Monday, March 07, 2005

ChoicePoint Data Cache Became a Powder Keg

A story in the Washington Post discusses the background of the ChoicePoint scandal.

"Identity theft and fraud has become a national problem in a few short years. In 2003, federal authorities estimated that about 750,000 people fell victim to some identity scam. Now the prevailing estimate is close to 10 million. Driving the rise is a growing number of clever criminals who use people's Social Security numbers and other facts of their lives to take on their personas to run up credit cards bills, empty bank accounts and commit other crimes. But consumer advocates say it's also the failure of so many information brokers, retailers and credit issuers to adequately protect records or do enough to stop swindlers by verifying the identities of customers. Credit card companies, marketers and others have lost millions of files to hackers and identity thieves in recent years. Two years ago, ChoicePoint itself was hit by another identity theft scheme involving personal records of thousands of people."

"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."

"After four months it feels like [this] investigation is just beginning. 'Sometimes you're looking at Social Security numbers, and all of the sudden a name pops out and you realize, "These are real people, all of them," ' he said. 'They could all be victims, if not now, in the future. The information is out there.' "

If you ever thought your Social Security number and mother's maiden name were secure identifiers, think again. Identity thieves are finding them easier and easier to obtain. It's much more prudent to assume that everyone knows them than to attempt to (retroactively) protect them.

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