ID theft warnings in the mail (ChoicePoint)

ChoicePoint Inc., under fire for being duped into allowing criminals to access its massive database of personal information, said Monday that it will send out nearly 6,000 notices to Connecticut residents whose records it sold to suspected thieves in 2004.

The Georgia-based company said that a ring of thieves set up accounts using 50 fake business names to mine ChoicePoint's extensive database.

The company sells criminal, bankruptcy, credit histories and a variety of other records to companies that set up accounts with it. The company logged more than $900 million in revenues in 2004, according to a U.S. Securities and Exchange Commission filing.

ChoicePoint said that the thieves only accessed 144,778 records, but California authorities isay the problem may affect 500,000. Among the information sold were Social Security and driver license numbers.

According to ChoicePoint's Web site, Connecticut, at 5,952 notices, has the sixth highest number of people affected by the problem.

California, with 34,114, had the most. Florida, New York, North Carolina and Texas all had more victims than Connecticut. The problem affects people in every state, the District of Columbia and three U.S. territories, including Puerto Rico, according to the company.

Chuck Jones, a ChoicePoint spokesman, said on Thursday that there are fewer victims than notices because some people had more than one set of records stolen. At that time he could not say how many people were affected in Connecticut. He also confirmed that ChoicePoint received payments from the fake businesses for information.

Connecticut Attorney General Richard Blumenthal blasted the company for not reacting more quickly to the problem and he is vowing to sponsor legislation that will force more timely notification to people whose information is exposed. Rep. Christopher Perone, D-Norwalk, has already offered legislation to require companies like ChoicePoint to notify consumers. California is the only state that has a similar law on the books.

The company blames the notification delay on legal authorities investigating the crime. ChoicePoint knew there was a problem in October, but it said investigators would not let the company notify anyone at that time. However, when the company started to notify people in California because of that state's law, ChoicePoint reportedly told journalists there that it would not be notifying anyone living in other states. Public outrage may have helped the company change its decision.

Connecticut General Assembly House Majority Leader James Amann, D- Milford, said Monday that his staff is going to take up the issue this week to see what else can be done to protect people. Amann said identity theft is a big problem and said that his family was recently notified that someone was attempting to use a credit card that had been inactive for two years in another state. Amann said the incident didn't cost him anything.

The Federal Trade Commission said that 2,000 Connecticut residents were ID theft victims in 2004.

ChoicePoint maintains that its clients must prove that they have a legitimate reason for getting this information, but it admitted, when the story broke last week, that its vetting system was flawed.

Jones said the company was the victim of an elaborate scam in which the thieves stole the identities of people without criminal records and then created fake businesses in those people's names in order to thwart the company's screening process. It then set up ChoicePoint accounts. So far, the ring has used its ChoicePoint information to defraud 750 people, according to the Associated Press.

The company announced Monday that it will rescreen 17,000 clients to verify that they are legitimate. These companies are privately run, and ChoicePoint said that it will no longer give private companies information unless they are sponsored by a public firm or government agency.

ChoicePoint sold the information without the permission of the individuals who will be getting notices, which is apparently legal. Company representatives did not return calls seeking comment.

Private investigators, law enforcement, law firms and several other companies use ChoicePoint and similar companies to investigate individuals, and requiring a release could impede those investigations, according to experts.

Jones said the company was the victim of an elaborate scam in which the thieves stole the identities of people without criminal records and then created fake businesses in those people's names in order to thwart the company's screening process.

How did they steal the first IDs, before they created these "fake businesses"? Did they have a little help from a ChoicePoint employee?

Try This

Sit up in your desk chair. Using your right foot, make your foot go in a
clockwise direction. While you are doing this, trace the number six with
your right hand. Your foot will automatically go in the opposite
direction.
No matter how hard you try, this will always happen.

FYI Employee theft of private information is not unheard of. For those with a short memory:

AOL Employee Charged in Theft Of Screen Names

"A 24-year-old software engineer at America Online Inc. was arrested yesterday on federal charges that he hacked into the company's computers to steal 92 million e-mail addresses that were later sold and used to bombard AOL members with spam.

Smathers, who became an AOL employee in 1999, obtained other AOL member information as well, including telephone numbers, Zip codes and types of credit cards used by members..."

UPDATE:

ChoicePoint Sued Over Identity Theft

2/23/05

LOS ANGELES (Reuters) - A California woman has sued ChoicePoint Inc. for fraud and negligence after criminals gained access to a database of personal records compiled by the company.

The suit, which seeks class-action status, was filed in Los Angeles Superior Court last Friday and claims that for at least five months the company failed to adequately protect people's financial records and confidential information.

A ChoicePoint spokesman was not immediately available to comment. ChoicePoint has acknowledged that tens of thousands of consumer records were improperly accessed, and the Los Angeles County Sheriff's Department has made at least one arrest.

ChoicePoint maintains a database of information, including bank and criminal data, on virtually ever U.S. consumer. That information is sold to government agencies, prospective lenders and others.

The identity thieves were able to access Social Security (news - web sites) numbers, credit histories, criminal records and other sensitive data, ChoicePoint has said.

The suit seeks to represent anyone whose personal records were maintained by ChoicePoint from October 2004 through the completion of the suit, regardless of whether or not that data was actually released to anyone.

It also claims that prospective class members, possibly numbering at least 145,000 in total, have suffered damages of less than $75,000 each.

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