga data was affected by the debt collection agency breach.
The city’s contract with Nationwide was originally set to end April 18, and the council’s vote means that the agreement effectively ended April 18, according to Mayor Tim Kelly’s spokesperson, Eric Holl.
But given the vote to renew earlier this month, the contract would have lasted until April 2026 if the council had not agreed to rescind its renewal Tuesday.
Representatives of the county mayor’s office did not immediately respond to a question regarding the county’s contracts with Nationwide.
As many as 14,000 people may have been compromised by the county situation, according to an email sent from Nationwide to a county privacy officer. Holl said in an April 4 news release announcing the breach that there was no suggestion that data other than information tied to debt collection services was affected.
Holl said in the April 4 news release that Nationwide told the city about the breach through a letter in February, but that that information hadn’t reached Kelly's office until April 4. In the letter, Nationwide representatives said that they had told the city of a problem first in July 2024. Holl said in the release that the city would investigate why information about the breach took months to reach relevant officials. An attorney for Chattanooga also wrote on April 4 to request that Nationwide inform customers of the potential breach and, if their personal financial data was affected by it, offer them credit protection.
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