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Choice Point on the Hot Seat

By Jeralyn, Section Civil Liberties
Posted on Fri Mar 04, 2005 at 11:09:12 PM EST
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Identity theft and fraud are big problems, and data accumulator and seller Choice Point seems headed into deep trouble, as the FBI and Secret Service get on its case:

Yesterday, the burgeoning scandal led ChoicePoint to cut off access to some sensitive data to thousands of small businesses. The company also announced in filings with the government that two senior executives were under investigation by the Securities and Exchange Commission for stock trades that took place after they learned about the scheme last fall but before they made it public.

ChoicePoint, based in Alpharetta, Ga., has assembled a huge trove of personal data in recent years. Much of that information, such as court rulings, driver records and real estate details, comes from government agencies. The company also purchases information from the three major credit bureaus and other information services.

Its ability to create and electronically transmit exhaustive dossiers on people makes it a favorite of many Fortune 500 companies, government agencies and law enforcement and Homeland Security authorities. Today, it has more than 100,000 customers and revenue approaching $1 billion, a large proportion based on the resale of details about individuals.

Congress will hold hearings. Choice Point is making changes:

In response to the thefts, ChoicePoint said in an SEC filing that it is "discontinuing the sale of information products that contain sensitive consumer data . . . except where there is either a specific consumer-driven transaction or benefit or where the products support federal, state or local government and law enforcement purposes."

The SEC is now investigating as well.

Federal regulators are investigating why two top executives of information broker ChoicePoint Inc. earned more than $16million selling stock in the weeks before an identity-theft scandal engulfed the company.

ChoicePoint said Friday that Securities and Exchange Commission staff had launched an inquiry into the stock sales and the company's handling of a security breach that has sparked a national furor over privacy. The Federal Trade Commission and several state attorneys-general also are probing the incident.

Too little, too late?

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    Choice Point on the Hot Seat | 2 comments (2 topical)
    Re: Choice Point on the Hot Seat (none / 0) (#1)
    by Talkleft Visitor on Sat Mar 05, 2005 at 05:20:51 AM EST
    Good! I hope that we get a federal "opt out" law for these so-called consumer data companies. I suspect that if we were allowed to do that we could stop identity theft immediately. For example, when you buy a domain (talkleft.com) you can put flags on it prohibiting it's movement or transfer. Under some of the "opt in" plans being touted you would have to individually authorize information being released to you - like for pre-approved credit cards, checks to see if you should get a Sears card, etc. -C

    Re: Choice Point on the Hot Seat (none / 0) (#2)
    by scarshapedstar on Sat Mar 05, 2005 at 12:40:53 PM EST
    Hmm. So these guys actually screwed a lot of people. I'll give ten to one odds we don't see a Martha Stewart style witch hunt.

    Choice Point on the Hot Seat | 2 comments (2 topical)