CHOICE POINT PAYS, FEDERAL TRADE COMMISSION DELAYS – DATA BREACH UPDATE

The Federal Court for the US District of Northern Georgia in an action brought by the Federal Trade Commission fined information broker Choice Point $10,000,000 for failure to protect the personal information of over 400,000 consumers. An additional fine of $5,000,000 for compensation to victims was also levied. The Choice Point data breach has become a classic tale of an intentional theft of personal identity information by organized crime groups.

The compensation fund was intended to compensate persons who had their stolen information used in criminal acts such as fraud and impersonation crimes. The fine was levied against Choice Point in January of 2006. To date, the FTC has yet to distribute any funds to victims identified in 2005.

The court ruling may be found at:

http://www.ftc.gov/os/caselist/choicepoint/0523069stip.pdf

The FTC moved against Choice Point for its violation of the Fair Credit Reporting Act (FCRA) and included in the charges were allegations that the data broker had failed to adequately check the background information of a business that was a front for a criminal group. Inconsistencies within the application to the information broker, as well as simple business verification checks would have revealed that the new applicant was not a legitimate business.

The FTC complaint with the Federal Court may be found at:

http://www.ftc.gov/os/caselist/choicepoint/0523069complaint.pdf

(Note: KnightsBridge Castle's identity theft prevention and detection systems subscribe to many information broker services including those of ChoicePoint. All access of personal information from these suppliers is performed in compliance with FCRA and with the consent of our clients)