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ChoicePoint Names a "Consumer Advocate"

Latest Attempt to Restore the Company's Good Name

By Martin H. Bosworth
ConsumerAffairs.com

October 24, 2006

ChoicePoint • Lexis-Nexis Parent To Buy ChoicePoint • ChoicePoint Settles Data Breach Lawsuit • More ChoicePoint Identity Theft Victims Identified • ChoicePoint Settles With Attorneys General Over Data Breach • FTC Finally Sets Up Redress For ChoicePoint Victims • ChoicePoint Names a "Consumer Advocate" • FTC Fails To Pay Victims Of ChoicePoint Data Breach • ChoicePoint Gets a Makeover • Data Blunders Cost ChoicePoint $15 Million • Guilty Plea in ChoicePoint Data Theft • ChoicePoint Finds More Cases Of Illegal Data Access • ChoicePoint Responds • PATRIOT Act Further Empowers ChoicePoint • Previous Data Thefts Went Unreported • Consumers Will Be Able to See Their ChoicePoint Records, Company Says • Nigerian Sentenced to Prison in ChoicePoint Theft • State Tally of ChoicePoint Victims • ChoicePoint Breach Worse Than First Reported • Is National Security Compromised by ID Theft? • States Demand ChoicePoint Notify ID Theft Victims • Private Information Stolen from Nationwide Consumer Database

ChoicePoint, whose name has become synonymous with "data breach," has created a new "Consumer Advocate" position in hopes of cleaning up its image.

The job is designed to address, as ChoicePoint president Doug Curling put it, "the need for us to be more transparent to the consumer and more receptive to their concerns."

The first individual to hold the position is Katherine Bryant, a longtime legal counsel to ChoicePoint whose expertise includes dealing with the Fair Credit Reporting Act (FCRA). FCRA is the chief federal law that governs usage of personal data by credit bureaus and data clearinghouses such as ChoicePoint.

Bryant is on the board of directors of the National Association of Professional Background Screeners (NAPBS). NAPBS' ostensible purpose is to provide guidance for ethical conduct and compliance with FCRA and state laws for credit reporting.

ChoicePoint has been on a public relations blitz ever since it sold 145,000 individual consumer record to a Nigerian criminal ring posing as a legitimate business. California law compelled the Alpharetta, GA-based data broker to disclose the theft.

Since that disclosure, dozens of companies and government agencies have confessed to data breaches, hacks by outside parties, and losses of equipment such as laptop thefts.

ChoicePoint itself found more cases of unauthorized data access in September 2005, including evidence of police and private investigators in Florida viewing individuals' records without permission.

ChoicePoint ponied up a total of $15 million in fines to the Federal Trade Commission (FTC) in January 2006 as part of a settlement agreement regarding the data breach. Part of the settlement involved the company taking on stringent new measures to assure consumer privacy, and to submit to frequent audits to ensure it was staying above-board.

The $15 million collected by the FTC has yet to be disbursed to any of the actual victims affected by the original ChoicePoint data breach.

The bad publicity and loss of business following the data breach has put choicePoint's stock into take a nosedive. ChoicePoint is selling off many of its smaller data businesses in order to buy back its stock and smother cries from unhappy shareholders.

The Motley Fool's Rich Smith said it was a case of "a corporate midlife crisis – [ChoicePoint is] trying to decide what it wants to be after it has already grown up."

Even with the public problems, ChoicePoint continues to enjoy hefty success in many areas.

The company recently closed a deal with the FBI for a five-year, $12 million contract for technology and data services. Several Senators and consumer advocates criticized the deal as a sop to the company, and irresponsible in light of the data breaches that happened on its watch.

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